Southwest is America’s favorite economy airline. Analysts say that will not change despite the Christmas crisis
Travelers love Southwest Airlines, according to JD Power’s annual ranking of the top US airlines. Southwest took first place in the ranking of economy and low-cost airlines released by the consumer research firm in May last year.
Analysts say Southwest’s position with consumers remains strong despite the airline stranding hundreds of thousands of passengers over the Christmas holiday weekend. The fallout is unlikely to do long-term damage to the Southwest brand.
“People think you’re getting great value for your money,” said Michael Taylor, general manager of travel, hospitality and retail at JD Power.
In addition, Southwest’s perception of customer service remains unparalleled, Taylor said.
“The pilots are funny, the flight attendants are funny,” he said. “They really make it look like they want to fly with you.”
Southwest is processing refund requests and reimbursements after canceling more than 15,000 flights during a massive winter storm that caused staffing difficulties and overwhelmed the company’s diversion system. On Tuesday, the airline said it would be giving out 25,000 rewards points to anyone whose flight was affected.
Southwest CEO Bob Jordan, which acquired the company in February 2022, said the company is working to fix the issues that led to the widespread cancellations.
“We have plans to invest in tools, technology and processes, but immediate work is underway to understand what lessons are being learned here and how we can prevent this from ever happening again because it can’t happen again,” said Jordan told employees Friday, according to CNBC.
In a note to investors detailing the cost of the debacle, Bank of America research analyst Andrew Didora estimates Southwest could take up to $700 million in total financial damage for the quarter ended December. Didora then cut its quarterly profit outlook for the company by more than 50%.
Still, the analyst didn’t change his overall 2023 outlook for the company, which he says maintains “industry-leading” finances and a “strong competitive position.”
Some of the losses suffered by the passengers are not recoverable. Actress Tricia O’Kelley said she and her daughters missed their father’s military funeral in Tampa due to the cancellations and could only attend via Zoom. James Walter O’Kelley Jr., a retired Air Force lieutenant, said the ceremony was planned years in advance.
“He took pride in his ministry,” O’Kelley said.
JD Power’s Taylor noted that all US airlines, including Southwest, had a successful 2022 thanks to increased demand for air travel in the wake of the pandemic, and that Southwest has proven it remains a leader in the sector.
“As we see year after year, they really outperform the competition – this value for money will bring business back to normal after this whole event,” said Taylor.
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