Southwest Airlines Reports Massive Revenue Hit After Christmas Meltdown

Southwest Airlines Reports a loss of $220 million in the fourth quarter. investors that fallout from the company’s holiday meltdown would continue.

Southwest cancelled more flights than its competitors over Christmas, even though the winter storms had subsided. Investors will be paying $0.37 per share for these losses. They will continue into the first quarter in 2023. “increase in flight cancellations and a deceleration in bookings” According to fourth quarter earnings, disruptions were seen in January and Februari. report.

“We have swiftly taken steps to bolster our operational resilience and are undergoing a detailed review of the December events,” Bob Jordan, Southwest CEO, remarked. “In addition, our Board of Directors has established an Operations Review Committee that is working with the company’s management to help oversee the company’s response. As part of our efforts, we are also conducting a third-party review of the December events and are reexamining the priority of technology and other investments planned in 2023.”

Shares for Southwest fell 4.8% on Thursday morning after the announcement; the company’s stock price has fallen more than 12% since the beginning of December.

Southwest reported positive net earnings for 2022 despite losses during the fourth quarter. They also had record fourth-quarter and full-year operating results of $23.8 billion and $6.2 billion, respectively. According to the company, the number of available seats miles, which is a measure used by airlines for estimating revenue generation capacity, will rise 10% in the first quarter 2023. Jordan said that the company’s executives are preparing for an increase in revenue generation. “encouraged” Check out the March booking trends and what you can expect for next month. “solid profits” The year.

According to a report by a, Southwest cancelled 16,700 Southwest flights between December 21st and December 31. filing Submitted to the Securities and Exchange Commission. They added that the overall pretax negative impact From the meltdown, between $725 Million and $825 Million would be settled.

Executives are looking to recover There were thousands of passengers affected by delayed or cancelled flights, which led to a loss in customer trust. Some passengers received reward points up to $300; the company also promised to reimburse flyers for meals and hotel accommodations as well as tickets purchased with other airlines.

Despite the expectations of profitability, there will be difficulties for the company throughout the year. Members of the Southwest Airlines Pilot Association, the company’s labor union, announced A strike authorization vote was scheduled for May 1, in response to the holiday meltdown. “utter lack of meaningful progress on a contract negotiation.”

“I think it is best to consider what our customers have been through over the past several years and the past several weeks,” Southwest Airlines Pilot Association President Captain Casey Murray stated in a press release. “It was the lack of discussion or commitment by our leadership team to rectify these issues for our passengers and our pilots that drove us to make the decision to carry forward on this path.”

Transport Secretary Pete Buttigieg and other regulators have in the interim urged Southwest to quickly reimburse customers; he described The “level of disruption” As experienced by passengers “unacceptable” He also warned that his agency would be exercising its rights. “the fullest extent of its investigative and enforcement powers” To ensure that customers get refunded.