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Southwest estimates its December meltdown will cost it up to $825 million in lost revenue, passenger reimbursements, and other costs

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Southwest Airlines estimated Friday that its December meltdown will cost it up to $825 million in lost revenue, passenger reimbursements, and other costs. 

The airline said it expected to report a net loss for the fourth quarter, having previously forecast a “strong profit.”

Southwest canceled more than 16,700 flights between December 21 and 31 as a bitter winter storm wrought havoc on its operations during the busy end-of-year travel period.

Southwest said Friday it expected a negative pre-tax impact of between $725 million and $825 million for the fourth quarter “as a result of the operation disruptions.”

It said a “significant proportion” of this would come from an estimated revenue loss of between $400 million and $425 million. The rest would come from passenger reimbursements, premium pay and additional compensation to employees, and other costs, it said.

Southwest didn’t immediately respond to Insider’s request for comment.

Southwest CEO Bob Jordan said Thursday: “I’ve said it before, but I can’t say it enough how sorry I am for the impact these challenges have had on our employees and our customers. We have a long and proud record of delivering on expectations, and when we fall short, we aim to do the right thing.”

He announced a “goodwill gesture” of 25,000 frequent flyers points this week to all customers significantly disrupted by the cancellations. “That goodwill gesture is above and beyond the refunds and reimbursements work that continues around the clock.”

This is a developing story. Please check back for updates.

Read the original article on Business Insider
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