PanaTimes

Friday, Feb 03, 2023

Southwest flight upheaval a 'system failure,' U.S. says

Southwest flight upheaval a 'system failure,' U.S. says

U.S. Transportation Secretary Pete Buttigieg on Wednesday ratcheted up pressure on Southwest Airlines (LUV.N), 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), 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 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 woes have deepened while other airlines have largely recovered.

Southwest has canceled a total of more than 14,500 flights since Friday. On Wednesday it canceled 2,500 flights, according to the flight tracking website FlightAware.

Southwest told Reuters it would reimburse customers for travel-related costs and had already processed thousands of requests.

It also said employees across the airline were helping crews in many functions.

Delta Air Lines (DAL.N) said in an email it had capped fares in all domestic and international markets where Southwest operates. The program includes over 700 nonstop markets and are valid through Dec 31. United and American announced similar programs.

U.S. Representative Rick Larsen, 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.

Southwest CEO Bob Jordan said the low-cost carrier needed to upgrade its legacy systems and apologized to customers and employees in a video message.

Shares of Southwest tumbled over 5% on Wednesday after diving 6% on Tuesday. 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.
Newsletter

Related Articles

PanaTimes
Close
0:00
0:00
EU found a way to use frozen Russian funds
First generation unopened iPhone set to fetch more than $50,000 at auction.
WARNING GRAPHIC CONTENT - US Memphis Police murdering innocent Tyre Nichols
House Speaker Kevin McCarthy said he will block Reps. Adam Schiff and Eric Swalwell from serving on the House Intelligence Committee
Almost 30% of professionals say they've tried ChatGPT at work
Interpol seeks woman who ran elaborate exam cheating scam in Singapore
What is ChatGPT?
Bill Gates is ‘very optimistic’ about the future: ‘Better to be born 20 years from now...than any time in the past’
Tesla reported record profits and record revenues for 2022
Germany confirms it will provide Ukraine with Leopard 2 tanks
Prince Andrew and Virginia Giuffre Photo Is Fake: Ghislaine Maxwell
Opinion | Israel’s Supreme Court Claims a Veto on Democracy
Moonwalker Buzz Aldrin Gets Married On His 93rd Birthday
Who’s Threatening Israeli Democracy?
Federal Reserve Probes Goldman’s Consumer Business
China's first population drop in six decades
Microsoft is finalising plans to become the latest technology giant to reduce its workforce during a global economic slowdown
Tesla slashes prices globally by as much as 20 percent
1.4 Million Copies Of Prince Harry's Memoir 'Spare' Sold On 1st Day In UK
After Failing To Pay Office Rent, Twitter May Sell User Names
Lisa Marie Presley, singer and daughter of Elvis, dies aged 54
FIFA president questioned by prosecutors
Britain's Sunak breaks silence and admits using private healthcare
Hype and backlash as Harry's memoir goes on sale. Unnamed royal source says prince 'kidnapped by cult of psychotherapy and Meghan'
Saudi Arabia set to overtake India as fastest-growing major economy this year 
Google and Facebook’s dominance in digital ads challenged by rapid ascent of Amazon and TikTok
FTX fraud investigators are digging deeper into Sam Bankman-Fried's inner circle – and reportedly have ex-engineer Nishad Singh in their sights
TikTok CEO Plans to Meet European Union Regulators
France has banned the online sale of paracetamol until February, citing ongoing supply issues
Japan reportedly to give families 1 million yen per child to move out of Tokyo
Will Canada ever become a real democracy?
Hong Kong property brokerages slash payrolls in choppy market
U.S. Moves to Seize Robinhood Shares, Silvergate Accounts Tied to FTX
Effect of EU sanctions on Moscow is ‘less than zero’ – Belgian MEP
Coinbase to Pay $100 Million in Settlement With New York Regulator
FTX assets worth $3.5bn held by Bahamas securities regulator
A Republican congressman-elect is under investigation in New York after he admitted he lied about his education and work experience.
Brazilian football legend Pele, arguably the greatest player ever, has died at the age of 82.
Hong Kong to scrap almost all its Covid rules
EU calls screening of travellers from China unjustified
US imposes Covid testing for visitors from China
Ukraine President Volodymyr Zelenskyy Addresses Joint Session of Congress - FULL SPEECH
Where is Rishi? Chancellor Jeremy Hunt's excuses about the UK's economic challenges just don't make sense
Former FTX CEO Bankman-Fried finally arrested in Bahamas after U.S. files charges
Corruption works: House Financial Services Chair Waters doesn't plan to subpoena her donor, Sam Bankman-Fried, to testify at hearing on FTX collapse
Ronaldo's new contract...
Prince William's godmother resigns honorary royal role after exposing her/their racism
Tax fraud verdict again exposes illusion of Trump the master businessman
Tax fraud verdict again exposes illusion of Trump the master businessman.
Yellen hints at ‘national security’ probe into Twitter purchase
×