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Southwest Airlines falls 5% after it cancels thousands of flights over the holiday weekend, with more cancellations spilling over into the rest of this week

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Canceled flight travelers line for booking in front of a Southwest Airlines sign at Denver International Airport in Denver, ColoradoCanceled flight travelers line up in front of Southwest Airlines sign at Denver International Airport.

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  • Southwest Airlines fell 5% on Tuesday after the company canceled 2,900 flights on Monday.
  • Bad weather and crew shortages drove Southwest’s 62% cancellation rate, compared to just 2% for other airlines.
  • The airline said it expects more cancellations to spillover into this week, with another 2,800 flights canceled on Tuesday.

Southwest Airlines stock dropped 5% on Tuesday after the company canceled thousands of flights over the holiday weekend.

A combination of bad weather, crew shortages, and outdated internal technology snowballed into a logistical nightmare for the airline, with Southwest cancelling nearly 3,000 flight on both Monday and Tuesday.

While the bad weather led to flight delays and cancellations for all airline companies before Christmas, those issues eased for all other airlines except for Southwest. According to data from FlightAware, Southwest had a 62% cancellation rate, compared to the low single digits for other major airlines.

Southwest said it expects the issues to persist into this week ahead of New Years, which is another busy travel weekend.

“Part of what we’re suffering is a lack of tools,” Southwest CEO Bob Jordan said in a message to staff on Sunday, according to CNBC. “We’ve talked an awful lot about modernizing the operation, and the need to do that. And Crew Scheduling is one of the places that we need to invest in. We need to be able to produce solutions faster.”

The Department of Transportation said it would probe Southwest’s cancellation problems and make sure that the company is complying with its customer service plan, which entails the company providing hotel and meal credits if flights are canceled for non-weather related issues.

In a tweet, the DOT said it was “concerned by Southwest’s unacceptable rate of cancellations and delays & reports of lack of prompt customer service.”

Read the original article on Business Insider
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