Delta Air Lines outage earlier this week is going to cost the company a pretty penny if the most recent update from its much smaller brethren, Southwest Airlines, is anything to go by.
The Dallas-based company will be hit by roughly $54 million to $82 million in lost revenues and additional costs, it revealed in a press release Wednesday, as first reported by the Dallas Morning News.
In July, Southwest Airlines grounded over 2,000 flights due to a technical glitch. The resulting cancellations, refunds, meals, hotel bookings and additional staffing will appear as a 0.5 point decrease in the company’s third quarter operating revenue per available seat mile—a key metric of profitability.
Undoubtedly, Delta’s own woes recently will cost the airline millions as well.
It has cancelled over 2,100 flights over the past several days, after a power outage shut down the company’s computer system. That led to refunds, overtime staff, and other amenities to pacify frustrated consumers. Delta has also offered its customers traveling on Monday, who faced delays upwards of three hours, a $200 travel voucher. Tens of thousands of passengers were delayed or cancelled that day.
Those costs could lead to a 5 to 10% decrease in earnings per share in the third quarter, said Daniel McKenzie, an analyst with Buckingham Research Group in a research note, Reuters reported.
Delta Air Lines has also sought to emphasize that the massive delays are an isolated incident, not a systemic problem that could hamper the company’s growth.
