Southwest Airlines: Q4 Financials Will Be Impacted by the Meltdown

Southwest Airlines’ Holiday meltdown “certainly” Company executives announced that it had reported fourth-quarter results on Thursday. However, they added that it will take several more weeks to process reimbursement requests for affected travelers.

Washington was concerned about the systemwide chaos that left hundreds of thousands of customers stranded over the holiday week.

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In an attempt to stabilize its operations and get crews and planes to where they are needed, the low-cost airline cut schedules in the last few days.

Southwest stated that it expected to maintain a normal schedule Friday. According to FlightAware it has canceled 39 flights for Friday. This is down from the 2,300 that were scheduled 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,” In a memo to staff, Bob Jordan, CEO, stated the following:

Jordan, a Southwest veteran of more than three decades who said that Friday’s sale was also resumed by the airline. became CEO February

Southwest’s holiday week was the worst for its operation. brutal winter weather swept across the U.S. After most airlines had recovered by the end of last week’s, Southwest’s problems got worse. Southwest executives mentioned problems like overloaded internal scheduling platforms that were crucial in getting crews matched up with flights.

Thursday’s executive meeting vowed to improve crew scheduling platforms. They also stated that modernization efforts had already begun, but they noted that these projects can take years.

Ryan Green, Chief Commercial Officer of the United States, spoke to reporters Thursday. “will certainly be an impact to the fourth quarter.”

Executives declined to estimate the cost of disruptions to the airline. The airline estimated that a similar incident in October 2021 cost them $75 million. But this event was longer due to more passengers flying during the holidays and higher fares.

The carrier stated previously that it anticipated a 17% increase in quarterly revenue over 2019, which was close to $6 billion.

Southwest faces major customer service issues when it comes to reimbursement of travelers for expenses related to cancelled flights. Travelers incurred additional expenses, beyond hotel and meal costs, including the cost of replacing toiletries or other necessities.

After a series of flight changes, Jack Leon, a 34 year-old teacher, cancelled his trip to Boston. Leon, a 34-year-old teacher, had to return to the airport four days later after his trip was canceled. He needed to get reimbursement for his return flight because he couldn’t reach customer service by phone, email, or online.

“For a company that talks about love and has a heart as their graphic, there was not much love on Christmas Day,” Leon said.

Southwest announced Thursday that it will extend the qualifying time for elite statuses. These statuses come with perks such free Wi-Fi, early board, and sometimes a companion pass.

CNBC interviewed Suzie Chism (a 33-year old recording artist from Nashville), about her cancelled Dec. 26 Southwest flight back from Las Vegas. It caused her to miss a week work and her final performance of the year.

“My two night trip is suddenly a week long,” Chism. “The loss of income is crushing.”

Chism claimed she was able, with her new flight booked Frontier Friday Night.

“I simply do not trust Southwest to get me there,” She said.

Some competitors claimed they would cap fares for certain cities Fare searches on Thursday found some flights that cost $600 or more to assist Southwest passengers who are stuck.

After Pete Buttigieg, Transportation Secretary, urged carriers to limit fares, the moves were made.

Buttigieg sent a Thursday letter to Southwest CEO. He stated that he would hold Southwest responsible if the airline doesn’t immediately refund passengers for canceled flights, reimburse expenses, and 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 wrote. “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.”

Buttigieg said to NBC Nightly News, that Southwest would be served by the Transportation Department. “under a microscope” If necessary, levy fines to ensure that the airline is doing right by passengers.

Many lawmakers also stated that they would investigate what led to Southwest’s huge problems during the week.

Southwest shares rose nearly 4% Thursday, but the stock is still down over 7% this week at $33 per share. CFRA Research cut its 12-month price target on Southwest earlier Thursday from $47 – $41 maintained its strong buy rating on the stock.

“History shows customers tend not to permanently ditch an airline even after an awful experience due to the commodity-like nature of the product,” Colin Scarola, CFRA analyst, wrote.

Customers are not all the same.

Alex Kain, 37 years old, was scheduled to fly to Seattle on Christmas Eve from Denver, which was one of the worst affected airports by the disruptions. Instead, Kain’s flight to Seattle was canceled at 2 am. His girlfriend drove 18 hours in a car rental to Redmond in Oregon. They took an Uber there. Alaska Airlines Fly home

The couple will request reimbursement for their hotels, rental cars, gas, and Alaska Airlines flights. Kain estimates that the total cost could be as high as $3,000.

“There’s no amount of money they could give us to make us fly Southwest again,” CNBC interviewed Kain.