Southwest Reveals Impact of Flight Chaos on Earnings. The Stock Is Falling. -- Barrons.com
Southwest Airlines said Friday it expects to post a net loss in the fourth quarter, driven by mass cancellations over the holiday season.
The carrier estimated a hit of $725 million to $825 million from the disruption, which saw it cancel more than 16,000 flights between Dec. 21 and Jan. 2. Bad weather displaced crews all over the country, leading the airline to operate a reduced schedule for a number of days.
The chaos cost Southwest (ticker: LUV) an estimated $400 million to $425 million in lost revenue, it said, while the rest was made up by reimbursements to customers, the value of its goodwill gesture of 25,000 frequent flier points to those affected, and extra pay and compensation for employees.
At the end of October, the airline said it expected to generate "strong profits" in the final quarter of the year, barring any significant unforeseen events.
Analysts expect the company to report earnings per share of $0.59, according to FactSet data.
The stock pointed more than 1% lower in premarket trading Friday, and has fallen more than 8% since Dec. 21.
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(END) Dow Jones Newswires
January 06, 2023 07:41 ET (12:41 GMT)
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