Southwest Lost $220 Million Because of Holiday Meltdown

Southwest Airlines lost $220 million in the final three months of last year because of a holiday meltdown that affected an estimated two million passengers, the company reported Thursday.

Southwest executives said they also expect to report a loss in the first three months of this year, as customer cancellations rise and sales slow in January and February. The airline said fallout from the holiday turmoil would contribute to an estimated dent to revenue in the first quarter of this year of up to $350 million.

“With regard to the operational disruptions, I am deeply sorry for the impact to our employees and customers,” the airline’s chief executive, Bob Jordan, said in a statement. He reiterated his confidence in the airline’s long-term financial goals and pledged “to regain our 51-year reputation for operational excellence.”

The airline reported record fourth-quarter revenue of $6.2 billion, contributing to an annual profit of $539 million for the full year. And despite its expectation for a loss in the current quarter, Southwest said it expected revenue to rise between 20 and 24 percent for the period. The airline’s share price fell in premarket trading.

The release of the company’s quarterly financial results on Thursday came a day after the Department of Transportation said it had started a “rigorous and comprehensive” investigation into Southwest’s holiday breakdown. The agency said it was looking into whether the company’s executives had scheduled flights that the airline could not realistically fulfill, a violation of federal law banning unfair and deceptive practices. It also said that Southwest must provide timely refunds and reimbursements to travelers affected by the meltdown, which it has said it plans to do.