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Key Senate Democrats push Southwest CEO for answers on holiday meltdown

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Southwest Airlines Executive Vice President Bob Jordan speaks as he’s interviewed by CNBC outside the Recent York Stock Exchange (NYSE) in Recent York City, U.S., December 9, 2021.

Brendan McDermid | Reuters

Fifteen senators, including Bernie Sanders, Elizabeth Warren and Cory Booker, sent a letter to Southwest Airlines CEO Bob Jordan this week demanding answers concerning the airline’s management of 2022 holiday travel disruptions, which left hundreds of passengers stranded in airports.

The questions push for details concerning the causes of the meltdown, including Southwest’s overloaded crew scheduling software that buckled from all of the flight changes. The mass cancellations got here alongside severe winter weather across the U.S. and elevated holiday travel demand, which forced U.S. airlines to cancel hundreds of flights.

When other airlines recovered from the storm, Southwest’s problems got worse. It canceled much of its schedule to attempt to reset its operation, spoiling the travel plans of tons of of hundreds of shoppers.

“Although winter storm Elliott disrupted flights across the country, every other airline operating in the USA managed to return to an everyday flight schedule shortly thereafter — except Southwest,” the letter sent Thursday reads.

The airline canceled nearly 17,000 flights between Christmas Eve and Recent 12 months’s Eve. The corporate projected the meltdown would cost it between $725 million and $825 million within the fourth quarter.

“We appreciate the concerns expressed within the letter from the Senators and share within the commitment to making sure Southwest’s Customers are properly cared for and that actions are taken to mitigate risks of this happening again,” Southwest said in a press release. “We hope the recent refunds, reimbursements of expenses, and goodwill gestures to our Customers and Employees show that we would like to go above and beyond in earning their trust once more.”

The senators also asked the airline for details on compensating affected passengers via ticket refunds, returning lost baggage and reimbursements for alternate travel arrangements made within the wake of Southwest cancellations.

Southwest continues to be within the strategy of reviewing requests for reimbursement and refunds from impacted customers.

The senators’ letter also highlights Southwest’s use of funds, claiming it neglected to update companywide systems which have long been outdated.

“Southwest has long known that its software was outdated, and the Southwest Airlines Pilots Association had warned that such a debacle was inevitable unless Southwest invested in recent scheduling systems,” the letter says. “As a substitute of constructing those investments, Southwest distributed over $1.8 billion in dividends to its shareholders and purchased back over $11 billion in its shares between 2011 and 2020.”

Sanders previously bashed Southwest on Twitter for its “corporate greed,” noting the airline used $5.6 billion of its $7 billion in Covid relief on stock buybacks for shareholders quite than investing in its internal infrastructure.

The senators are giving Jordan until Feb. 2 to answer their questions.

Sen. Maria Cantwell, D-Wash., chair of the Senate Commerce Committee, has already said she plans to carry a hearing on Southwest’s meltdown.

— CNBC’s Leslie Josephs contributed to this report.

Correction: The senators sent the letter to Southwest on Thursday. An earlier version misstated the day.

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