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World

Chinese rush to renew passports as COVID border curbs lifted

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  • China dropped quarantine for visitors on Sunday
  • Latest move in easing that has let virus run free
  • Several nations demand COVID tests from China travellers
  • Chinese stocks, yuan rally on growth hopes

BEIJING, Jan 9 (Reuters) – People joined long queues outside immigration offices in Beijing on Monday, eager to renew their passports after China dropped COVID border controls that had largely prevented its 1.4 billion residents from travelling for three years.

Sunday’s reopening is one of the last steps in China’s dismantling of its “zero-COVID” regime, which began last month after historic protests against curbs that kept the virus at bay but caused widespread frustration among its people.

Waiting to renew his passport in a line of more than 100 people in China’s capital, 67-year-old retiree Yang Jianguo told Reuters he was planning to travel to the United States to see his daughter for the first time in three years.

“She got married last year but had to postpone the wedding ceremony because we couldn’t go over to attend it. We’re very glad we can now go,” Yang said, standing alongside his wife.

China’s currency and stock markets strengthened on Monday, as investors bet the reopening could help reinvigorate a $17 trillion economy suffering its lowest growth in nearly half a century.

Beijing’s move to drop quarantine requirements for visitors is expected to boost outbound travel, as residents will not face those restrictions when they return.

But flights are scarce and several nations are demanding negative tests from visitors from China, seeking to contain an outbreak that is overwhelming many of China’s hospitals and crematoriums. China, too, requires pre-departure negative COVID tests from travellers.

China’s top health officials and state media have repeatedly said COVID infections are peaking across the country and they are playing down the threat now posed by the disease.

“Life is moving forward again!,” the official newspaper of the Communist Party, the People’s Daily, wrote in an editorial praising the government’s virus policies late on Sunday which it said had moved from “preventing infection” to “preventing severe disease”.

“Today, the virus is weak, we are stronger.”

Officially, China has reported just 5,272 COVID-related deaths as of Jan. 8, one of the lowest rates of death from the infection in the world.

But the World Health Organization has said China is under-reporting the scale of the outbreak and international virus experts estimate more than one million people in the country could die from the disease this year.

Shrugging off those gloomy forecasts, Asian shares climbed to a five-month high on Monday while China’s yuan firmed to its strongest level against the dollar since mid-August.

China’s blue-chip index (.CSI300) gained 0.7%, while the Shanghai Composite Index (.SSEC) rose 0.5% and Hong Kong’s Hang Seng Index (.HSI) climbed 1.6%.

“The ending of the zero-COVID policy is … going to have a major positive impact on domestic spending,” Ralph Hamers, group chief executive officer at UBS, told the Swiss bank’s annual Greater China conference on Monday.

“We believe there is a lot of opportunity for those committed to investing in China.”

‘HUGE RELIEF’

“It’s a huge relief just to be able to go back to normal … just come back to China, get off the plane, get myself a taxi and just go home,” Michael Harrold, 61, a copy editor in Beijing told Reuters at Beijing Capital International Airport on Sunday after he arrived on a flight from Warsaw.

Harrold said he had been anticipating having to quarantine and do several rounds of testing on his return when he left for Europe for a Christmas break in early December.

State broadcaster CCTV reported on Sunday that direct flights from South Korea to China were close to sold out. The report quickly shot to the most-read item on Chinese social media site Weibo.

In the near term, a spike in demand from travellers will be hampered by the limited number of flights to and from China, which are currently at a small fraction of pre-COVID levels.

Flight Master data showed that on Sunday, China had a total of 245 international inbound and outbound flights, compared with 2,546 flights on the same day in 2019 – a fall of 91%.

Korean Air said earlier this month that it was halting a plan to increase flights to China due to Seoul’s cautious stance towards Chinese travellers. South Korea like many other countries now requires travellers from China, Macau and Hong Kong to provide negative COVID test results before departure.

Taiwan, which started testing arrivals from China on Jan. 1, said on Monday that nearly 20% of those tested so far were positive for COVID.

