Southwest Airlines will do everything from acquiring more deicing trucks in Chicago and Denver, to upgrading its internal technology and communications systems by this winter to avoid a repeat of its massive holiday flight meltdown.
In a new report by the Dallas-based carrier’s board and independent advisor Oliver Wyman, Southwest outlined three broad areas where it is making improvements to avoid a repeat of last Christmas and New Year’s fiasco. Investments are focused in three areas: Winter operational readiness, technology, and internal collaboration. Of 13 specific actions, the airline has only completed three with the balance set to be done before the end of the year.
“With this plan in motion, we can move forward and focus on continuing to deliver the reliable operation, high-quality customer service, and legendary hospitality that Southwest is famously known for,” CEO Bob Jordan said in an email Friday to loyalty plan members.
The report is the latest on what occurred when the airline cancelled more than 17,000 flights between Christmas and New Years and disrupted the trips of tens-of-thousands of travelers. The situation generated outrage among the public and officials alike, with even President Biden tweeting that the airline would be held “accountable” for the situation.
In the report, Southwest said it had refunded, reimbursed, and returned lost luggage to more than 99 percent of travelers affected by the holiday meltdown.
The cancellations, during one of the busiest travel periods of the calendar in the U.S., cost Southwest $850 million in the fourth-quarter alone and pushed it to a loss for the quarter — a period when most other airlines made money. It will likely accrue additional costs related to the event throughout the year, with analysts warning that some travelers could book away from the carrier in the first and second quarters.
At a U.S. Senate Commerce, Science, and Transportation Committee hearing in February, Southwest Chief Commercial Officer Andrew Watterson acknowledged that the airline had “messed up.” He described the carrier’s winter-weather preparedness as “insufficient” ahead of Winter Storm Elliott that affected a large swath of the U.S. in the days before Christmas, and precipitated Southwest’s meltdown.
The report affirms Watterson’s statements with most of its action items centered on improved winter weather operations. Southwest will acquire more deicing trucks, increase its stocks of deicing fluid, and secure more deicing “pads” — airport parking spots away from the terminal where planes can be deiced — in preparation for future storms. Investments will be focused at the Chicago Midway, Dallas Love Field, Denver, and Nashville airports. The airports are four of the eight busiest by departures in Southwest’s system; Denver is its busiest with up to 270 daily departures, according to Diio by Cirium schedules.
Whether the action items outlined are enough to avoid future meltdowns is unclear. Elliott, which stretched across the entire continental U.S. in the days before Christmas, affected operations at every U.S. airline but only Southwest was unable to recover. More winter weather preparedness will undoubtedly help the carrier, but the preventing operational distress takes more than just equipment, and the support of the entire airline. One only has to look to Delta Air Lines to see a carrier that has made operational reliability a company-wide ethos.
“This began with chronic ground support personnel shortages and excessive reliance on mandatory overtime, then cascaded into the flight and crew scheduling operations,”said Bob Mann, an adviser at R.W. Mann & Company and former airline executive. “Will it be enough? Time will tell … Planning is important, but ultimately, execution matters.”
Somewhat surprisingly, technology investments are not the largest action item for Southwest in its report about the meltdown. The role of the airline’s crew assignment system, known as SkySolver, was an initial focus as a potential cause of the situation. The system, which did play a role among numerous other factors, was upgraded in February. Southwest lists two remaining technology-related action items: enhancing crew notifications and system recovery functions.
Southwest will make $1.3 billion in technology-related investments in 2023. The number, while up from roughly $1 billion in 2019, is unchanged from the beginning of the year.
Other areas where the carrier will make improvements this year include pulling down team silos, and enabling more coordination and communication. This should allow Southwest to better coordinate and respond to future operational crises.
“We will not allow a week in December to define us; but we will continue to learn from what happened and be better because of it,” the airline said in the report.
