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The holiday crisis could cost Southwest Airlines more than $1 billion

 

Southwest Airlines lost money last quarter, but management was optimistic about future ticket sales. Taylor Glascock

Southwest Airlines said Thursday that last month's holiday meltdown cost it more than $1 billion, including lost revenue from canceled flights, refunds, and refunds to passengers. Some customers even canceled their trips.

A Christmas breakdown that affected an estimated 2 million passengers cost him $220 million in the last three months of last year, despite strong demand for air travel in general. It took. it took. it took. it took. it took. it took. it took. contributed. Southwest said. The airline reported record fourth-quarter revenue of $6.2 billion and record annual revenue. His annual profit was $539 million.

Massive flight cancellations cost Southwest Airlines about $800 million in losses in the fourth quarter and are expected to reduce revenue by up to $350 million by March, according to the airline. The company's shares fell about 3% at the close of trading on Thursday.

Still, Southwest Airlines executives say they are optimistic about March and beyond, as airfare demand remains strong and is expected to grow by 24%. The airline has not changed its plans to add flights this year.

The company announced its quarterly results a day after the U.S. Department of Transportation announced it had launched a "rigorous and comprehensive" investigation into the Southwest. The agency said management investigated whether the airline had scheduled flights that it could not carry out.

Southwest Airlines said in a statement Wednesday that its vacation schedule was "carefully designed" and that it would cooperate with "inquiries or requests from government supervisors or elected officials." They claim to have processed more than 80% of travel plan refund requests.

However, as the situation improved, Southwest struggled to return to normal operations.

Ultimately, airlines canceled thousands of flights to reset their networks, leaving customers stranded and forced to make other plans.16,700 flights were canceled, three minutes behind schedule. A rice field. became 1. That's all

The union accuses management of failing to update its crew scheduling system and software. Southwest spends about $1 billion a year on technology, and its methods were working as designed, but the crew was so far from where they needed to be that they made a last-minute effort to get it done quickly. . . . . . . . I had to. He said he was overwhelmed by the number of changes.

The airline said its technology worked as intended, but admitted the automated software didn't help redeploy crew from canceled flights that were no longer where they were expected. The company has asked software maker GE Digital to fix the system, and on Thursday said it would provide an update in the coming weeks.

Airlines are trying to prevent similar meltdowns by monitoring potential problems more closely, increasing staffing, scheduling, and upgrading the tools they use to communicate with their crews. To find out what went wrong, Southwest hired his consulting firm, Oliver Wyman.

The episode angered lawmakers who plan to hold public hearings on protecting consumers and improving airline operations.

Other major airlines, including United and Delta, are more optimistic, forecasting quarterly solid revenue and demand growth in the coming months. United Airlines, Delta Air Lines, and American Airlines each recently reported revenues of more than $800 million in the fourth quarter.

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