Southwest Airlines announced cuts to their flight schedule on Thursday after thousands of canceled flights earlier this month reportedly cost them $75 million.
The Dallas-based airline canceled over 2,000 flights between October 8 and October 13, officially blaming the cancellations on disruptive weather and air traffic control issues. However, there was speculation the cancellations occurred due to Southwest employees protesting the company’s vaccine mandate.
“There’s just no evidence of that,” Southwest Airlines CEO Greg Kelly said when speaking about the cancellations. “Our people are working very hard. I’m very proud of them, especially when we get into a difficult situation like this.”
The cancelations cost the company $75 million, and they plan to trim their flight schedule to make up for it, CNBC reported. In their third-quarter earnings release, Southwest said the cancellations, customer refunds, and “gestures of goodwill” contribute to the estimated $75 million loss.
Southwest Airlines posted quarterly revenue of $4.68 billion, which surpassed expectations of $4.58 billion. Further, the company reported a loss of 23 cents per share on an adjusted basis, surpassing expectations of a 27 cents per share loss. The company’s profit for this period was $446 million, compared to the $1.6 billion loss during last year’s third quarter. Southwest attributes their profit increase to boost from federal aid and voluntary leaves of absence by employees.
The airline company said staffing shortfalls contributed to problems over the summer. The company initially planned to fly at 95 percent capacity for its December schedule. However, after the $75 million hit, the airline announced on Thursday it would scale back flights to 92 percent capacity. Southwest’s 2022 schedule will reflect “more conservative staffing assumptions, as well, all compared to historical norms.”
Most airlines last year dealt with weak demand as the coronavirus pandemic ravaged the country. However, this summer, travel demands increased, which caught many airlines off-guard.
“I would be the first to say things are messy,” said Mr. Kelly. “We’ve gone from not enough to do to too much to do in a very short period of time.”