Southwest Airlines Lost $800 Million During Meltdown! – Live and Let’s Fly

Remember that Southwest Airlines meltdown over the holidays that stranded tens of thousands of passengers? Southwest has confessed the computer failure cost the company $800 Million. If that is not a wake-up call, I do not know what else is.

Southwest Airlines Reports Massive $800 Million Loss, Blames Meltdown

Southwest just reported its quarterly earnings. While revenue beat expectations ($6.17 billion versus $6.12 billion projected), the meltdown led to a loss far higher than initially forecast. As CEO Bob Jordan explained:

“Due to the operational disruptions in late December, which resulted in more than 16,700 flight cancellations, we incurred a fourth quarter pre-tax negative impact of approximately $800 million (or approximately $620 million on an after-tax basis), which resulted in a fourth quarter 2022 net loss.”

A projected healthy profit became an overall loss of $220 million in the quarter.

The trials for Southwest Airlines are not over.

The carrier still has not corrected the core problem; its crew scheduling system that could not accommodate the number of delays and cancellations that hit the airline at once. Should another horrific weather event hit the nation, Southwest might well experience an identical meltdown. To make matters worse for Southwest, the US Department of Transportation has announced it is investigating the airline over claims it had knowingly scheduled more flights that it could handle, thereby deliberately deceiving customers.

The effects of this meltdown will continue into next quarter, with Southwest also forecasting a loss in the first quarter.

Meanwhile, many passengers tell Live and Let’s Fly they still have not been made whole, specifically concerning expenses incurred during the meltdown. Although Southwest has set up an ostensibly easy online system for customer’s to claim back expenses, processing times have been slow and some denials questionable.

Do give Southwest Airlines a chance to respond to your complaint, but consider a DOT complaint if you are hitting a wall and incurred reasonable expenses due your Southwest flight being cancelled or significantly delayed.

CONCLUSION

Southwest Airlines reported huge quarterly loss thanks to losing $800 million during its week-long meltdown in late December. As Southwest digs itself out of a hole, it must be more aggressive in seeking remedies to prevent a repeat-occurrence.

image: Southwest Airlines