Southwest Airlines said it would change its fourth-quarter financial forecast to a net loss after a computer malfunction and bad weather caused thousands of delays and cancelations.
The travel chaos caused by Southwest was expected to cost the carrier between $725 million and $825 million in lost revenue.
The airline reduced capacity by four points in the fourth quarter compared to the previous year. Southwest canceled more than 16,000 flights.
The carrier offered a tailored gesture of goodwill and an apology. Southwest CEO Bob Jordan apologized to customers on Tuesday and gave them 25,000 Rapid rewards points.
The airline will honor reasonable requests for reimbursement for meals, hotel accommodations, and alternate transportation, as well as improve the processes and systems that caused the travel disruptions during the holidays.
The Senate will be holding hearings on how to strengthen consumer protections and airline operations after speaking with Jordan and Pete Buttigieg.
Jordan gave an update on the airline's recovery progress and what the company is doing to take care of impacted customers.
Everyone, hello. Southwest Airlines updated Bob Jordan.
We need to restore the trust of our customers and employees.
When some of our systems and processes became stressed by the winter storm, we disrupted holiday travel for millions of people. The issues that contributed to it are being addressed immediately.
I apologize for the impact these challenges have had on our employees and customers. We aim to do the right thing when we fall short, because we have a long and proud record of delivering.
We started an all hands on deck effort to take care of our customers after we apologized. We are processing tens of thousands of refunds and reimbursements a day and will not stop until we have responded to every customer. 25,000 Rapid Rewards Points were sent to all customers who had been disrupted. The work that continues around the clock is due to the goodwill gesture.
Since the beginning of our recovery, we've had large teams of employees return disrupted passengers to their homes. Most of the bags are either on their way to our customers or have been separated.
Our employees come together. It's hard to see the spirit of the Southwest in such a bad situation.
I expect the review of the disruption to be completed quickly because our Leadership team is focused on it. Immediate actions have been taken to mitigate the risk of this happening again, and the review work will inform additional actions and investment. We are in regular communication with our Board of Directors and have asked our unions to participate in the review effort.
We spend a lot of money on technology. We will upgrade the tools and processes we use to serve you, our valued Customers, and make sure those items deliver on our mission: to connect people to what's important in their lives through friendly, reliable, and low-cost air travel. We have a proud 51-year history of doing that, and I'm confident we'll continue to deliver on this important promise.
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