Southwest: Chaos due to cancelled flights could cost the company US$825 million
Southwest Airlines reported Friday that the chaos caused by the cancellations of thousands of flights could cost the airline an estimated $825 million.
The airline cancelled over 16,000 flights during a busy week of holiday travel, leaving many stranded.
Some travellers have taken to social media to say they are yet to receive payments.
Others are waiting to be reunited with lost baggage, BBC reported.
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In a statement this week, 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 apologised for the disruptions and has offered passengers 25,000 travel points – which the airline says is equivalent to over $300 – as a “gesture of goodwill”.
Southwest has in part blamed a deadly winter storm in the US and Canada for the cancellations, which occurred between 21 December to 2 January.
But the airline took longer than other major carriers to bounce back from the weather, and analysts have said a host of factors caused the meltdown, including staffing shortfalls and the airline’s “point-to-point” system for how it designs its routes.
The disruptions could cost Southwest between $725m to $825m, the company said in a filing with the US Securities and Exchange Commission on Friday.
It expects to lose as much as $425m in lost revenue directly from the mass cancellations. Other costs include reimbursements for expenses passengers incurred due to the disruptions and extra pay for employees because of the chaos.
The White House has said it would seek to fine Southwest if the carrier fails to appropriately reimburse customers for the cancellations.
One Southwest passenger has already taken legal action against the company.
Eric Capdeville, a Louisiana resident, filed a class action lawsuit against the airline this week, alleging the company only provided credit vouchers and not a direct refund when his flight was cancelled.
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