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The Sunday Review
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Southwest Airlines report a loss for the fourth quarter because of the company’s service meltdown During the holiday season and The company warned of the possibility that additional costs will be incurred by these issues. loss In the first quarter.

An airline had to be cancelled more Between December 21st and January 21, 2016, there were more than 16,700 flights and 29 was roughly the same as its entire schedule over that time. Thursday, Southwest According to the meltdown It cost $800million to fly with the airline, which resulted in an adjusted net loss The quarter saw $226 millions. It still managed to post an adjusted annual profit $723 million. This is a significant improvement from the $1.3 billion that it suffered in 2021 due to the pandemic.

The company stated that it expected another. loss The continued impact of the hurricanes impacted the second quarter. and There are costs involved with meltdown. The slowest quarters are usually the first. and The least lucrative period to fly US airlines. However, Southwest Strong bookings in March are encouraging, said the company.

Southwest

(LUV)
’s quarterly loss of 38 cents a share was far worse than Wall Street analysts’ forecast. The shares of Southwest

(LUV)
That miss led to a loss of 4% during trading in the mid-afternoon. and It is especially sour.

According to the airline’s forecast, the first quarter will be a good one. loss Because of an increased number of passengers cancelling reservations and For January, there will be fewer bookings and According to the airline, February “are assumed to be associated with the operational disruptions in December.” These bookings were lost in the current quarter are It is expected that it will cost between $300million and $350million.

To repair customer relations, Southwest It has also given 25,000 bonus points to frequent flyer accounts and travel vouchers to the affected passengers. In addition to refunding passengers for cancelled flights, the airline is also reimbursing customers who have purchased tickets on another airline or had other travel-related expenses.

Even when you have the meltdownWhat does it cost? Southwest It lost $410 million revenue because it had to cancel tickets for passengers. However, the company still posted record fourth-quarter sales of $6.2 Billion, an increase of 7% over the quarter before the pandemic.

Southwest The record-breaking revenue was achieved despite the fact that the airline was only able to fly 6% less seats than in the previous quarter of 2019, prior the pandemic. This was adjusted for mileage flown.

Due to the strong demand, Southwest passengers paid 10.6% more They paid more for each mile flown than what they had to pay in 2019

An enormous winter storm erupted in the area. service There are many problems. Southwest The airline was more difficult to recover after the storm than any other airlines due to its antiquated crew scheduling system. This quickly overloaded the company, making it unable get staffing to the locations where the airline needed. The December 20-29 period saw nearly half the airline’s schedule being cancelled. Up to 75% of the scheduled flights were grounded in some days.

It stated that they are “conducting a third-party review of the December events and … reexamining the priority of technology and other investments planned in 2023.”

CNBC’s Thursday interview with Bob Jordan featured the CEO defending himself. Southwest’s investment in technology, saying the company had been spending about $1 billion a year on upgrading its technology and Spending $1.3 billion on this year’s purchases would bring in more than $13 billion.

“The idea we don’t invest in technology just isn’t correct,” He said. “Now there’s always things to work on, and we have things to work on in the crew scheduling area, for example, and we’ll do that.”

He claimed that GE Digital already has a fix for the scheduling problems that crews had in the past. meltdown. He said, “Having…” more It is possible to schedule staff members in advance.

“It’s not one thing [that caused the meltdown.] This was a very complicated series of events,” He told CNBC.

Call with analysts and journalists later Thursday, Southwest officials said they weren’t sure that the computer system used in crew scheduling needs to be replaced, and The current GE fixes are being evaluated and could be used to address the deficiencies discovered in the meltdown.

“Based on what we know at this point, our processes and technology generally worked as designed,” Jordan. “We were hit by an overwhelming volume of close-end cancellations, which put us behind in creating crew solutions.”

This is a part of the reason there were worse problems. Southwest Crew members were required to phone the airline rather than letting it know electronically to inform them of their availability. This is a difference from other airlines.

“That was a problem,” Andrew Watterston Southwest’s chief operating officer. “It wasn’t the problem for the situation. It was a symptom of the problem.”

The labor contracts that pilots are required to switch over to electronic notification will need to be modified. and Jordan said that flight attendants are a common problem. Negotiations are Now, the replacement of existing contracts covers all matters including pay and benefits.

Jordan claimed that Jordan had so far said this. Southwest It was No. The No.1 US carrier in punctual performance in January was American Airlines.

“So, of course, we’re applying what we’ve learned and we’re actually performing very very well.”

Again, he apologized for both customers and Southwest Employees, but they said that the March bookings were not yet finalized. and Beyond suggests that the airline has not lost its base of customers.

“There’s a lot of evidence our loyal customers are sticking with us,” He spoke on CNBC. He informed investors that 25 percent of those who were awarded frequent flyer bonus points had made future bookings. SouthwestYou can use the points to pay cash or you could make them.

Southwest The airline has always been one of the largest and most successful in America. It was in competition with many other airlines. and Recent decades have seen bankruptcy avoidance due to losses Recessions are the cause and Even though events such as 9/11 were tragic, Southwest He had accumulated a record of 47 consecutively profitable years prior to the pandemic. In 2020 Southwest and All other airlines that were reported as a loss.

The loss of money by all other airlines in 2021 was the same as last year, except for special items, such financial assistance from the federal government. and The majority of airlines reported that another airline was involved. quarterly loss In the first three months 2022, the Omicron variant’s surge in Covid cases impacted travel demand.

The Spring Break travel season was the first to see strong demand. and Airfare prices rose as people paid high-end for long-delayed flights. Southwest and Other US airlines also reported profit in the second quarter and Third quarters and Many have either reported profitable fourth quarters, or are forecast to do so – as Southwest Were before the meltdown.

American airlines: American Airways has three other US carriers

(AAL)
JetBlue

(JBLU)
and Alaska

(ALK)
All companies reported fourth-quarter earnings that were close to forecasts, but JetBlue is the exception.

(JBLU)
Warning: It could be much worse than you expected loss In the current quarter.