Mass Flight Cancellations Cost Southwest Airlines $75 Million, Company Says

Southwest Airlines announced Thursday that the disruptions and mass flight cancellations which plagued it earlier this month cost it $75 million in revenue. The company also announced a reduction of its flying schedule due in part to ongoing operational issues.

Gary Kelly, Chairman and President of Southwest Airlines, spoke... [+] at the 13th Annual Aviation Summit, held at the Walter E. Washington Convention Center, April 3, 2014. Washington, DC. The US Chamber of Commerce Foundation hosts the summit. AFP PHOTO/Mandel NGAN (Photo taken by Mandel NGAN / AFP). (Photo credit should be read MANDEL NGAN/AFP via Getty Images. AFP via Getty Images

The Key Facts

The Dallas-based airline reported its third quarter profit on Thursday. It also revealed the revenue loss that resulted from the cancellations of more than 2,000 flights earlier in the month. Southwest reported that it suffered a loss of $75 million due to cancellations, customer refunds, and other gestures of goodwill. The company also said that the 40 million dollars in revenue lost by Covid-19 Delta variant was largely responsible. The airline announced Thursday that its fourth quarter flight schedule was reduced by 8% from prepandemic levels due to both the airline's recovery and the ongoing struggle to hire enough workers. Bloomberg reports that this is the second time the airline has reduced its schedule since August, when it was about 12% less than two years ago.

Important Quote

In response to current staffing conditions, we have reduced our capacity plans. CEO Gary Kelly stated in a statement. The capacity planning for 2022 is more conservative than our historical norm.

Important Background

Southwest's flight meltdown earlier in the month put it in the national spotlight. It was speculated that cancellations caused by employee strikes occurred because of the timing of the disruptions. Southwest had to implement the mandate due to disruptions caused by Southwest's pilots union. This was just days before. Both the union and the company claimed that the disruptions were caused by bad weather, and an air traffic control program imposed by Federal Aviation Association.


Southwest announced earlier this week that it will scrap its plan to allow unvaccinated employees who are seeking medical exemptions to be on unpaid leave, if they still have not received their request by the December federal deadline. Southwest had planned to place workers who requested religious or medical exemptions on unpaid leaves if they were still pending by December 8, the deadline President Biden set for federal contractors to get workers vaccined.

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