China’s domestic tourism revenue in 2023 is expected to recover to 70-75% of pre-COVID levels, but the number of inbound and outbound trips is forecast to recover to only 30-40% of pre-COVID levels this year, China News reported on Sunday.

Reporting by Yew Lun Tian, Liz Lee, Josh Arslan, Eduardo Baptista and Sophie Yu in Beijing; Ben Blanchard in Taipei; Writing by John Geddie; Editing by Raju Gopalakrishnan

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Business

Historic UK satellite launch may spur military appetite

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Jan 8 (Reuters) – A mobile air-launched rocket system to be used in Britain’s first domestic satellite launch could sow the seeds for a globally dispersed rapid-response capability to put extra eyes in space in times of war, executives and analysts said.

Virgin Orbit (VORB.O), part-owned by billionaire Richard Branson, plans to launch nine satellites from a LauncherOne rocket attached under the wing of a modified Boeing 747, to be flown from a new spaceport in Cornwall on Monday.

Barring delays, it will be the first time a satellite has departed from western European soil.

For now the focus is on commercial payloads from companies such as Space Forge, which is developing in-orbit manufacturing.

But the launch is also seen by many as a blueprint for quicker launches of limited satellite capacity for tactical military purposes, in what planners call “Responsive Launch”.

“Ukraine woke up the world in a lot of ways,” Virgin Orbit Chief Executive Dan Hart told a news conference in southwest England on Sunday.

“Clearly there is a hope of a pan-European, as well as a U.S. collaboration … and that we have responsiveness so that if something happens in the world, we can get assets there right away,” he told the pre-launch briefing, monitored online.

Virgin Orbit said last year Britain’s Royal Air Force was doing exercises to demonstrate the value of “Responsive Launch”.

Britain had a brief foray into space launch activities in the late 1960s and early 1970s, when its Black Arrow rocket was cancelled after just one successful mission.

The rocket’s four launches took place in Australia in an era when commercial satellites barely existed.

Now, constellations of miniaturised satellites are heading an explosion of commercial activity in low Earth orbit.

‘FLEXIBLE AND AGILE’

Lobbing small satellites into low orbit at short notice would do little more than fill temporary gaps in coverage from large spy satellites, but experts say the technology has some dual civil and military potential and could spread costs.

“It gives you greater resilience or redundancy or duality of systems, whether that’s for position, navigation and timing or quicker access … as we’ve seen in Ukraine,” Ian Annett, deputy chief executive of the UK Space Agency, told Sunday’s briefing.

“It’s a natural transition that helps us develop security capabilities, but also, for government, keeps costs down whilst providing commercial opportunities as well.”

Elon Musk’s SpaceX activated its Starlink constellation over Ukraine after Russia’s invasion last February. Its communication links have been used by civilians and by Ukraine’s military.

Luxembourg said in October it had signed a letter of intent with Virgin Orbit to develop a “rapid and flexible response to different threats”, for NATO and other allies.

Its defence ministry has called for “new, more flexible and agile satellite launch procedures and techniques from Europe”.

Britain’s own 2022-25 space roadmap calls for dual-use capabilities in Earth Observation and Space Domain Awareness.

Virgin Orbit is also talking to Japan and Australia.

Questions remain, however, over how quickly the mobile launch concept could work its way into actual budgets, which are dwarfed by U.S. spending on space.

“Everyone is playing up military space as the next big thing,” said UK-based defence analyst Francis Tusa. “But ministries of defence have eyes larger than their stomachs.”

The system’s liquid propellant and final rocket assembly also require some local infrastructure, and Europe’s crowded airspace has thrown up significant regulatory obstacles.

“At the moment, it’s a bit bigger on the commercial side, but we see the defence and national security side growing so I think in this steady state, it’ll probably end up being 50/50,” Hart told Reuters.

