Pristine Floyde searches for a friend’s suitcase in luggage storage for Southwest Airlines at Denver International Airport on December 28, 2022 in Denver, Colorado.
Michal Ciaglo | Getty Images
Southwest Airlines stabilized its schedule over the weekend after about 16,000 cancellations since late last month, but the nationwide holiday crisis could cost it a whole lot of hundreds of thousands of dollars.
Southwest has canceled 304 flights since Friday, 2% of its schedule, most of them on Monday as US airlines faced inclement weather and ground shutdowns in Florida related to FAA equipment failures. By comparison, from December 21 to December 29, Southwest shed about 45% of its operations, which FlightAware says is a much larger share than other major airlines.
Now we have now two harder tasks for Southwest: reviewing 1000’s of passenger reimbursement receipts and improving the internal technology that contributed to the crash.
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“We plan to take a position in tools, technology and processes, but we will work immediately to know what lessons have been learned and methods to prevent a situation like this from happening again, because something like this must not occur again,” said Bob Jordan, Southwest’s CEO, who rudder in February, he told staff on Friday.
Jordan said employees in other departments have volunteered to assist customers and process returns. The carrier cooperates FedEx to assist customers get their luggage.
“We have halved the number of luggage since Thursday and are on the right track to have most, if not all, of the bags shipped to our customers later this week,” Jordan told staff on Monday.
On Tuesday, Southwest began offering travelers whose flights were canceled or significantly delayed between December 24 and January 2 and who had not traveled or rebooked 25,000 Rapid Rewards points, price about $300, in accordance with the airline.
Miles required to redeem for a ticket vary based on demand and capability. For instance, over the Easter weekend, traveling between Baltimore and Los Angeles currently costs over 25,000 Rapid Rewards points, but per week later it might be enough to cover the fare.
Bad weather caused problems last month, affecting flights across the United States. Nonetheless, Southwest crews had difficulty mechanically relocating after all shifts and were forced to attend for hours with crew planning services. Lots of of 1000’s of passengers were affected, and Southwest continues to work on its lost baggage backlog.
The airline has canceled around two-thirds of its flights for the higher a part of last week in an try to get crews and planes where they need to go before operating almost normally on Friday.
The chaos could cost Southwest between $600 million and $700 million, in accordance with estimates by Andrew Didora, an airline stock analyst at Bank of America. This includes each lost reimbursement revenue and reimbursements to injured passengers, which can include expenses resembling hotels and automobile rentals.
Didora lowered its fourth-quarter adjusted earnings forecast for Southwest to 37 cents a share from 85 cents.
Last week, a Southwest executive said the appeals would “definitely” weigh on fourth-quarter results, but it might take weeks to process customer claims for reimbursement.
Transportation Secretary Pete Buttigieg has vowed to carry Southwest accountable if it fails to supply customers with returns and refunds, although such fines for non-payment by customers can take months if not years.
Southwest shares fell 3.2% to $32.60 on Tuesday, a much bigger drop than rivals. The Dallas-based airline is anticipated to announce results on January 26, but will likely present crash costs before then.