Even with free bags, Southwest collected
$642 million in passenger fees in 2018.
Southwest Airlines’ heavy flight cancellations and delays, now in their fourth week due to maintenance woes, are taking a big financial toll on the airline.
“The damage to the company runs into the millions of dollars weekly,” Southwest CEO Gary Kelly said in a presentation at the J.P. Morgan aviation conference in New York Tuesday.
The costs for delays and cancellations includes lost revenue from travelers who request refunds when flights are canceled, vouchers, hotel costs and other expenses for affected passengers and any lost revenue if passengers book away from Southwest.
Southwest has had an unprecedented number of airplanes out of service, double the usual amount, and the airlines blames it on a small group of its 2,700 mechanics. It says they are writing up more airplanes for maintenance issues, many of them minor, to force planes out of service and pressure the airline into a new contract. The airline last week sued its mechanics union, the Aircraft Mechanics Fraternal Association.
Union members rejected a tentative agreement with the airline last fall. The recent troubles began after resumed talks broke off.
Kelly said the contract talks, under the oversight of a federal mediator, have “dragged on” long enough. The two sides are due to meet again later this month.
The union has repeatedly said Southwest is making mechanics the scapegoat for the flight troubles. They fired back at Kelly again Tuesday after he brought up the financial toll at the airline conference.
“The fact that Southwest Airlines and Gary Kelly are trying to pin recent losses on their aircraft maintenance technicians and contract negotiations is alarming,” the union said in a statement. “Southwest’s self-imposed “state of operational emergency” is a reaction to the increased FAA oversight and a way to distract the public from Southwest’s own degrading safety standards.”
Southwest has led the industry in flight cancellations and delays for weeks, with daily cancellations topping 100 flights on most days.
On Tuesday, the airline canceled 118 flights, or 2 percent of its scheduled flights, more than any carrier, according to FlightAware.
The airline has canceled 72 Wednesday flights, accounting for more than half of all cancellations on flights into, within or out of the United States, FlightAware says.
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