Southwest Airlines (NYSE:LUV) canceled more than 16,700 flights during the busy December holiday travel period as its software couldn’t keep pace with brutal coast-to-coast winter weather.
The airline now plans to apologize before a Senate panel on Thursday – over the meltdown that stranded travelers around Christmas – and promise that there will not be a repeat.
“Let me be clear: We messed up. In hindsight, we did not have enough winter operational resilience,” said COO Andrew Watterson in written testimony. ”We are confident in our flight network and the schedules we have published for sale. The upgrade to the Crew software will equip us to better handle recovery from a mass cancellation event.”
Southwest (LUV) has also hired consulting firm Oliver Wyman to review the meltdown, and expects the results in the coming weeks.
The debacle caused a $800M pretax hit last quarter that led to a $220M loss. Southwest (LUV) has additionally said it could lose $300M-$350M in revenue at the start of the year tied to the December disruptions.
Wall Street analysts assign a Buy rating to LUV stock, while an SA Quant analysis gives it a Hold rating – with highest factor grades given to growth. Here’s a comparative rating of the company against its peers:
Further reading from SA contributors: ‘Is Southwest Airlines A Good Investment After Its Epic Holiday Meltdown?’
Southwest to reiterate confidence in flight network after December debacle
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