Southwest Airlines admitted it expects a significant financial hit this quarter after its wave of holiday flight cancellations caused chaos for travelers and prompted intense federal scrutiny.
The embattled air carrier has faced calls to make its furious customers financially whole after scrapping more than 16,000 flights since last week.
In an update posted on the company’s website Friday morning, Southwest confirmed it was back to “operating our normal schedule” and expected “minimal disruptions for the weekend.”
But the fallout is expected to hammer Southwest’s bottom line. Some financial analysts say Southwest’s holiday implosion could slash up to 9% from its expected fourth-quarter earnings, Reuters reported.
Southwest’s chief commercial officer Ryan Green hinted at looming financial ramifications during a call with reporters, acknowledging that “there’ll certainly be an impact in the fourth quarter.”
“We’re … working through all the financial elements of this,” Green said Thursday afternoon. “We’ll share that information when we have all that compiled and are ready to do that.”
A Southwest executive confirmed there would “certainly” be a financial loss from the chaos.AFP via Getty Images
Southwest executives confirmed they plan to refund tickets for impacted travelers as well as reimburse for meals, hotels and car rentals after facing harsh criticism from lawmakers and Treasury Secretary Pete Buttigieg.
The company has declined to provide a more specific estimate or reveal how many of its customers were affected by the meltdown. Green acknowledged it would likely take weeks for Southwest to process all the reimbursements.
“If you had to make alternative travel arrangements like hotels, meals, rental cars, gas for rental car, those will qualify for reimbursements,” Green said on the call.
Southwest canceled more than 16,000 flights over the last week.AP
Southwest was responsible for the vast majority of flight cancellations in recent days as bad winter weather pummeled much of the country. Critics claim the airline has antiquated technology that left it ill-equipped to adjust to staffing challenges as employees called out of work.
“Once again, we value the continued patience and support of our valued Customers, and we apologize for the inconveniences of the past week,” the airline said in a statement.
FlightAware data showed the carrier had canceled 41 flights on Friday, or about 1% of its schedule, after nixing more than 2,300 trips a day earlier and more than 16,000 over the last week.
Southwest Airlines’ flight cancellations left many passengers stranded.AP
Buttigieg slammed Southwest Airlines for “unacceptable” travel disruptions in a letter to CEO Bob Jordan on Thursday. He demanded that Southwest “begin by reimbursing passengers for those costs that can be measured in dollars and cents.”
The Biden cabinet member has warned Southwest will face federal penalties if it does not comply.
With Post wires
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