Reporting by Tim Hepher; Additional reporting by Joey Roulette; Editing by David Holmes

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World

One dead, 57 injured in accident on Mexico City metro

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MEXICO CITY, Jan 7 (Reuters) – At least one person was killed and 57 were injured in a train collision on Mexico City’s metro early on Saturday, local authorities said.

The person killed in the morning accident was a young woman, city security head Omar Garcia told local media Grupo Milenio.

Garcia shared an updated list of the injured later on Saturday, and the city’s mayor, Claudia Sheinbaum, said on Twitter that she was at the site.

Four others who were trapped on one wagon on Line 3 were rescued and are in good health, Garcia said earlier.

A variety of accidents have taken place on the metro in recent years. The most serious was the May 2021 collapse of a rail overpass on Line 12 that killed 26 people and injured more than 60.

Maintenance shortcomings were identified as one of that accident’s causes.

Reporting by Lizbeth Diaz in Mexico City;
Writing by Julia Symmes Cobb;
Editing by Leslie Adler

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US

At least 29 killed in Mexico capture of Chapo’s son

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MEXICO CITY, Jan 6 (Reuters) – Nineteen suspected gang members and 10 military personnel were killed in a wave of violence surrounding the arrest of Mexican drug cartel boss Ovidio Guzman in the northern state of Sinaloa, Defense Minister Luis Cresencio Sandoval said on Friday.

Mexican security forces captured Guzman, the 32-year-old son of jailed kingpin Joaquin “El Chapo” Guzman, in the early hours of Thursday morning, prompting hours of unrest and shootouts with gang members, the minister said.

Guzman was extracted by helicopter from the house where he was caught and flown to Mexico City, before being taken to a maximum security federal prison, Sandoval added.

The arrest spurred the powerful Sinaloa Cartel – once headed by El Chapo himself – to go on a rampage, setting vehicles on fire, blocking roads, and fighting security forces in and around Culiacan, the capital of Sinaloa.

Twenty-one other people were arrested during Thursday’s operations, Sandoval told a news conference, adding there were no reports of any civilian deaths.

President Andres Manuel Lopez Obrador said there were no immediate plans to extradite Ovidio to the United States, where his father is in a maximum security prison after being extradited in 2017 and found guilty in a New York court.

“The elements (of the case) have to be presented and the judges in Mexico decide,” the president said. “It is a process…It is not just the request.” No U.S forces had assisted in Ovidio’s capture, Lopez Obrador said.

An enhanced security presence will now remain in place in Sinaloa, on Mexico’s Pacific coast, to protect the public, with an additional 1,000 military personnel traveling to the region today, Sandoval said.

Passengers on an Aeromexico passenger flight at Culiacan airport crouched low below their seats as shots rung out around the runway on Thursday.

“As we were accelerating for take-off, we heard gunshots very close to the plane, and that’s when we all threw ourselves to the floor,” passenger David Tellez said. Aeromexico said one of its plane was hit by gunfire at Culiacan but that no-one was hurt.

The airport was due to reopen later on Friday after being closed due to the violence.

In 2019, a failed operation to arrest Ovidio ended in humiliation for Lopez Obrador’s government. At the time, security forces briefly detained Ovidio, triggering a violent backlash from cartel loyalists and leading authorities to quickly release him to stave off the threat of further retribution from his henchmen.

His latest capture comes before a North American leaders’ summit in Mexico City next week, which U.S. President Joe Biden will attend. Cooperation over security is due to be on the agenda.

THE EXTRADITION QUESTION

The United States has sought Guzman’s extradition for years.

In 2021, the State Department announced a $5 million reward for information leading to his arrest and conviction.

Guzman, known by the nickname “The Mouse,” has been charged in the United States with conspiracy to traffic cocaine, methamphetamine and marijuana into the United States. The State Department said he oversaw methamphetamine labs in Sinaloa responsible for producing “3,000 to 5,000 pounds” of the drug per month.

The State Department also said information indicated he had ordered multiple murders, including that of a popular Mexican singer who had refused to perform at his wedding.

Surging flows of the synthetic opioid fentanyl into the United States, where it has fueled record overdose deaths, have heightened pressure to capture Guzman.

