Southwest flight upheaval a 'system failure,'
12-28-2022, 08:47 AM
#1
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Southwest flight upheaval a 'system failure,'
WASHINGTON (Reuters) -U.S. Transportation Secretary Pete Buttigieg on Wednesday ratcheted up pressure on Southwest Airlines ( LUV ), saying thousands more canceled flights indicated a system failure at the low-cost carrier.
"We are past the point where they could say this is a weather-driven issue," Buttigieg said in an interview posted by ABC News on its website. "Don't get me wrong, all of this began with that severe storm. We saw winter weather affecting the country and severely disrupting all airlines."
Nationwide, at least 60 people died in weather-related incidents in recent days, NBC News reported.
The rest of the aviation system and other airlines seemed to be back from the weather disruptions, Buttigieg said.
"So what this indicates is a system failure (at Southwest ( LUV )), and they need to make sure that these stranded passengers get to where they need to go and that they are provided adequate compensation, not just for the flights itself ... but also things like hotels, like ground transportation, like meals because this is the airlines' responsibility," he said, adding that he had spoken to the company's leadership.
U.S. airlines had canceled thousands of flights as a massive winter storm swept over much of the country before and during the Christmas holiday weekend, but Southwest's ( LUV ) woes have deepened while other airlines have largely recovered.
Southwest ( LUV ) has canceled a total of more than 14,500 flights since Friday. On Wednesday it canceled 2,500 flights as of late morning, according to the flight tracking website FlightAware.
Southwest ( LUV ) told Reuters that it would reimburse customers for travel-related costs and had already processed thousands of requests by Tuesday.
Delta Air Lines said in an email it had capped fares in all markets where Southwest ( LUV ) operates, including domestic and international markets. The program includes over 700 nonstop markets and are valid through Dec 31. United and American announced similar programs.
U.S. Representative Rick Larsen, the top Democrat on the House Transportation and Infrastructure Committee, said in a tweet that the company was treating flight cancellations as "controllable" beginning Dec. 24, which triggers reimbursement for incidental expenses and refunds for full fares.
The airline's CEO, Bob Jordan, said the low-cost carrier needed to upgrade its legacy airline systems and apologized to customers and employees in a video message.
Shares of Southwest ( LUV ) tumbled 6% on Tuesday and were down about 1.5% in morning trading on Wednesday. Some analysts said the cancellations will pressure profits in the fourth quarter.
"The total impact to revenue could be in the 9% range of our expected Q4 revenue, which compares to our current estimate with revenues 15% ahead of 2019 levels in 2022" Jefferies analyst Sheila Kahyaoglu said.
Kahyaoglu estimated total EBITDAR (earnings before interest, taxes, depreciation, amortization and restructuring or rent costs) impact from the cancellations could be in the range of $700 million.
"We are past the point where they could say this is a weather-driven issue," Buttigieg said in an interview posted by ABC News on its website. "Don't get me wrong, all of this began with that severe storm. We saw winter weather affecting the country and severely disrupting all airlines."
Nationwide, at least 60 people died in weather-related incidents in recent days, NBC News reported.
The rest of the aviation system and other airlines seemed to be back from the weather disruptions, Buttigieg said.
"So what this indicates is a system failure (at Southwest ( LUV )), and they need to make sure that these stranded passengers get to where they need to go and that they are provided adequate compensation, not just for the flights itself ... but also things like hotels, like ground transportation, like meals because this is the airlines' responsibility," he said, adding that he had spoken to the company's leadership.
U.S. airlines had canceled thousands of flights as a massive winter storm swept over much of the country before and during the Christmas holiday weekend, but Southwest's ( LUV ) woes have deepened while other airlines have largely recovered.
Southwest ( LUV ) has canceled a total of more than 14,500 flights since Friday. On Wednesday it canceled 2,500 flights as of late morning, according to the flight tracking website FlightAware.
Southwest ( LUV ) told Reuters that it would reimburse customers for travel-related costs and had already processed thousands of requests by Tuesday.
Delta Air Lines said in an email it had capped fares in all markets where Southwest ( LUV ) operates, including domestic and international markets. The program includes over 700 nonstop markets and are valid through Dec 31. United and American announced similar programs.
U.S. Representative Rick Larsen, the top Democrat on the House Transportation and Infrastructure Committee, said in a tweet that the company was treating flight cancellations as "controllable" beginning Dec. 24, which triggers reimbursement for incidental expenses and refunds for full fares.
The airline's CEO, Bob Jordan, said the low-cost carrier needed to upgrade its legacy airline systems and apologized to customers and employees in a video message.
Shares of Southwest ( LUV ) tumbled 6% on Tuesday and were down about 1.5% in morning trading on Wednesday. Some analysts said the cancellations will pressure profits in the fourth quarter.
