DALLAS – Southwest Airlines (WN) has revealed that the recent travel chaos during its busy end-of-year travel period could cost the company between US$725m and US$825m.
In a report filed with the US Securities and Exchange Commission (SEC), WN revealed that it had cancelled over 16,700 flights between December 21 and December 31, 2022. Outdated technology, which struggled to keep track of the airline’s crews and its point-to-point network, was blamed for the cancellations after a “once in a lifetime” winter storm crippled North America.
The Dallas-based carrier expects to lose as much as US$425m in lost revenue directly from the cancellations. Other costs will come from “increased operating expenses,” including reimbursement of customer expenses and compensation, plus extra pay to its employees for overtime and compensation.
Passenger Compensation
In an attempt to make peace with its disgruntled customers, WN recently offered selected travellers 25,000 Rapid Rewards frequent flyer points worth over US$300 in flights.
However, in a total public relations disaster, many passengers have complained that they are still awaiting refunds, and some are still waiting to be reunited with lost luggage.
One passenger, Eric Capdeville, has already begun legal action against the company. The class action lawsuit was filed earlier this week, claiming the airline only provided credit vouchers and not a direct refund when his flight was cancelled.
The US Government has also said it would take further action and potentially fine Southwest if it fails to reimburse affected passengers.
Featured image: Southwest cancelled over 16,700 flights. Photo: Michael Rodeback/Airways.
