May 2, 2023
Southwest Airlines, a U.S.-based airline, reported a net loss of $159 million in the first quarter of 2023. The loss is due to a $380 million damage from an operational outage in December 2022.
The event led the firm to cancel around 17,000 flights during the holiday vacation season, resulting in a $325 million revenue loss. Bookings for January and February 2023 travel have also slowed as a result of the tragedy. The event adds to the $800 million in expenses disclosed by the airline in the previous quarter, increasing the total to more than $1.1 billion.
Southwest announced a $1 billion investment in technological and operational changes in December 2022 as part of a five-year modernization plan. The operational interruption, however, showed critical deficiencies in its technology and processes, causing the airline to increase the sum to $1.3 billion in February 2023. Despite the setbacks, the airline ranked second among domestic carriers in on-time performance in Q1 2023, according to MasFlights data cited in the earnings report.
Southwest has issued an action plan outlining immediate remediation objectives, with initial enhancements set to be completed in October 2023.
The sources for this piece include an article in CIODIVE.
