The brutal winter storm that crippled much of the United States and beyond on Christmas has departed. With it go at least some of Southwest’s (NYSE:LUV) air travel troubles. Reports suggest that the airline is back to normal operations in many places. That wasn’t enough to prevent a slight downtick in its Friday afternoon trading, however.
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It took nearly a full week after the storm started to get things back to normal at Southwest. The storm was definitely a major part of it. However, looking back on the experience, there was more to blame than just a whole lot of snow. Issues of staffing reared their ugly head as Southwest saw an unusually large number of call-outs due to illness. Not too much of a surprise going into flu season, but other causes emerged as well, including issues with scheduling and staffing technology systems.
Give Southwest credit; it’s already started to win back customer loyalty. Southwest will issue refunds on canceled flights and previously vowed to reimburse travelers for hotel stays, meals, and alternate transportation sought. Bob Jordan, Southwest’s CEO, took to “Good Morning America” to apologize profusely and assure potential travelers that Southwest was still worth using. Potential solutions started to emerge as well, including greater investment in employees and operations connected to them.
Regardless of the disaster and any potential solutions, analysts are still overwhelmingly in favor of Southwest. Analyst consensus calls it a Strong Buy, with an average price target of $46.75, giving it 40.22% upside potential.
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