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Holiday travel disruptions could cost Southwest up to $825 million

Southwest Reputation Repair
Posted at 8:28 AM, Jan 06, 2023
and last updated 2023-01-06 12:28:05-05

Southwest expects to take a huge financial hit following a system meltdown that led to thousands of flights being canceled over the holidays.

In a filing with the Securities and Exchange Commission, Southwest said the service disruptions will cost the company between $725 million and $825 million, which means it will likely report a net loss for the fourth quarter of 2022.

Southwest said it canceled 16,700 flights from December 21, 2022, through December 31, 2022. Initial cancelations were blamed on the weather. However, as other airlines began resuming normal operations, Southwest lagged behind due to what's been described as outdated scheduling software.

"I've said it before, but I can't say it enough how sorry I am for the impact these challenges have had on our Employees and our Customers," Southwest CEO Bob Jordan said in a video statement on Thursday.

Southwest said it has been working to refund and reimburse the thousands of impacted passengers and has also provided them with 25,000 Rapid Rewards Points.

Jordan added that the vast majority of luggage has either been reunited with passengers or is on the way to the customer.