The US Department of Transportation formally warned Southwest Airlines on Thursday that it will face consequences if it fails to do right by stranded and inconvenienced passengers. Transportation Secretary Pete Buttigieg wrote in a letter to Southwest CEO Bob Jordan that officials will take action against the airline if it does not follow through on promises to reimburse passengers for alternative transportation costs, as well as provide meals, hotels, refunds and baggage reunification. The department has the ability to levy fines as a penalty. The Associated Press has the story:
Southwest: Normal flight operations to resume Friday
Newslooks- DALLAS (AP)
Southwest Airlines said it expects to return to normal operations Friday after more than a week of widespread flight cancellations that started with a winter storm and spiraled out of control because of a breakdown with staffing technology.
If Thursday turns out to be the last day of the Southwest crisis, it will be marked by about 2,350 canceled flights, nearly 60% of the airline’s schedule.
Southwest declined to say how many people have been affected, but it is likely that far more than 1 million have had a flight canceled.
The airline has scrapped more than 13,000 flights since Dec. 22, according to tracking service FlightAware. Its planes have 143 to 175 seats and were likely nearly fully booked around the Christmas and New Year’s holidays.
Airline executives said that crew-scheduling technology — a major cause of the meltdown — has caught up with the backlog of pilots and flight attendants stranded in wrong locations. Southwest operated 1,600 flights on Thursday, including 104 that carried no passengers but instead served to put planes and crews in position for full operations on Friday.
Southwest leaders believe they will have enough empty seats over the next several days to accommodate any stranded passengers still wishing to fly on the airline — while conceding that many had either given up or found other transportation.
Southwest will refund tickets on canceled flights, and executives repeated a promise to reimburse travelers who were forced to pay for hotel rooms, meals and flights on other airlines. The airline’s chief commercial officer said that process will take several weeks. Executives said the airline also will pay to ship baggage that has piled up at airports around the country.
Southwest lost $75 million during a much smaller disruption in October 2021 that resulted in about 2,000 canceled flights over a four-day stretch.
CEO Robert Jordan said it was too early to say how much the company will lose in revenue and incur in extra costs because of the current crisis. Jordan told reporters that events of the last week will likely cause Southwest to re-examine priorities and spending levels for technology improvements that were already underway, but he offered no specifics.
“This has been an incredible disruption, and we can’t have this again,” he said.
Southwest has struggled to recover after being overwhelmed by a winter storm that swept the country last week. Other airlines bounced back within a couple days, but Southwest ran short of ground workers at airports in Denver and Chicago, and its problems exploded from there.
On Thursday, Southwest accounted for about 95% of all canceled flights in the United States. Executives said they had canceled only 39, or less than 1% of the schedule, for Friday.
Jordan faces a crisis just 11 months after he became CEO, replacing longtime leader Gary Kelly. Southwest had 88 planes and 7,000 employees when Jordan joined 35 years ago. Now it has more than 700 planes and more than 60,000 employees.
Speaking to reporters a month ago at Southwest headquarters in Dallas, a relaxed and jocular Jordan spoke in glowing terms about the airline’s culture and customer service. He outlined five priorities, including modernizing the airline’s technology for scheduling pilots and flight attendants.
Under Southwest’s system, which dates to the 1990s, when crew members are reassigned to a different flight or even change hotels, “somebody needs to call them or basically in the airport chase them down and tell them what their re-route looks like,” Jordan said.
“I do think the scale and the growth of the airline got ahead of the tools that we have,” he said. “No fault of anybody — takes investment — and we’ll get all this done.”
The federal government is investigating what happened at Southwest. Transportation Secretary Pete Buttigieg took fresh swipes at the airline on Thursday, tweeting that he would hold Southwest responsible for “unacceptable performance.” He asked followers to tell his department if Southwest fails to reimburse them for travel costs.
Southwest added a page to its website specifically for stranded travelers, and it invited customers to submit receipts for unexpected expenses. The airline said it would consider reimbursing “reasonable” expenses for meals, hotel rooms and alternate transportation incurred between Dec. 24 and Jan. 2. Consumer advocates criticized the use of the word “reasonable” as too vague.
Investors cheered signs that Southwest might finally be getting a handle on the crisis. The company’s shares rose nearly 4%, but were still down nearly 8% for the week.
Southwest has been the most profitable U.S. airline so far this year, earning $759 million in net income through September.
Raymond James airline analyst Savanthi Syth said Thursday that she still expects the company to post a small profit in the fourth quarter, but that some consumers are likely to switch from Southwest to other airlines over the next few months when booking travel.
Another airline analyst, Colin Scarola of CFRA, said he too didn’t expect the “Christmas week fiasco” to have a lasting impact because Southwest often has lower fares than its three largest rivals: American, United and Delta.
“History shows customers tend not to permanently ditch an airline even after an awful experience due to the commodity-like nature of the product,” he wrote in a note to clients.