Southwest Airlines lost $800 million during the holiday meltdown
Between December 21 and December 31, Southwest had to cancel over 16,700 flights—almost all of their flights scheduled for the holiday season
January 26, 2023 8:18pm
Updated: February 3, 2023 7:33pm
Southwest Airlines reported a pretax loss of $800 million after a computer system failure led to thousands of canceled flights during the holidays, marking the fourth consecutive quarter that the company reports losses.
"Due to the operational disruptions in late December, which resulted in more than 16,700 flight cancellations, we incurred a fourth-quarter pre-tax negative impact of approximately $800 million (or approximately $620 million on an after-tax basis), which resulted in a fourth-quarter 2022 net loss,” Southwest CEO Bob Jordan said in a statement.
Between December 21 and December 31, Southwest had to cancel over 16,700 flights—almost all of their flights scheduled for the holiday season. While the flight cancelations began due to a winter storm, they continued for days because its crew-scheduling system became overloaded. To make up for the almost 2 million customers that saw their flights affected, the airline offered 25,000 Rapid Rewards points.
“I want to apologize again to our customers and our employees for the impact the operational disruption had on them and on their holiday plans,” Jordan added. “We are intensely focused on reducing the risk of repeating that type of operational event again.”
Southwest is currently being investigated by the U.S. Transportation Department over claims that the airline deceived customers by scheduling more flights that it could not realistically operate.
“D.O.T. will leverage the full extent of its investigative and enforcement power to ensure consumers are protected, and this process will continue to evolve as the department learns more,” the agency said in a statement.