Southwest posts wider-than-expected loss as toll of holiday crisis stretches into 2023

Southwest lost $159m in Q1 as the financial impact of its holiday meltdown stretched well into 2023. The carrier canceled more than 16,000 flights in the final days of December when staffing software couldn’t keep pace with scheduling changes during coast-to-coast storms. The incident resulted in a $325 million revenue impact for Q1, Southwest said. The company had warned of a loss for the quarter in January and said it logged an increase in customer cancellations early this year. Southwest shares were down more than 3% in afternoon trading after releasing results. Here’s how Southwest performed in the first quarter, compared with Wall Street expectations according to Refinitiv consensus estimates: Adjusted loss per share: 27 cents vs an expected loss of 23 cents; Total revenue: $5.71 billion vs an expected $5.73b. Revenue rose more than 21% from a year ago to $5.71b. Southwest’s net loss for the period of $159m is likewise an improvement over the same period last year, when it lost $278m. The Dallas-based carrier said it expects revenue headwinds into the second quarter but said it expects a profit for the three months ending June 30. Revenue per available seat mile is expected to be down 8% to 11% in Q2 from last year, with capacity up 14%, Southwest said. The carrier said its sales outlook was impacted by about $300m “breakage revenue” because of a “higher-than-normal amount related to flight credits issued during the pandemic that were set to expire unused.” Southwest said it eliminated expiration dates on flight credits last summer.<br/>