Southwest Airways shares fall after mass flight cancellations

Southwest Airlines shares plummeted Monday after more than 2,000 flights were canceled and thousands of people’s travel plans were mixed up since Saturday.

Southwest’s operations have improved since the weekend’s meltdown, but cancellations continued. According to flight tracking site FlightAware, 363 flights were canceled on Monday, up from 1,124 on Sunday, representing 30% of its flight schedule.

The airline has already announced that it will cut its autumn flight schedules to avoid cancellations and delays that would affect its operations in the summer. Now the wearer weighs up whether he needs to cut any more.

Mike Van de Ven, COO of the Dallas-based airline, who was also promoted to president last month, told staff late Sunday that Southwest was still understaffed and “we will have to keep adjusting our schedules as this environment develops.”

Travelers wait to check-in at the Southwest Airlines ticket booth at Baltimore Washington International Thurgood Marshall Airport on October 11, 2021 in Baltimore, Maryland.

Kevin Dietsch | Getty Images

“We have already significantly reduced our previously published schedules for November and December, and if we feel we need to do more, we will,” Van de Ven said in a recorded message to staff verified by CNBC became.

Southwest shares lost 4.2% on Monday to close at $ 51.67. American added 0.3% and ended at $ 20.13, United was nearly unchanged at $ 49.18, and Delta fell 0.4% to $ 43.19.

In August, Southwest trimmed its flight schedule in hopes of resolving its summer operational problems that regularly resulted in dozens of flight cancellations. Pilots, flight attendants and other personnel complained of exhaustion from their busy schedules.

The weekend’s troubles arose amid speculation that they were being driven by excessive employee sick days in connection with a federal vaccination mandate for state contractors that Southwest announced to its employees this month that it would enforce this fall.

Southwest said it was “inaccurate” and “unfounded”. Casey Murray, president of the Southwest Airlines Pilots Association, said pilot sick leave levels were average over the past few months, as was the number of crews on open shifts, but declined to provide details.

Like some of its competitors, the airline has been struggling with staff shortages for months. Southwest and other airlines urged staff to buy-ins or leave during the height of the coronavirus pandemic, only to recover demand faster than expected.

Van de Ven, President of Southwest, admitted that the airline “is still not where we need staff and especially flight crews”.

“Our models use different assumptions” for the use of substitute staff known as reserve, open trips, weather, sickness and overtime hours and “we seem closer to these values ​​during the week and then staffing is scarce during the time” that Weekends. “

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