Southwest's Holiday Meltdown Will Cost Over $1 Billion

Southwest's holiday season belly-flop will cost the carrier between US$725 million (CAD$970 million) and US$825 million (CAD$1.1 billion), the airline estimates. The carrier now expects to record a net loss for Q4 2022.

In a filing with the Securities and Exchange Commission, Southwest reported that the 16,700 flights it cancelled between December 21 and 31 cost it between US$400 million and US$425 million in revenue.

Hundreds of millions more is being spent in reimbursements to customers for items such as hotels, transportation, and meals and misplaced bags. As well, Southwest is giving 25,000 Rapid Rewards points to customers who were scheduled to fly between December 24 and January 2 but whose flights were either cancelled or delayed by more than three hours.

In a video message, Southwest CEO Bob Jordan said the carrier is processing tens of thousands of refunds and reimbursements each day. He also stated that the vast majority of misplaced bags have been returned or are on their way to customers.

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