Southwest suffered a $220 million loss due to massive flight cancellations in December 2022
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American airline Southwest Airlines completed fourth quarter 2022 with a net loss of $220 million, or $0.38 per share. This is much worse than the forecast of analysts polled by Refinitiv and expected a loss of $0.12 per share. In addition, Southwest was the only major US carrier to end the fourth quarter worse than analysts had forecast.
Southwest’s poor quarterly reporting stems from the airline’s massive flight cancellations last December due to heavy snowfalls in the US. Between December 21 and 31, Southwest, the largest domestic carrier in the United States, canceled about 16.7 thousand flights. This resulted in a loss of about $800 million in revenue for the quarter.
“In January 2023, the company experienced an increase in flight cancellations and slowdowns in bookings, primarily for travel in January and February 2023, which are believed to be related to operational disruptions in December 2022,” the carrier said in a report. In addition, the airline warned that the cancellation of flights in January due to failure in the country’s pilot alert system will also have a negative impact on reporting for the first quarter of 2023.
As a result, Southwest’s share price fell more than 5% on the New York Stock Exchange.
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