Southwest Airlines Canceled?

Written by Jennifer Clark
Posted October 13, 2021

Southwest Airlines (NYSE: LUV) has been having a rough week. On Monday, the airline canceled several hundred flights, which was a continuation of the over 1,800 Southwest flights that were canceled on Saturday and Sunday. 

According to FlightAware, a tracking service, those 1,800 Southwest flights accounted for more than 28% of its weekend schedule. In addition to cancellations, there were also flight delays of 15 minutes or more. 

People who were hoping to be home on Monday had no such luck. They instead were stuck waiting in lines trying to figure out when and how to reschedule their flights. These cancellations were detrimental to travel plans for thousands of passengers. Air travelers were furious and were left exhausted and stranded at airports. 

Southwest initially blamed these cancellations and delays on problems with the weather and air traffic control on Friday, saying that those cancellations prevented and disrupted the flight schedules for Saturday — creating a cascading problem for the airline. In a statement on Tuesday, Southwest said:

We hope to restore our full schedule as soon as possible. To every customer that experienced a cancellation or delay, Southwest offers our sincerest regret regarding disrupted travel plans. 

For some travelers, Southwest’s sincerest regret wasn’t enough. On Monday, LUV shares had fallen over the disruption and media coverage. On Monday, 435 Southwest flights were canceled, which brought the total to more than 2,200 since Friday. 

When asked in an interview about where the blame should be placed for this event, Capt. Casey Murray, the president of Southwest Airlines Pilots Association, said:

Squarely on Southwest, I point to how they manage the network and how their IT also supports that network. Once a little hiccup occurs due to the internal processes, our pilots aren’t getting to where they need to be. We’ve been sounding this alarm for about four years and have seen very little approach to correcting it. 

The media are putting out the idea that maybe what’s to blame is COVID-19 vaccine mandates that have been recently inflicted on pilots. However, Southwest CEO Gary Kelly stated in an interview with CNBC on Tuesday that he doesn’t believe that the cancellations and delays were caused by pilots calling in sick. 

Kelly did speak out about how he does not agree that businesses should force COVID vaccine mandates on employees:

I’ve never been in favor of corporations imposing that kind of a mandate. I’m not in favor of that. Never have been. But the executive order from President Biden mandates that all federal employees and then all federal contractors, which covers all major airlines, have to have a [vaccine] mandate… in place by December 8, so we’re working through that.

That would mean 56,000 of Southwest’s employees will need to be vaccinated against COVID by December 8 so that they can keep their jobs. Southwest announced this to its employees after other carriers like American Airlines, Alaska Airlines, Delta, Hawaiian Airlines, United, and JetBlue Airways. 

Delta announced that starting November 1 — before the holiday season — any unvaccinated workers would have to pay an extra $200 per month for company health insurance. If there is resistance from airline employees about the federal COVID vaccine mandate, that could have a detrimental effect on holiday travel. 

The months of November and December account for an uptick in travel — especially air travel — as people reunite with their families for the holidays. This year is expected to be bigger than last year, as most of the country has now opened and more of the population has been vaccinated. 

Last year, I had bought tickets to be with my family for Christmas, but with surging cases, no access to the vaccine, and my father having respiratory problems, I chose to delay my travel until the summer. I have plans to fly this Christmas to visit my family, but I’m a little hesitant, mainly because of the type of problems that might occur because of mandates if employees disagree with airlines.

Airlines like Southwest are going to need to take a hard look at their flight scheduling so that if there are cancellations or delays, it doesn’t mess up the entire airline. If people are stranded at airports and unable to make their way back home before or after the holidays, it isn’t going to be pretty. 

Along with most industries, the airline industry might have to evaluate its business model, because maybe it’s not working like it used to. Maybe it can’t handle the few call-outs or disruptions anymore. A lot of change has happened because of the COVID-19 pandemic and this is the time to adapt to our new reality.

Until next time, 

Jennifer Clark
Pro Trader Today
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