Southwest Airlines warned Thursday that it expects to report another loss in the first quarter as costs add up from the operational meltdown that canceled nearly 17,000 flights during the holiday and left millions of passengers stranded.
“Based on current revenue and cost trends, we currently expect a first quarter 2023 net loss. However, we are encouraged by current booking trends in March 2023,” said CEO Bob Jordan in a statement.
Operating revenue for the first quarter is expected to grow by 20% to 24% with available seat miles up approximately 10%.
In its fourth quarter earnings report, the discount airline reported a net loss of $220 million due to the operational disruption which cost the airline approximately $800 million. However, the air carrier still reported an adjusted annual profit of $723 million for the full 2022 fiscal year.
Operating revenue rose 7.7% to a record $6.2 billion.
The largest domestic carrier warned earlier this month that it expected the disruption that occurred between Dec. 21 and Dec. 31 to result in a pre-tax negative impact in the range of $725 million to $825 million.
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But this problem, which is now being investigated by federal officials, is still costing the airline.
On Thursday, Jordan also reiterated how “deeply sorry” he was to employees and customers for the meltdown, adding that the carrier has taken steps to “bolster our operational resilience and are undergoing a detailed review of the events.”
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The comments come just a day after the U.S. Transportation Department announced that it was investigating whether Southwest Airlines deceived customers by knowingly scheduling more flights in late December than it realistically could handle.
“DOT is in the initial phase of a rigorous and comprehensive investigation into Southwest Airlines’ holiday debacle that stranded millions,” the department said in a statement.
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Southwest said its holiday schedule “was thoughtfully designed” with “a solid plan to operate it, and with ample staffing.”
However, it pledged to cooperate with any government inquiries and is “focused on learning from this event” and reducing the risk of a repeat.
The Associated Press contributed to this report.
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