Dec 27 (Reuters) – Southwest Airlines Co (LUV.N) led U.S. airline cancellations on Tuesday as the low-cost carrier struggled to recover from a harsh winter that destroyed the vacation plans of many.
Shares of the Dallas-based airline were down 5.3% at $34.19 in morning trading after canceling 2,523 flights for Tuesday at 9:42 a.m. ET. It was 30 times higher than Spirit Airlines (SAVE.N)the carrier with the second highest number of cancellations.
Southwest also cut 2,474 flights for Wednesday, compared to just seven for Frontier Airlines and five for Delta, according to tracking website FlightAware.
An arctic outburst and massive winter storm nicknamed Elliott swept through much of the United States ahead of the Christmas holiday weekend, forcing Southwest to cut more than 12,000 flights since Friday.
Southwest derives most of its profits from domestic flights and unlike other major US carriers, it relies more on point-to-point service instead of operating from major hubs. This leaves its staff vulnerable to being stranded in the event of disruptions.
“We expect Southwest to report the impact (of the storm) because it was worse than the industry and likely hurt earnings more than a ‘normal’ storm,” the Cowen analyst said, Helane Becker, in a footnote.
“Other airlines have probably had manageable cancellations and delays, and actually seem to have recovered (in time to get everyone home).”
Southwest said on Monday it had decided to continue operating a reduced schedule by flying about a third of its scheduled flights “for the next few days.” He declined to comment further on Tuesday.
His problems have drawn scrutiny from the US Department of Transportation, which said it would review the widespread disruptions to determine if they were within the airline’s control, calling them “unacceptable”.
In total, US airlines have canceled more than 5,000 flights for Tuesday and Wednesday, Tuesday morning.
Reporting by Kannaki Deka and Abhijith Ganapavaram and additional reporting by Aishwarya Nair in Bengaluru; Editing by Devika Syamnath
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