Airline stocks traded narrowly higher Thursday, while Southwest Airlines continued to lag far behind the rest of the industry in recovering from last weekend's weather disruptions.
Southwest showed 2,356 flights canceled as of 7 a.m. Thursday, according to air industry tracker Flight Aware. The nearest number of cancellations among other U.S.-based airlines were Frontier Group Holdings, with 15 grounded flights, and American Airlines Group, with 12 canceled flights.
Denver International, Chicago's Midway International and Love Field in Dallas showed the highest number of early cancellations in the U.S. on Thursday. FlightAware reported 160 flights canceled into Denver, 112 cancellations for Midway and 100 for Dallas.
Southwest's cancellations represented more than 58% of the airlines scheduled flights Thursday, according to the New York Times.
The airline industry was just a fragment of the U.S. economy upended by freezing, temperatures, high winds and snowfall from a massive winter storm that blanketed more than half of the U.S., left more than 60 and dumped four feet of snow on Buffalo New York during the Christmas holiday weekend.
The storm forced much of the U.S. airline network to shutdown. But while most carriers recovered normal operations within days, Southwest has been unable to get its crew and aircraft schedules in sync, leaving an uncertain number of travelers still stranded.
Flaws In Southwest Route Model
Southwest Airlines routes its flights using a point-to-point model, rather than the hub-and-spoke approach used by the major carriers. Under normal circumstances, the Southwest model provides more direct, nonstop flights between non-hub U.S. cities.
During disruptions, a hub-and spoke model concentrates its idled flight crews and aircraft at hub airports. Southwest's model instead left its jets and staff scattered. The company has thus far been unable to bring its operations back under control.
A video statement late Wednesday from Southwest Chief Commercial Officer Ryan Green offered additional help in locating and recovering lost baggage, full refunds for any disrupted flight and told customers that "if you have any travel expenses due to the disruption, you can submit those receipts directly" on the company website.
A tweet from the U.S. Department of Transportation on Monday said, "USDOT is concerned by Southwest's unacceptable rate of cancellations and delays & reports of lack of prompt customer service. The Department will examine whether cancellations were controllable and if Southwest is complying with its customer service plan."
Transportation Secretary Pete Buttigieg, in a Good Morning America interview on Wednesday, said, ""We are past the point where they could say that this is a weather-driven issue."
Buttigieg said the scale of Southwest's problems indicated a "system failure," and that the company needed to get stranded passengers to their destinations and provide adequate compensation.
Airline Stocks, Transports Track Lower In December
Southwest stock lost more than 10% this week through Wednesday, and more than 19% since the start of December. Frontier has tumbled 24% for December.
LUV stock edged higher before Thursday's open, with ULCC up slightly.
Meanwhile, other airline stocks have taken lesser hits. Delta Air Lines has dropped not quite 10% in December. American Airlines Group is off nearly 15% for December and tracking toward a fifth straight weekly decline. United Airlines Holdings, also sitting on a five-week slip, has lost nearly 16% this month.
Alaska Air Group has posted a 13% drop in December.
Hits have been more mild to freight and delivery names. FedEx slipped not quite 2% this week and is showing a December decline of 5%. UPS is also down less than 2% for the week, and down more than 8% since the start of December.
Rail and trucking stocks took modest hits for the week. The Dow Jones Transportation Index was down less than 2% for the week, with a loss of 9.2% so far in December. The transportation benchmark is down more than 19% for 2022.