The U.S. Drug Enforcement Administration considers the Sinaloa Cartel, along with one other gang, to be responsible for most of the fentanyl inside the United Sates.

Additional reporting by Dave Graham
Editing by Alistair Bell

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World

Air India grounds crew over handling of unruly passenger on flight

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NEW DELHI, Jan 7 (Reuters) – Air India has issued show cause notice and de-rostered one pilot and four cabin crew as it investigates the handling of an unruly passenger on a flight from New York to Delhi in November, the airline’s chief executive office said on Saturday.

The Tata group-owned airline has faced criticism from India’s aviation regulator following an incident on a Nov. 26 flight in which a male passenger, while apparently inebriated, urinated on a female co-passenger.

A second similar incident occurred last month on a flight from Paris to Delhi.

“Air India acknowledges that it could have handled these matters better, both in the air and on the ground and is committed to taking action,” the airline’s CEO and managing director Campbell Wilson said in a statement on Saturday.

Wilson said Air India has initiated multiple measures to improve its response to such incidents, including a review of airline policies and reporting processes.

A male passenger accused of misbehaviour on the New York to Delhi flight has been terminated by his employer Wells Fargo (WFC.N), the bank said on Friday, adding that it was cooperating with local law enforcement.

Local media said on Saturday that the passenger had been arrested by Indian police.

Air India will provide full cooperation to the affected passenger, regulators and law enforcement authorities, Wilson said.

“We are committed to providing a safe environment for customers and crew, as well as operating in full compliance with all laws and regulations,” he said.

Reporting by Aditi Shah, Writing by Devjyot Ghoshal; Editing by Jacqueline Wong

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World

‘We threw ourselves to the floor’: Mexican passenger plane caught in cartel crossfire

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MEXICO CITY, Jan 5 (Reuters) – “That’s an attack plane, Dad,” said one of David Tellez’s young children as they spotted Mexican military aircraft touching down alongside their Aeromexico passenger plane early on Thursday.

Then the gunfire began.

“As we were accelerating for take-off, we heard gunshots very close to the plane, and that’s when we all threw ourselves to the floor,” Tellez said after the incident in the northern city of Culiacan.

Violence broke out on Thursday throughout Culiacan after the arrest of Ovidio Guzman, the son of the notorious drug lord known as El Chapo, and a senior member of the Sinaloa cartel.

Aeromexico said nobody on Tellez’s flight had been hurt. The Culiacan airport closed shortly after, as security forces patrolled the city, which was strewn with burned vehicles, attempting to contain the violent backlash.

Tellez, 42, was traveling with his wife and children, aged 7, 4 and 1, after spending Christmas with family.

He told Reuters he had reached the airport for his 8:24 a.m. flight without incident, despite encountering road blockades set up after overnight shootouts. Although Guzman’s arrest had not yet been confirmed, nervous security guards urged travelers to enter quickly.

“Authorities were not saying anything,” he said by phone.

Tellez hid in an airport bathroom with his family after hearing that gang members were in the airport. The rumor turned out to be false, and the Aeromexico travelers boarded quickly.

Yet, just as flight AM165 to Mexico City was about to take off, a succession of military planes landed on the airstrip.

Tellez took out his cellphone, recording several videos that show two large air force transport aircraft, smaller, fighter-like attack aircraft and military trucks on the tarmac. Then gunshots began to echo in the distance.

A video circulating on social media, appearing to capture the same incident, showed passengers crouching low below their seats as a child cried.

A flight attendant said the engine had been hit, triggering a leak. The crew directed passengers to disembark, moving them to a windowless waiting room in the airport.

It is not clear who was shooting at whom.

Tellez’s family plans to board another flight on Friday, but until then, is staying put.

“We prefer to stay at the airport until it’s safe to leave,” he said. “The city is worse. There is a lot of shooting and confusion.”

