Southwest Suffers $75 Million Loss Over Mass Flight Cancelations
Southwest Airlines endured a $75 million loss over widespread cancelations and delays earlier this month that spanned several days, the Dallas-based carrier announced Thursday.
Over the span of about a weekend, Southwest canceled around 2,000 flights, according to monitoring website FlightAware. While the firm blamed poor weather conditions and unspecified staffing issues on the cancelations, other major U.S. carriers appeared to operate normally.
According to its earnings release, Southwest suffered “an estimated $75 million negative impact as a result of flight cancellations from operational challenges experienced earlier this month and related Customer refunds and gestures of goodwill.” The company also said it suffered another $40 million in losses “due to the lingering effects of the Delta variant,” referring to the CCP (Chinese Communist Party) virus strain.
Now, the company will cut back on flights in December to avoid a similar shortfall due to “more conservative staffing assumptions.”
The company recently backed off a plan to place unvaccinated workers on unpaid leave if they haven’t obtained a medical or religious exemption by Dec. 8. It’s unclear if the move to cut flights in December—a month when millions of Americans travel for Christmas and New Year’s—had to do with the vaccine mandate.
Southwest was also sued by its main pilots’ union, the Southwest Airlines Pilots Association, which asked a court to block the company’s vaccine requirement. The union argued that pilots face a unique risk from possible vaccine side-effects due to the stringent medical hurdles they have to clear in order to fly.
United Airlines, American Airlines, JetBlue, Alaska Airlines, and Hawaiian Airlines have announced similar vaccine mandates. Delta Air Lines appears to be the only major airline that hasn’t done so, instead opting to charge unvaccinated workers $200 per month.
“We are aggressively hiring to a goal of approximately 5,000 new Employees by the end of this year, and we are currently more than halfway toward that goal,” Southwest CEO Gary Kelly said in the Thursday news release. “We made good progress in our pandemic recovery in third quarter 2021, and I expect more in fourth quarter. I’m very excited about the demand recovery and our prospects for 2022.”
The holiday season should offset any problems for the rest of 2021, Southwest’s release said.
There “are lingering effects from the summer COVID-19 surge and recent operational challenges, we are encouraged with renewed momentum in leisure and business traffic, revenues, and bookings—especially over the holidays,” Kelly added.
The carrier also reported a third-quarter profit of $446 million, as compared with a $1.6 billion loss a year earlier due to a boost from federal aid and leaves of absence by employees. Southwest’s revenue rose to $4.68 billion in the quarter, compared with $1.79 billion during the same quarter last year, the release shows.