On Thursday, Southwest Airlines executives warned that the Christmas meltdown will “certainly” impact their fourth-quarter results, noting that the disaster will take weeks to sort out.
Hundreds of thousands of travelers were impacted over the holiday week as flights across the country were cancelled.
In an attempt to salvage its operation and relocate planes and personnel, the budget airline significantly reduced its schedules over the past week, only executing approximately one-third of its planned flights.
On Friday, Southwest anticipates conducting operations as usual. However, FlightAware reports that a total of 39 flights have been canceled for the day, a significant decrease from the over 2,300 cancellations on Thursday.
“We have all hands on deck and tested solutions in place to support the restored operation. I’m confident, but I’m also cautious,” said CEO Bob Jordan in a memo on Thursday.
Southwest Airlines has resumed selling tickets after a pause due to disruptions caused by winter weather. CEO Gary Kelly, a veteran of the company with over 30 years of experience, implemented the pause in order to stabilize the airline’s schedule. The internal scheduling platforms, crucial for matching crews with flights, were overloaded and contributed to the problems faced by Southwest.
On Thursday, Chief Commercial Officer Ryan Green stated that there will “certainly be an impact to the fourth quarter” due to the disruptions. However, executives declined to provide an estimate of the total cost of the disruptions. In October 2021, a similar incident cost the airline approximately $75 million. This recent event was longer in duration and occurred during the holiday season when more travelers were flying and fares were higher.
Southwest had previously anticipated quarterly revenue to increase by as much as 17% compared to 2019, when the airline brought in nearly $6 billion. In order to prevent future disruptions, the executives promised to improve crew scheduling platforms and said that modernization efforts were already underway. However, they acknowledged that such projects take several years to complete.
As expected, Southwest airlines travelers are not happy.
“For a company that talks about love and has a heart as their graphic, there was not much love on Christmas day,” said Jack Leon, a 34-year old teacher who tried flying to Boston for Christmas.
“My two night trip is suddenly a week long,” Suzie Chism, a recording artist in Nashville said. “The loss of income is crushing.”
“I simply do not trust Southwest to get me there,” she added.
Transportation Secretary Pete Buttigieg has also taken notice of the Southwest drama and is calling on Southwest to immediately reimburse travelers for expenses and to return lost bags.
“No amount of financial compensation can fully make up for passengers who missed moments with their families that they can never get back — Christmas, birthdays, weddings, and other special events,” Buttigieg said. “That’s why it is so critical for Southwest to begin by reimbursing passengers for those costs that can be measured in dollars and cents.”