Passengers lined up by the Southwest Airlines counter at San Francisco International Airport (SFO) in San Francisco, California, United States on December 26, 2022 as Southwest cancels greater than 2,800 U.S. flights on Monday amid fierce winter storms.
Tayfun Coskun | Anadolu Agency | Getty Images
Southwest CEO Bob Jordan’s message, after a vacation meltdown derailed the travel plans of tens of millions, is evident: “I am unable to say it enough. We tousled.”
His focus now’s ensuring an identical crisis never happens again. The airline has hired consulting firm Oliver Wyman to review its processes, interview staff and union members, lay out what went improper, and determine learn how to avoid it in the long run. The low-cost airline is working with General Electric to enhance the capabilities of software that helps Southwest work out crew reassignments. The airline’s board has created an operations review committee to assist managers work through such events.
The event was jarring for a lot of travelers used to Southwest customer support, which incorporates policies like free checked bags, a rarity for domestic U.S. travel. Lawmakers and Transportation Secretary Pete Buttigieg said they need to look further into the disruptions.
Less a 12 months into the airline’s top job, within the aftermath of travel chaos he hadn’t seen in his greater than three a long time at Southwest, Jordan is now tasked with making things right with passengers and employees.
“We took good will out of the bank. We all know that,” Jordan said in an interview earlier this month. “We’ve work to do to repair trust, but our customers are very loyal and we’re seeing that loyalty.”
Southwest said it offered premium pay to flight attendants and $45 million in “gratitude pay” to pilots due to meltdown. Each groups have warned about inadequate technology and scheduling for years.
The carrier has also handed out 25,000 Rapid Rewards points each, which the corporate estimates at a roughly $300 value, to about 2 million individuals who had flights booked over the chaotic holiday period, Jordan said.
He said that a recent fare sale was successful and that many purchasers are redeeming the steadily flyer points for Southwest flights.
Southwest said the chaos will likely mean successful of between $725 million and $825 million to its pretax results and a rare quarterly loss. Executives will face questions from analysts and reporters when the carrier reports results, scheduled for Thursday morning.
Southwest said it canceled about 16,700 flights between Dec. 21 through Dec. 31, a tally that swelled after it did not get better from severe winter weather that crippled travel across the country, stabilizing days later. Airline executives had expected it to be the busiest travel period for the reason that Covid-19 pandemic began.
Hydraulic fluid turned so thick within the brutal cold that jet bridges couldn’t move. Snow and high winds suspended operations at airports across the country. Airplane engines froze.
Most airlines had largely recovered from the bad weather by Christmas Day, but Southwest’s problems worsened when crews needed to call in to get latest assignments or hotel rooms, causing a backup.
The carrier’s aircraft and crews were ignored of place and on the mercy of crew scheduling systems that were designed to handle current or future flight disruptions, not a pileup of flight changes previously.
“We wanted a bigger answer to reset the network,” Jordan said. “That was principally pulling the schedule down.”
Southwest flew around just a 3rd of its planned schedule for several days after Christmas to get crews and planes where they needed to go.
“The GE Digital tool that’s integrated into Southwest’s systems performed as designed throughout the event, and we’re working with them to define latest functionality as they improve their crew rescheduling capability,” a GE spokesman said Tuesday.
Still, scheduling chaos after bad weather is not latest for the airline industry. JetBlue‘s meltdown in February 2007 cost CEO David Neeleman, JetBlue’s founder, his job. (He has since began a latest carrier within the U.S., called Breeze Airways.)
Southwest itself had a smaller-scale cascade of flight disruptions in October 2021 that cost it around $75 million. Months earlier, Spirit Airlines took a $50 million hit from mass disruptions.
“Every airline has its fall, and from that they rise with latest perspectives,” said Samuel Engel, a senior vice chairman at consulting firm ICF. “The airline reaches a certain point of complexity and has a disruption event of such scale that it causes them to look deep inside.”
Each Spirit and Southwest operate so-called point-to-point networks that do not depend on hubs, like larger airlines, and as a substitute have planes hopscotching across the country. The model generally works and helps keep costs down, but it could possibly compound disruptions during extreme events.
Jordan defended the model and said the network is normally easier to get better because travelers do not have to depend on connections to get to their destinations.
“The difficulty here wasn’t the network, the problem was what number of places got hit with weather and what number of cancellations that drove, principally repeatedly,” he said.
Even those travelers burned by an airline in an event like this one face few alternatives when booking airline tickets and are sometimes focused on price and schedule, ICF’s Engel said.
Southwest, United, Delta and American control greater than three-quarters of the U.S. market.
“Customers just consistently select their flights based on fare and schedule,” he said. “As they are going through a disrupted trip they’ll say ‘never again’ — after which they do.”
Mark Ahasic, an aviation consultant who worked with JetBlue through the 2007 meltdown, said the airline’s repute “took successful, nevertheless it didn’t destroy the brand.”
Southwest has to resolve the problems that caused the vacation trouble and make amends with customers, but many travelers — particularly those at airports where Southwest has a powerful foothold — typically have few airline decisions, Ahasic said.
Southwest has nearly finished processing customer refunds and is working through the more complex task of reimbursements, which Jordan said includes every little thing from meals to dog-sitting fees. Some travelers who were left to pay high fares for scarce seats on other airlines are still waiting for his or her a reimbursement.
Codi Smith, a 28-year-old artist who lives in Los Angeles, paid $578.60 for a Delta flight back to LA from his mother’s house in St. Louis after Southwest canceled a part of his return trip after Christmas. Southwest offered Smith another flight on Recent 12 months’s Eve, but Smith said he has multiple sclerosis and needed to get back to Los Angeles sooner to get his medication.
“I just didn’t know what could occur,” Smith said.
Southwest refunded Smith for the portion of his trip on its airline, but as of last week hadn’t refunded him what he spent on the Delta flight. He said Southwest sent him 4 inflight drink coupons.
“Why would I take advantage of drink tickets once you owe me $600?” he said. “I actually just want this a reimbursement.”
Cameron Brainard, a voiceover artist and country music radio host, said he paid greater than $1,000 to get back to Recent York from Nashville, Tennessee, including a rental automotive from Louisville, Kentucky. Southwest offered him $540.02, noting in a Jan. 19 email, which Brainard shared with CNBC, that he hasn’t claimed the reimbursement yet.
“Be sure to assert this payment before it expires” in July, the e-mail reads. “This payment constitutes full and final settlement of your claim with Southwest Airlines.”
Brainard said he flies Southwest steadily and is not planning to quit the airline after his cancellation, though he would “second guess it” depending on how his reimbursement pans out.
“I hope it makes them a greater airline,” he said.