Southwest Airlines’ Flight Cancelations Cost It $75 Million

Southwest’s cancelation extravaganza a couple of weeks ago wreaked havoc on the travel plans of tens of thousands of its customers. It also put a big dent in the airline’s October earnings – to the size of $75 million, to be precise. Southwest says it has now ‘reined in’ capacity to better align with the current staffing environment while embarking on a hiring spree of close to 5,000 new employees by the end of the year.

Southwest MAX
Southwest canceled 30% of its flights two Sundays ago. Photo: Vincenzo Pace | Simple Flying

Over 2,000 flights in three days

Even if you were not flying with Southwest over the past month, it has probably not escaped your notice that the airline had quite a significant amount of flight cancellations. The budget giant’s schedule nearly unraveled entirely over the weekend of the 9th to 10th of October. Southwest canceled more than 1,900 flights on Saturday and Sunday, and another 350 on the Monday that followed.

Early rumors suggested that the cancelations were due to pilots walking off the job or calling in sick in protest of the airline’s contested employee vaccine mandate. However, both the carrier itself, the Southwest Airlines Pilots Association, and even the FAA denied any such causality. The airline instead blamed the weather in Florida along with air traffic control issues. A domino effect putting people and planes out of their intended places was then compounded by a staffing shortage.

When publishing its financial results for the third quarter of 2021, Southwest acknowledged that flight cancelations in October alone had cost the airline $75 million. The negative impact was a result of the cancelations, related customer refunds, and ‘gestures of goodwill, the airline said.

Simple Flying has reached out to Southwest for more details but was yet to receive a response at the time of publication.

Southwest staff
Southwest’s management says the airline has recalibrated its schedule to adjust to its current staffing environment. Photo: Southwest Airlines

Conservative staffing assumptions ahead

Troubles with making departures brewed for many airlines over the summer as the industry struggled to re-staff at the same speed as the release of pent-up travel demand. In August, low-cost competition Spirit Airlines made headlines following three days of canceling up to 71% of its schedule. With the holiday season looming up ahead, how can carriers make sure they will not run into similar headwinds again?

“We have reined in our capacity plans to adjust to the current staffing environment, and our on-time performance has improved accordingly. We are aggressively hiring to a goal of approximately 5,000 new Employees by the end of this year, and we are currently more than halfway toward that goal,” Southwest’s Chief Executive Officer Gary Kelly said in a statement.

Southwest Airlines aircraft taking off
Beyond October, Southwest’s booking trends are in line with 2019 levels. Photo: Stephen M. Keller, Southwest Airlines

For October, the airline has an estimated revenue of 20% to 30% lower than that of 2019. However, booking trends from November onwards are in line with those from two years ago, Southwest says. While business revenue continues to lag behind leisure, there are recent trends suggesting demand is making a tentative comeback. As such, the carrier predicts revenue for the whole of Q4 to be down between 15% to 25% from 2019.

Were you or anyone you know affected by a Southwest cancelation this month? Leave a comment in the section below and share your story with us and other readers.