CAL PHL FLYER

Any idea how much $$$ this will cost Southwest?

cxn

This isnt a crash. And you shouldnt smile. A child died in this accident.

Having a son myself I am not happy you make light of this situation.

oiRRio

In fairness to the OP it's a red face "smilie" which, to this reader at least, could be read as him showing embarrassment for asking about $$$ costs when a child's life had been lost.

plat

I think this is a reasonable question to ask, one that probably many people at Southwest corporate are trying to answer now. It doesn't mean that they're insensitive to the fatality or that they're not hurt by what happened.

kb1992

nope. it's not red. it's purple which could mean cheers

planeluvr

No, it means red face. Check the post icons (after you click "post reply")and place your mouse over it and it says red face.

uthornsgo

They without a doubt have insurance for this kind of thing, so I would guess the main concern, from a financial perspective, is how much their rates are going to go up at their next renewal and what their deductibles are. As for worrying about losing business because of this, I would think that's a non-issue. I don't see people not flying WN because of this. The only immediate concern they'll have is getting back on schedule and losing a little sleep while they institute a PR campaign they've no doubt practiced many times.

LarryJ

Don't most large airlines self insure?

formeraa

No, not entirely. Most aircraft are insured. Some losses will be insured. But, honestly, it's a complex situation and, undoubtedly, will be tied up in courts for years. That's why I'm sure that WN has good lawyers on retainer.

FWAAA

Probably depends on the type of risk and the extent of the exposure. I assume most airlines carry liability coverage to cover crash losses that could possibly run into the hundreds of millions of dollars (large aircraft, complete loss, many fatalities).

In AA's securities filings, it has disclosed that the liability resulting from the Flight 587 disaster (November, 2001) is expected to be covered by various insurance policies.

AA insured the DC-10 lost in the tragedy of Flight 191 (May, 1979) for replacement cost and promptly received a check for $50 million from the insurer.

With even new 737s costing tens of millions of dollars, I would hope that airlines would carry insurance covering their possible loss. Since hull losses are very infrequent, I assume such coverage is not all that costly.

rc408

Colors have different meaning in different places. Go to Compton and purple means you're gang neutral. I honestly do not think anyone was saying "cheers!" to this accident.

ExtraInRedShirt

1) Aircraft repairs - probably insured, probably not a big deal
2) Lawsuits - people on the ground, in the plane, and especially the family of the poor boy will very likely pursue this. These costs will probably be very high, but will again be covered by insurance of some sort for the most part
3) Lost business - They have 1 plane out of service for some time, even if it will be repaired for free. They'll also lose some amount of business (very likely a tiny slice) from people shying away after this
4) PR - This is the big one (IMHO). Southwest has built up an excellent reputation for safety, but some people will question it after this. Also, this may have some impact on peoples emotions (esp regarding Love Field) - "I don't want an airport close to me" will become a stronger force.
5) PR relief for others - All of a sudden the AA / Air Marshall shooting is off the front page of every web site I checked. The Delta strike talk can't breach the front page either. The negative aspects of those things suddenly shrink in comparison - so AA/Delta get off a bit easier than they would have.

All IMHO.

rbessler

I wouldn't be so quick to make that statement. I live outside of Chicago, and while I trust Southwest airlines as much as I trust any other airline, after this, I'm going to be sticking with flights into Chicago O'Hare during the winter. It seems hard to argue with the fact that flying into Midway during terrible weather conditions is riskier than flying into O'Hare during terrible weather conditions. And, unfortuantely, avoiding Midway during the winter also means avoding Southwest for my Chicago flights.

It may be slightly irrational -- I mean, I recognize that safety is a top concern for everyone, and that Midway would never intentionally put anyone at risk... but this kind of thing is simply more likely to happen at MDW than ORD.

mt.sthelens

The stock was down a fraction as I just checked.

rc408

Short it, buy to cover and then go long!