"The total impact to revenue could be in the 9% range of our expected Q4 revenue, which compares to our current estimate with revenues 15% ahead of 2019 levels in 2022" Jefferies analyst Sheila Kahyaoglu said.
Kahyaoglu estimated total EBITDAR (earnings before interest, taxes, depreciation, amortization and restructuring or rent costs) impact from the cancellations could be in the range of $700 million.
12-28-2022, 02:14 PM
#6
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Position: B-737NG preferably in first class with a glass of champagne and caviar
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In the real world, the DOT would lift, such an incompetent carrier’s economic authority to operate, the FAA would call such an indifferent carrier’s interest in their fare paying passenger’s certificate to operate in question. Such occasions have occurred in the past… why not now? The 119 mob demonstrated nothing short of arrogance toward their responsibilities leading up to this debacle! What an non excusable embarrassment to the industry!
12-28-2022, 08:31 PM
#7
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Joined APC: Nov 2022
Posts: 240
People on the internet are needlessly vicious and this thread is a great example. My family has flown SWA for many years and been happy doing so. We’ll keep flying them. (Though I will say we’re glad we’re not flying them this week.)
Not the first airline to have an epic meltdown, won’t be the last.
Not the first airline to have an epic meltdown, won’t be the last.
12-29-2022, 06:35 AM
#8
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Joined APC: Mar 2015
Posts: 963
Originally Posted by captjns
In the real world, the DOT would lift, such an incompetent carrier’s economic authority to operate, the FAA would call such an indifferent carrier’s interest in their fare paying passenger’s certificate to operate in question. Such occasions have occurred in the past… why not now? The 119 mob demonstrated nothing short of arrogance toward their responsibilities leading up to this debacle! What an non excusable embarrassment to the industry!
12-29-2022, 06:44 AM
#9
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Joined APC: Jan 2021
Posts: 1,121
The top comment on yahoo finance for LUV.
“My family and I live in the Dallas area. On 12/25/22, we arrived at Love Field at 8:30 a.m. and were scheduled to leave at 11:00 a.m. on a flight to Atlanta, GA where we were having a family reunion with my husband's family. We checked three bags. At about 9:30 a.m., our flight started being "delayed" by increments. At about 4:30 p.m., they announced the flight was cancelled. We then stood in a line for about two hours or more to try to get another connection. At about 6:45 p.m., they rerouted us to Milwaukee, Wisconsin, to spend the night there, and leave the morning of 12/26/22 to Atlanta. The flight to Milwaukee was to leave at 10:00 p.m. or so. That flight started being delayed and at 11:30 p.m. or so, they announced that flight was cancelled also. We were told to go to baggage claim area to retrieve our luggage. We then stood in line until 2:00 a.m. and discovered that our luggage had been flown to our "final destination" in Atlanta. We requested the bags to be flown back to Dallas and we still don't have them as of 12/28/22. We finally arrived home at 3:00 a.m. the morning of 12/26/22. We sat at the airport or stood in lines at the airport for 17 1/2 hours. Fortunately, since we live in the area, we finally retrieved our car and drove home. Others were sleeping on benches and on the floor of the airport. Inexcusable in every way!”
Yikes.
“My family and I live in the Dallas area. On 12/25/22, we arrived at Love Field at 8:30 a.m. and were scheduled to leave at 11:00 a.m. on a flight to Atlanta, GA where we were having a family reunion with my husband's family. We checked three bags. At about 9:30 a.m., our flight started being "delayed" by increments. At about 4:30 p.m., they announced the flight was cancelled. We then stood in a line for about two hours or more to try to get another connection. At about 6:45 p.m., they rerouted us to Milwaukee, Wisconsin, to spend the night there, and leave the morning of 12/26/22 to Atlanta. The flight to Milwaukee was to leave at 10:00 p.m. or so. That flight started being delayed and at 11:30 p.m. or so, they announced that flight was cancelled also. We were told to go to baggage claim area to retrieve our luggage. We then stood in line until 2:00 a.m. and discovered that our luggage had been flown to our "final destination" in Atlanta. We requested the bags to be flown back to Dallas and we still don't have them as of 12/28/22. We finally arrived home at 3:00 a.m. the morning of 12/26/22. We sat at the airport or stood in lines at the airport for 17 1/2 hours. Fortunately, since we live in the area, we finally retrieved our car and drove home. Others were sleeping on benches and on the floor of the airport. Inexcusable in every way!”
Yikes.
12-29-2022, 06:48 AM
#10
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Joined APC: Oct 2015
Position: Gear slinger
Posts: 2,909
Originally Posted by three1five
People on the internet are needlessly vicious and this thread is a great example. My family has flown SWA for many years and been happy doing so. We’ll keep flying them. (Though I will say we’re glad we’re not flying them this week.)
Not the first airline to have an epic meltdown, won’t be the last.
Not the first airline to have an epic meltdown, won’t be the last.
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