Reporting by Sarah Morland and Carolina Ruiz in Mexico City; Editing by Bradley Perrett

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World

Power outage forces Philippines to suspend flights, shut airspace

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  • More than 280 flights delayed, diverted on New Year’s Day
  • Transportation chief blames power outage for failure
  • System partially restored, airlines offer free rebooking

MANILA, Jan 1 (Reuters) – Philippine authorities halted flights in and out of Manila on New Year’s Day due to a malfunction of air traffic control, which also prevented airlines bound to other destinations from using the country’s airspace.

A total of 282 flights were either delayed, cancelled or diverted to other regional airports, affecting around 56,000 passengers at Manila’s Ninoy Aquino International Airport (NAIA), the airport operator said on Sunday.

It was unclear how many overflights were affected.

Transportation Secretary Jaime Bautista apologized for the inconvenience to passengers as he blamed a power outage for the breakdown of the central air traffic control system that also affected operations at other airports in the country.

He said the outdated existing facility should be upgraded immediately and that a back-up system was also needed.

“This is air traffic management system issue,” he said in a media briefing. “If you will compare us with Singapore, for one, there is a big difference, they are at least 10 years ahead of us.”

As of 0800 GMT, “the system has been partially restored thereby allowing limited flight operations”, the Manila International Airport Authority said in a statement. By late evening, eight flight arrivals and eight departures had been allowed, according to the airport operator.

Video clips and photos posted on social media showed long queues at the airport and airline personnel distributing food packs and drinks to stranded passengers.

“We’re told radar and navigation facilities at NAIA down. I was on my way home fm Tokyo – 3 hours into the flight, but had to return to Haneda,” tweeted one passenger – Manuel Pangilinan, chairman of Philippine telecommunications conglomerate PLDT Inc.

“6 hours of useless flying but inconvenience to travellers and losses to tourism and business are horrendous. Only in the PH. Sigh.”

Budget carrier Cebu Pacific (CEB.PS) and Philippine Airlines (PAL.PS) said they were offering passengers due to fly on Sunday free rebooking or the option to convert tickets to vouchers.

Reporting by Enrico Dela Cruz; Editing by Neil Fullick, Peter Graff and Alison Williams

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World

Hong Kong asks Japan to drop airport bans, 60,000 travellers affected

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HONG KONG, Dec 29 (Reuters) – Hong Kong has asked Japan to withdraw a COVID-19 restriction that allows passenger flights from the financial hub to land only at four designated airports, saying the decision would affect about 60,000 passengers.

India, Italy, Taiwan and the United States require mandatory COVID-19 tests on travellers from China after Beijing’s decision last month to lift stringent zero-COVID policies that fuelled a surge in infections across mainland China.

Hong Kong, home to more than 7 million people, is recording around 20,000 coronavirus cases a day but lifted its COVID curbs on Thursday for the first time in three years.

Japan, a top travel destination for those in Hong Kong, said it would limit flights from Hong Kong, Macau and mainland China to Tokyo’s two airports, as well as Osaka and Nagoya, from Friday.

The decision comes during a peak travel season ahead of the Lunar New Year holiday which begins on Jan. 21.

“It is understood that around 250 outbound flights of Hong Kong airlines will be affected between December 30, 2022 and the end of January 2023, affecting around 60,000 passengers,” the government said in a statement late on Wednesday.

City leader John Lee said the government had indicated to Japan that it was disappointed.

“We think that Hong Kong people should be allowed to use not just these four airports,” Lee said.

On Thursday, Hong Kong’s government said Japan would let passenger flights from Hong Kong also land in Hokkaido, Fukuoka and Okinawa provided that no passengers aboard had been in mainland China for the prior seven days, but said the condition was “unreasonable”.

Flights of Hong Kong airlines can still carry passengers back to Hong Kong from airports in Japan, the government said, to ensure their smooth return and “minimise the impact to Hong Kong travellers caused by the incident.”

In a statement, Hong Kong’s flagship carrier Cathay Pacific Airways (0293.HK) said it would continue to operate flights to Japan, although it would reduce these to 65 a week, down 20% from its planned schedule for Jan 2023.

