Southwest Airlines’ cancellation snafus will likely cost the airline around $100 million in lost revenue and it also faces scrutiny from the U.S. Department of Transportation.
- Winter storms and staffing shortages have resulted in more than 15,700 Southwest Airlines flight cancellations since December 22, leaving thousands of passengers, luggage, and pilots stranded in airports across the country. Many are unlikely to be rebooted and home until after New Year’s Day.
- At least 2,800 flights have been canceled for Wednesday, December 28, with more than 1,500 already canceled for Thursday.
- The cancellations could end up costing the airline more than $100 million in lost revenue, if past events are any indication.
- Other airlines have yet to experience cancellations in this volume, with Spirit Airlines canceling 83 flights Tuesday and Alaska Airlines canceling 75. Spirit canceled 32 flights Wednesday while JetBlue canceled 24.
- Transportation Secretary Pete Buttigieg is watching the situation and the Department of Transportation is looking to scrutinize the company’s compliance with its customer service plan for what it calls an “unacceptable rate of cancellations.”
Why it’s News
The breakdown in service was caused in part by Southwest’s aggressive practices for flight schedules. Planes fly from each destination, pick up staff, and service multiple cities per day along complex flight routes. This allows Southwest to provide frequent, direct, and less expensive flights.
But when thousands of planes miss their deadlines, the system becomes stressed. Similar conditions caused the cancellation of 3,000 flights in October 2021 over the course of four days. Those cancellations cost the airline $75 million, and the ongoing cancellations are at least five times worse and growing.
“We end up with flight crews and airplanes that are out of place, and not in the cities that they need to be in to continue to run our operations,” says Southwest spokesman Jay McVay.
The company is responding this week by purposely reducing the schedule to reposition planes and crews, allowing the company to get the situation under control. Southwest has also committed to covering hotels, rental cars, airline ticket bookings, and refunds for affected customers.
Buttigieg and the Department of Transportation are prepared to levy fines against Southwest if the company does not resolve the ongoing issues as they have promised and is looking to take a closer look at the company’s customer service record.
“Their system really has completely melted down. I made clear that our department will be holding them accountable for their responsibilities to customers, both to get them through this situation and to make sure that this can’t happen again,” says Buttigieg.
But some question why not just let the customers punish Southwest with its future flying decisions—to go with Southwest or not—rather than the government.
“Washington receded from airline management in the 1970s, and the ensuing competition opened air travel to the masses. Politicians love to kick an industry when it’s down, but passengers can take their market revenge on Southwest without political help that will make air travel worse and more expensive,” wrote the Wall Street Journal editorial board today.