There are problems at two of the nation’s top five airlines. Labor problems.
25.08.2023 - 14:18 / skift.com / Edward Russell / Southwest Airlines / Pranavi Agarwal / Bob Jordan / Matthew Parsons
Good morning from Skift. It’s Friday, January 27. Here’s what you need to know about the business of travel today.
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Southwest Airlines is still picking up the pieces from its enormous holiday season meltdown that saw it cancel nearly 17,000 flights. The Dallas-based carrier doesn’t expect to make a complete financial recovery until March, reports Edward Russell, editor of Airline Weekly, a Skift brand.
Southwest revealed during its fourth-quarter earnings call on Thursday that it expects at least a $300 million hit in revenue in January and February. That’s in addition to the roughly $800 million hit Southwest suffered in December. But the company executives expressed confidence its finances would improve in March. Meanwhile, CEO Bob Jordan laid out steps Southwest is taking to help prevent a repeat of a similar meltdown, including a full review of how it prepares for inclement weather.
Southwest posted a $220 million loss in the fourth quarter as a result of the holiday season fiasco. However, the company did record a $539 million net profit for all of 2022.
Next, luxury travel subscription brand Inspirato cited macroeconomic uncertainty as the reason it recently laid off 12 percent of its workforce. But as luxury travel is poised to thrive in 2023, Senior Research Analyst Pranavi Agarwal reports Inspirato’s issues run much deeper than a looming recession.
Inspirato, in addition to cutting staff, has scaled back its 2022 financial outlook while Hyatt and Marriott, among other companies, are planning to expand their luxury portfolios. One Inspirato investor expressed shock at its inability to take advantage of the surging interest in luxury hospitality, with Agarwal writing that the company is seemingly struggling to appease affluent travelers. Inspirato went public in February 2022 via a merger with a blank check company.
While Inspirato attributed the layoffs earlier this month to economic concerns, Agarwal notes the company recorded a 16 percent year-over-year increase in subscriptions during the third quarter. Inspirato executives also said during its third quarter earnings call they had seen robust levels of booking activity.
Finally, Nevada tourism authorities are launching a new program to direct business travelers from Las Vegas toward longer stays in the state’s other regions, reports Corporate Travel Editor Matthew Parsons in this week’s Future of Work briefing.
State officials believe the Nevada Division of Tourism’s 3D Program will enable it to tap into the growing number of travelers combining business and leisure trips. Parsons writes the program features six community projects that will receive consulting services for at least seven
There are problems at two of the nation’s top five airlines. Labor problems.
Southwest Airlines recently made changes to its pre-flight boarding policies by limiting the options for passengers to purchase a better spot in line for an extra fee.
United Airlines is taking a subtle dig at rival Southwest Airlines’ massive number of holiday season cancellations in an ad it’s airing during the Super Bowl on Sunday.
Two months. That’s how long Southwest Airlines expects there to be an impact on bookings from its massive holiday meltdown that disrupted millions of travelers over Christmas and New Years.
Southwest Airlines has put an initial number to the losses incurred during its holiday meltdown: a $725-825 million hit to its pre-tax income in the fourth quarter. That number includes both $400-425 million in lost revenue and added costs, for example reimbursing people for alternative travel costs.
The U.S. Transportation Department (USDOT) said late on Monday it would examine the large number of Southwest Airlines cancelled and delayed flights in recent days to determine if they were in the airline’s control, calling them “unacceptable.”
Southwest Airlines will pay a dividend to its shareholders of record as of January 10, 2023. This may not seem like a notable move for a carrier that has paid dividends for most of 50-plus year existence but it is: Southwest will be the first U.S. airline to resume shareholder returns since the pandemic.
Good morning from Skift. It’s Thursday, December 8. Here’s what you need to know about the business of travel today.
Good morning from Skift. It’s Tuesday, January 3, and here’s what you need to know about the business of travel today.
Southwest Airlines was up and running on a normal schedule on Friday after a massive winter storm crippled operations this week and exposed problems at the low-cost carrier.
Southwest Airlines capped off its 2022 with the unenviable distinction of cancelling more than 15,000 flights in total during the week of Christmas, the result of a system failure caused by several issues that were exacerbated by a nationwide winter storm.
Southwest’s Meltdown Should Be a Technology Warning for Airlines: Instead of heeding employee concerns, Southwest focused primarily on tech for customers, leading to a worst-case example of what can happen when modernizing operations is not a priority. May other airlines learn from Southwest’s mistake.