HK Express, which is owned by Cathay, said in a separate statement it would only be able to operate 60 scheduled flights a week to destinations in Japan due to the curbs, prompting the cancellation of 41 flights from Hong Kong to Japan in January.

Hong Kong Airlines and Peach Aviation said they would cancel some flight routes because of the rules.

In December, China began dismantling the world’s strictest COVID regime of lockdowns and extensive testing, putting its battered economy on course for a complete re-opening next year.

The lifting of curbs following widespread protests has meant that COVID is spreading largely unchecked, probably infecting millions of people each day, some international health experts have said.

Reporting by Farah Master and Twinnie Siu; Editing by Lincoln Feast and Stephen Coates

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World

U.S. stocks drop on recession fears, Nasdaq closes at new bear market low

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  • Tesla gains 3.3% in choppy trade
  • Southwest Airlines slips 5.2% on government scrutiny
  • Indexes down: Dow 1.1%, S&P 500 1.20%, Nasdaq 1.35%

Dec 28 (Reuters) – Wall Street’s main indexes ended weaker on Wednesday, with the Nasdaq hitting a 2022 closing low, as investors grappled with mixed economic data, rising COVID cases in China, and geopolitical tensions heading into 2023.

The Nasdaq Composite (.IXIC) ended at 10,213.288, the lowest since the bear market began in November 2021 after the index hit a record high. The last time the Nasdaq ended lower was in July 2020. Its previous closing low for 2022 was 10,321.388 on Oct. 14.

“There was no Santa rally this year. The Grinch showed up this December for investors,” said Greg Bassuk, chief executive at AXS Investments in Port Chester, New York.

December is typically a strong month for equities, with a rally in the week after Christmas. The S&P 500 index (.SPX) has posted only 18 Decembers with losses since 1950, Truist Advisory Services data show.

“Normally a Santa Claus Rally is sparked by hopes of factors that will drive economic and market growth,” Bassuk said. “The negative and mixed economic data, greater concerns around COVID reemergence and ongoing geopolitical tensions and … all of that also translating Fed policy is all impeding Santa (from) showing up at the end of this year.”

All 11 of the S&P 500 (.SPX) sector indexes fell on Wednesday. Energy stocks (.SPNY) were the biggest losers, dipping over 2.2% as worries over demand in China weighed on oil prices.

Investors have been assessing China’s move to reopen its COVID-battered economy as infections surged.

“With this current combination of rising cases with an opening up of China restrictions, we’re seeing that investors are concerned that the ramifications are going to spread through many different industries and sectors as it did in the earlier COVID period,” Bassuk said.

The benchmark S&P 500 (.SPX) is down 20% year-to-date, on track for its biggest annual loss since the financial crisis of 2008. The rout has been more severe for the tech-heavy Nasdaq Composite (.IXIC), which closed at the lowest level since July 2020.

Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., December 7, 2022. REUTERS/Brendan McDermid

While recent data pointing to an easing in inflationary pressures has bolstered hopes of smaller interest rate hikes by the Federal Reserve, a tight labor market and resilient American economy have spurred worries that rates could stay higher for longer.

Markets are now pricing in 69% odds of a 25-basis point rate hike at the U.S. central bank’s February meeting and see rates peaking at 4.94% in the first half of next year. .

Shares of Tesla Inc (TSLA.O) gained 3.3% in choppy trade, a day after hitting the lowest level in more than two years. The stock is down nearly 69% for the year.

Southwest Airlines Co (LUV.N) dropped 5.2% a day after the carrier came under fire from the U.S. government for canceling thousands of flights.

Apple Inc (AAPL.O), Alphabet Inc (GOOGL.O) and Amazon.com Inc (AMZN.O) fell between 1.5% and 3.1% as the U.S. 10-year Treasury yield recovered from a brief fall to rise for a third straight session.

