Southwest cancels thousands of U.S. flights because the weather is still bitter

(Reuters) – Southwest Airlines Co led cancellations of U.S. airlines on Tuesday. This was due to the difficulty of low-cost carriers recovering from severe winter weather that has ruined many holiday plans.

The Dallas-based airline’s shares fell 3.4% to $34.90 before the bell after it cancelled 2,503 flights on Tuesday at 5.50 AM ET and 2,474 on Wednesday according to FlightAware.

In the days leading up to Christmas, an arctic blast and a huge winter storm called Elliott swept across the United States. Southwest had to cancel more than 12,000 flights. Others airlines called off flights but on a smaller scale.

Southwest makes most of its profit domestically. It relies on point-to–point service, rather than operating out of large hubs like other major U.S. carriers. This leaves Southwest’s staff at risk of being stranded due to disruptions.

Helane Becker, Cowen analyst at Cowen, said that Southwest would likely report on the impact of the storm as it was more severe than the industry and likely caused more damage to earnings than a ‘normal storm.

“The other airlines had likely manageable cancellations or delays and appear to have recovered (in enough time to get everyone home).

Southwest stated Monday that it will continue flying a reduced schedule and fly roughly one-third of its schedule for the “next few days.”

The U.S. Transportation Department has been looking into its problems and declared late Monday that it would review the large number delay and canceled flights from recent days to determine whether they were under the airline’s control.

As of Tuesday morning, more than 5,000 U.S. flights had been cancelled for Tuesday and Wednesday.

(Reporting done by Kannaki Deka, Abhijith Ganapavaram at Bengaluru; Editing done by Devika Siamnath).