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Southwest Airlines Claims Travel Fiasco Could Cost Company $825 Million

Southwest Airlines

Southwest Airlines is still reeling from the holiday travel fiasco that caused over 16,000 flights to be cancelled during the weekend of busy holiday travel, leaving thousands of people stranded, and it will likely cost the company severely.

In some instances, passengers are still awaiting their luggage.

This week, Southwest Airlines released the following statement: “Southwest Airlines said it was “making solid progress” on processing refunds for customers and working with “great urgency” to return lost luggage.”

The company has also offered passengers 25,000 travel points – which the airline says is equivalent to over $300 – as a “gesture of goodwill”. They have blamed a deadly winter storm in the United States and Canada for the cancellations, which took place between the dates of December 21st and January 2nd.

However, the company took far longer than other major airlines to recover from the weather, with many analysts stating that a number of other factors have caused to the fiasco, including poor staffing structuring and their “point-to-point” system for how it designs its routes.

According to BBC, the disruptions could cost Southwest between $725m (£604.6m) to $825 million, per a filing with the United States Securities and Exchange Commission on Friday. They added that they expect to lose as much as $425 million in lost revenue, and factor additional costs such as reimbursements for expenses passengers incurred due to the disruptions and extra pay for employees because of the chaos that occurred.

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