Southwest's Flight Cancellation Fiasco Might Cost the Company $800 Million

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Investment bank Jefferies estimates that the losses the airline faces is more than it made in the first nine months of 2022.

reported that this fiasco might cost the company a whopping $800 million according to estimates from investment bank Jefferies. The main crux of the issue, according to Vice President of the Southwest Airlines Pilots Association Mike Santoro, frosty weather did play a hand in the disastrous travel season, but so too did the company’s incredibly antiquated digital infrastructure.

couldn’t keep up with the mounting flight cancellations, and the company struggled to get pilots, flight attendants, and travelers onto the correct flights. “Even though we had a crew available, [scheduling] had no idea those flight attendants were in the back of the airplane,” Santoro said in an“A number of their employees, flight attendants and pilots, have been warning about this for years — that they were underinvesting and that they were one storm away from disaster,” said Helane Becker as quoted in the New York Times. Becker is a managing director and senior analyst at Cowen, an investment bank.

The $800 million price tag mainly consists of revenue losses and customer reimbursements, but the company could probably lose even more aspour in. Jefferies estimates that $550 million in losses comes directly from flight cancellations, while an additional $250 million comes from customer reimbursements for hotel, car rental, and among

other examples. This $800 million figure is more than then amount the airline made in the first nine months of 2022—$759 million.

 

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Still way cheaper than the financial hit Elon will take for buying Twitter.

Can’t wait for the tax payers to bail them out again in like 3 months just so they can do stock buy backs!

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