Southwest Airlines on Thursday said it would improve its ability to deal with severe winter weather by adding staff and equipment at key airports, and already has boosted its phone system to handle larger volumes of calls from customers and employees. The measures are part of its plan to prevent a repeat of the December meltdown that upended the travel plans of millions of its customers and drew the scrutiny of regulators and lawmakers.
The breakdown, which forced the carrier to cancel more than 16,700 flights over 10 days, also proved costly for the company, which said it would spend more than $1 billion in lost ticket revenue, labor costs, reimbursements and goodwill gestures for customers and employees.
“Our Purpose has always been to connect you to what’s important in your life,” the carrier said on a website summarizing its actions. “We fell short on that Purpose this past December, when extreme weather and an unprecedented number of flight cancellations overwhelmed our ability to recover and serve you properly.”
Southwest’s troubles began Dec. 21 after a winter storm hit one of its key bases at Denver International Airport. The airline had canceled flights ahead of the storm, but a post-incident analysis by its pilots union found management had been too optimistic about its preparation. Among the issues the carrier encountered: The storm had hobbled its Denver ground crews’ ability to de-ice and prepare aircraft for service, a problem that eventually hit other bases as the storm moved east.
As cancellations grew, Southwest’s system for matching crew members with aircraft couldn’t keep up. Eventually, the airline was forced to cancel thousands of flights to reboot its operations.
After the meltdown, Bob Jordan, Southwest’s chief executive, said that in addition to conducting an internal review, the company had hired the consulting firm Oliver Wyman to conduct a separate review. A summary of those findings was released Thursday.
Many of the actions contained in the summary already have been outlined by company executives, including an upgrade to the crew scheduling software that became overwhelmed. Changes to that system were made in February. The company also previously said it planned to spend $1.3 billion on technology upgrades and improvements, an increase of 25 percent over 2019 spending levels.
The changes include securing additional space to de-ice aircraft at key hubs in Dallas, Denver, Nashville and Chicago’s Midway airports. Company executives said Southwest had far fewer de-icing pads at the Denver airport than other carriers, which hampered its ability to recover from wintry weather. It also will examine winter staffing levels with an eye toward potentially increasing staffing when extreme temperatures are forecast.
The carrier said the steps will be in place this year.
The report indicated the airline was fully staffed during the disruption. However, in a Dec. 21 memo obtained by The Washington Post, Southwest’s vice president for ground operations indicated the carrier had declared a “state of operational emergency,” because of an “unusually high number of absences” of Denver-based ramp employees.
“Our actions will address everything from ground equipment to the volume of aircraft de-icing we can accomplish in the harshest conditions,” the report said. “We are improving how we communicate and align across multiple operational workgroups during disruptions, including strengthening our interconnected scheduling and operations systems so they function effectively in extreme circumstances. And we are making organizational changes to improve coordination among key divisions of the airline.”
The report also outlined challenges the carrier faced in the wake of the massive disruption, including reuniting nearly 100,000 pieces of luggage with customers whose trips had been canceled. It said fewer than 100 bags remain unclaimed or without identification.
The carrier also has processed more than 99 percent of refunds and reimbursement requests. In January, it gave customers affected by the disruption 25,000 frequent flier miles, valued at more than $300. According to its report, nearly half of travelers who received the miles already have flown or have made a future booking.
At a hearing before the Senate Commerce, Science and Transportation Committee in February, Andrew Watterson, Southwest’s chief operating officer, repeatedly expressed regret for the problems.
“I want to sincerely and humbly apologize,” he told committee members, many of whom shared stories of constituents caught in the meltdown. “We understand that for many, this is the most important trip they take all year.”
Southwest is paying the price for its poor performance, swinging to a net loss for the final quarter of 2022 because of expenses attributed to the collapse. The carrier said the meltdown cost it about $800 million in the fourth quarter and estimated that it could dent revenue for the first three months of 2023 by as much as $350 million.
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