Southwest is America’s favorite budget airline. Analysts say that won’t change despite the holiday collapse

Travelers love Southwest Airlines, according to JD Power’s annual ranking of the top US airlines. south west finished first in the budget and budget airline rankings published by the consumer research firm in May of last year.

Analysts say Southwest’s position with consumers remains strong despite the airline stranding hundreds of thousands of passengers over the Christmas holiday weekend. The fallout, they say, is unlikely to do long-term damage to Southwest’s brand.

“People think they’re getting great value for money,” said Michael Taylor, general manager of travel, hospitality and retail at JD Power.

Additionally, Southwest’s perception of customer service remains unmatched, Taylor said.

“The pilots are fun, the flight attendants are fun,” he said. “They really make it look like they want to fly with you.”

Southwest is processing refund requests and refunds after it canceled more than 15,000 flights during a massive winter storm that caused staffing problems and overwhelmed the company’s rerouting system. On Tuesday, the airline said it would issue 25,000 reward points to anyone whose flight was affected.

Southwest CEO Bob Jordan, who took over the company in February 2022, said the company is working to rectify the issues that led to the widespread cancellations.

“We have plans to invest in tools, technology and processes, but there will be immediate work to understand what lessons are being learned here and how we prevent this from happening again, because it can’t happen again,” Jordan told staff on Friday according to CNBC. .

In a note to investors tabulating the cost of the debacle, Bank of America research analyst Andrew Didora estimated that Southwest could take a financial hit of up to $700 million in the quarter ending in December. As a result, Didora lowered its quarterly earnings outlook for the company by more than 50%.

However, the analyst did not change his overall 2023 outlook for the company, which he said maintains “industry-leading” financials and a “strong competitive position.”

Some of the losses suffered by passengers are beyond compensation. Actress Tricia O’Kelley said she and her daughters missed her father’s military funeral in Tampa due to cancellations and were only able to attend via Zoom. James Walter O’Kelley Jr., a retired Air Force lieutenant, said the ceremony was planned years in advance.

“I was proud to serve,” O’Kelley said.

JD Power’s Taylor noted that all US airlines, including Southwest, had a successful year in 2022 thanks to increased demand for air travel post-pandemic, and that Southwest has shown that it remains an industry leader.

“As we see year after year, they really dwarf the competition – that value for money is going to get business back to normal levels after this whole event,” Taylor said.