Is Weather to blame for Southwest Airlines System Failure
2022.12.28 13:09
Is Weather to blame for Southwest Airlines System Failure
Budrigannews.com – Southwest Airlines (NYSE:) came under increasing pressure on Wednesday from U.S. Transportation Secretary Pete Buttigieg. claiming that the thousands of additional flight cancellations at the low-cost airline indicated a system failure.
In an interview that was posted on the website of ABC News, Buttigieg stated, “We are past the point where they could say this is a weather-driven issue.” Don’t get me wrong; that severe storm was the catalyst for everything else. We observed that all airlines were severely disrupted by the country’s winter weather.”
According to NBC News, weather-related incidents have caused at least 60 deaths nationwide in recent days.
Buttigieg stated that other airlines and the remainder of the aviation system appeared to have recovered from the weather disruptions.
He said, “So what this indicates is a system failure (at Southwest), and they need to make sure that these stranded passengers get to where they need to go and that they are provided adequate compensation, not just for the flights themselves… but also things like hotels, ground transportation, and meals because this is the airlines’ responsibility.” He also said that he had spoken with the leadership of the company. “So what this indicates is a system failure (at Southwest), and they need to make sure that these stranded passengers
Thousands of flights had been canceled by U.S. airlines before and during the Christmas holiday weekend due to a massive winter storm that swept over most of the country. However, Southwest’s problems have gotten worse while other airlines have mostly recovered.
Since Friday, Southwest has canceled more than 14,500 flights. According to the flight tracking website FlightAware, as of late morning on Wednesday, it had canceled 2,500 flights.
By Tuesday, thousands of requests had been processed, according to Southwest’s announcement to Reuters that it would reimburse customers for expenses incurred while traveling.
NYSE: Delta Air Lines stated in an email that it had capped fares in all Southwest-operated markets, both domestic and international. Over 700 nonstop markets are included in the program, which runs through December 31. American and United announced programs that are similar.
The top Democrat on the House Transportation and Infrastructure Committee, U.S. Representative Rick Larsen, stated in a tweet that the airline would begin treating flight cancellations as “controllable” on December 24, which would result in reimbursements for incidental expenses and refunds for full fares.
In a video message, the CEO of the low-cost airline, Bob Jordan, apologized to employees and customers and said that the airline needed to upgrade its older systems.
Southwest’s stock fell by 6% on Tuesday and by 1.5% in morning trading on Wednesday. The cancellations, according to some analysts, will hurt profits in the fourth quarter.
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Sheila Kahyaoglu, an analyst with Jefferies, stated, “The total impact to revenue could be in the 9% range of our expected Q4 revenue, which compares to our current estimate with revenues 15% ahead of 2019 levels in 2022.”
The total EBITDAR (earnings before interest, taxes, depreciation, amortization, restructuring, and rent costs) impact of the cancellations could amount to $700 million, according to Kahyaoglu’s estimation.