The Dow Jones Industrial Average (.DJI) fell 365.85 points, or 1.1%, to 32,875.71; the S&P 500 (.SPX) lost 46.03 points, or 1.20%, at 3,783.22; and the Nasdaq Composite (.IXIC) dropped 139.94 points, or 1.35%, to 10,213.29.

Declining issues outnumbered advancers on the NYSE by a 3.77-to-1 ratio; on Nasdaq, a 1.97-to-1 ratio favored decliners.

The S&P 500 posted seven new 52-week highs and seven new lows; the Nasdaq Composite recorded 75 new highs and 421 new lows.

Volume on U.S. exchanges was 8.59 billion shares, compared with the 11.3 billion average for the full session over the last 20 trading days.

Reporting by Echo Wang in New York; Additional reporting by Amruta Khandekar and Ankika Biswas in Bengaluru; Editing by Sriraj Kalluvila, Anil D’Silva and Richard Chang

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Business

Southwest flight upheaval a ‘system failure,’ U.S. says

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WASHINGTON, Dec 28 (Reuters) – U.S. Transportation Secretary Pete Buttigieg on Wednesday ratcheted up pressure on Southwest Airlines (LUV.N), saying thousands more canceled flights indicated a system failure at the low-cost carrier.

“We are past the point where they could say this is a weather-driven issue,” Buttigieg said in an interview posted by ABC News on its website. “Don’t get me wrong, all of this began with that severe storm. We saw winter weather affecting the country and severely disrupting all airlines.”

Nationwide, at least 60 people died in weather-related incidents in recent days, NBC News reported.

The rest of the aviation system and other airlines seemed to be back from the weather disruptions, Buttigieg said.

“So what this indicates is a system failure (at Southwest), and they need to make sure that these stranded passengers get to where they need to go and that they are provided adequate compensation, not just for the flights itself … but also things like hotels, like ground transportation, like meals because this is the airlines’ responsibility,” he said, adding he had spoken to the company’s leadership.

U.S. airlines had canceled thousands of flights as a massive winter storm swept over much of the country before and during the Christmas holiday weekend, but Southwest’s woes have deepened while other airlines have largely recovered.

Southwest has canceled a total of more than 14,500 flights since Friday. On Wednesday it canceled 2,500 flights, according to the flight tracking website FlightAware.

[1/3] Travelers at Baltimore Washington International airport deal with the impact of Southwest Airlines canceling more than 12,000 flights around the Christmas holiday weekend across the country and in Baltimore, Maryland, U.S. December 27, 2022.  REUTERS/Michael A. McCoy

Southwest told Reuters it would reimburse customers for travel-related costs and had already processed thousands of requests.

It also said employees across the airline were helping crews in many functions.

Delta Air Lines (DAL.N) said in an email it had capped fares in all domestic and international markets where Southwest operates. The program includes over 700 nonstop markets and are valid through Dec 31. United and American announced similar programs.

U.S. Representative Rick Larsen, top Democrat on the House Transportation and Infrastructure Committee, said in a tweet that the company was treating flight cancellations as “controllable” beginning Dec. 24, which triggers reimbursement for incidental expenses and refunds for full fares.

Southwest CEO Bob Jordan said the low-cost carrier needed to upgrade its legacy systems and apologized to customers and employees in a video message.

Shares of Southwest tumbled over 5% on Wednesday after diving 6% on Tuesday. Some analysts said the cancellations will pressure profits in the fourth quarter.

“The total impact to revenue could be in the 9% range of our expected Q4 revenue, which compares to our current estimate with revenues 15% ahead of 2019 levels in 2022” Jefferies analyst Sheila Kahyaoglu said.

Kahyaoglu estimated total EBITDAR (earnings before interest, taxes, depreciation, amortization and restructuring or rent costs) impact from the cancellations could be in the range of $700 million.

Reporting by Kanishka Singh in Washington; Additional reporting by David Shepardson in Grand Rapids, Michigan and Abhijith Ganapavaram in Bengaluru; Editing by Mark Porter, Howard Goller, Alexandra Alper and David Gregorio

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