(Bloomberg) -- Southwest Airlines Co. will update its earnings guidance prior to reporting fourth-quarter results to reflect costs associated with an operations meltdown that forced it to cancel 15,700 flights over eight days.
“We will be issuing some information before earnings,” Chief Executive Officer Bob Jordan said in an interview Thursday, without providing specifics of the changes. “Obviously it’s a significant event.”
Jordan said last week that the flight disruptions and compensation to passengers for related hotels and meals would “certainly be an impact” on the quarter, and that the airline already was assessing those costs. The Dallas-based company is scheduled to report results on Jan. 26.
See also: Southwest Seen Sticking by CEO, Business Model After Crisis
Southwest is expected to report a fourth-quarter adjusted profit of 67 cents a share, according to analyst estimates compiled by Bloomberg. The consensus estimate has declined 16% in the past four weeks, according to Bloomberg data.
The carrier is continuing its review of what led to the widespread cancellations and the work should be “completed swiftly,” Jordan said in a public update released Thursday. Southwest’s unions, some of which had criticized the airline’s crew scheduling system before the meltdown, are involved in the review, he said.
“We’ve already taken immediate actions to mitigate the risk of this ever happening again,” Jordan said.
The airline has processed three-quarters of the refund requests it has received and has reunited or has in transit 95% of bags separated from their owners, Jordan said in the interview. Reimbursements will take longer as the company evaluates claims individually, and it has hired a third party to help.
The shares were little changed after regular trading in New York. Southwest has declined 24% over the past 12 months.
(Updates with comment from Jordan message in fifth paragraph.)
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