Losses from refunds and cancellations exceed net profit Southwest made in first nine months of year.
Southwest Airlines says its holiday flight cancellation debacle will cost the company up to $825 million as it processes refunds for customers and prepares to upgrade its scheduling software, which is projected to be a pricey endeavor. over the busy holiday travel period, affecting hundreds of thousands of passengers in an episode sure to reverberate for a long time to come.
The damage exceeds the roughly $760 million of net income the carrier made in the first nine months of 2022.Southwest's own contract of carriage mandates that it provide refunds for canceled fights, plus reimbursement to customers for incurred costs like hotels, meals and rental cars. "While weather can disrupt flight schedules, the thousands of cancellations by Southwest in recent days have not been because of the weather," U.S. Secretary of Transportation Pete Buttigieg wrote in a
The union added that"the worst of the effects were absolutely preventable." It argued that the collapse was the result of the company's failure to modernize its pilot and crew scheduling software, and more generally to modernize operations. It's unknown exactly how much it will cost Southwest to upgrade its pilot and crew scheduling systems and how swiftly these upgrades will be made.
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