The historic wave of polar cold that hit the United States in December, which caused dozens of deaths, caused chaos in the management of the airline Southwest Airlines.
The company suffered chain flight cancellations and came to almost completely paralyze its operations as it was unable to overcome the effect of the first cancellations caused by the storm.
The company stopped operating 16,700 flights between December 21 and 31 and will therefore assume costs of 725 to 825 million dollars (from 690 to 780 million euros at the current exchange rate), as reported this Friday to the Commission of Securities and Exchange of the United States (the SEC, for its acronym in English).
The company will close the fourth quarter of the year in the red.
Hundreds of thousands of passengers were affected by flight delays and cancellations around Christmas, when vacation trips are frequent.
Baggage losses became widespread, sparking alarm from the authorities, who have asked companies to adequately compensate travelers.
None was hit as hard as Southwest.
Its systems crashed and it was unable to recover quickly from the cold shutdowns.
The company failed to try to reassign pilots and crews and that ended up causing a chain reaction with almost as many cancellations in the last 11 days of 2022 as in the entire year.
In its communication to the SEC, Southwest has explained that "as a result of the operational interruptions, the company currently expects to record a net loss in the fourth quarter of 2022, due to a negative pre-tax impact preliminarily estimated for the fourth quarter." 2022 of between 725 and 825 million dollars”.
Southwest explains that a significant portion of this impact is due to an estimated loss of revenue between $400 million and $425 million.
“The remaining impact is related to an estimated net increase in operating expenses, primarily due to estimated travel expense reimbursements to customers, the estimated value of Rapid Rewards points offered as a goodwill gesture to customers, and the payment of bonuses and additional compensation to employees, which is partially offset by lower fuel and oil expenses and profit sharing”, he adds.
In the first nine months of 2022, Southwest made a profit of $759 million, according to its latest quarterly report, which will be offset by fourth-quarter losses, which the company has yet to figure out.
The airline will publish its closing accounts for 2022 on January 26.
The company has promised to improve its systems, which is not the first time they have suffered a similar failure, which will imply additional costs.
In addition, there is the reputational damage and the company's brand image after leaving hundreds of thousands of travelers on the ground who had to find alternative flights or rent cars for long trips to reach their destinations.
The company did not provide accommodation, food or transportation to tens of thousands of customers who had to advance this expense themselves and who will now claim compensation from the company, under the scrutiny of regulators.
