Southwest has a plan to prevent another air travel meltdown

Southwest Air Lines ticket agents check-in passengers at Hartsfield-Jackson Atlanta International Airport after the Federal Aviation Administration (FAA) had ordered airlines to pause all domestic departures due to a system outage in Atlanta, Georgia, U.S., January 11, 2023. REUTERS/Alyssa Pointer

Southwest Airlines CEO Bob Jordan has detailed steps the company is taking to avert another operational disaster.

In a Sunday email sent to members of the airline's loyalty program, Jordan outlined a plan to ensure Southwest does not repeat a meltdown over the busy holiday travel stretch that included more than 15,000 canceled flights.

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Already, Jordan said, the airline has put measures in place to "further reduce the risk of future operational disruptions," including adding supplemental workers who can quickly handle scheduling problems if large numbers of crew are out of place. Unions had warned Southwest about outdated technology that contributed to the problems last month, including systems for scheduling crew.

Jordan said in the email Southwest is already enhancing some of its technology to better communicate with large numbers of crew when their schedules change frequently. Updating and optimizing its crew recovery system is also a priority, Jordan said.

Looking ahead, the chief executive said the issues last month would accelerate the airline's plans to enhance technology and processes; the company has budgeted more than $1 billion of its annual operating plan for upgrading, maintaining and investing in IT systems.

To get a better understanding of the weaknesses that caused the holiday failure, Southwest has brought in consulting firm Oliver Wyman to examine the issues and recommend additional steps. The airline's board of directors has also appointed an operations review committee to address what happened and oversee the response.

Southwest's holiday meltdown - which snowballed after massive storm systems strained the carrier's network of flights - drew scrutiny from government officials, ruined holiday plans for untold number of travelers and is expected to cost the airline as much as $825 million.

"They were the airline Grinch that stole Christmas," said Mike Boyd, president of aviation consulting firm Boyd Group International.

In his email to loyalty members, Jordan said "virtually all" bags that were still separated from their owners had been returned by the end of last week, and "nearly all" refunds had been processed. Workers are still handling "tens of thousands of reimbursement requests" every day.

"We fell short of your expectations and the high standards we have of ourselves, and for that we are deeply sorry," Jordan wrote. "It is our steadfast commitment to make the necessary changes to address the issues we faced and to regain your trust and confidence."

Boyd said Jordan appears to be taking necessary steps to address the issues that plagued the airline.

"They're on it," he said. "There's no question: You don't fix something like that overnight."

Travel analyst Henry Harteveldt, president of Atmosphere Research Group, said he would like to see more specifics from Southwest, such as the timeline for a review and what precise technology improvements are being made.

He expects some travelers will want the same information before they are comfortable booking again with Southwest, especially considering the airline suffered cascading cancellations on a smaller scale in October 2021.

"Southwest has now, twice within 15 months, been shown to be tangibly inferior to its competitors in its ability to recover from weather-related disruption," he said.

Harteveldt said he believes the issues shook the company's leader and board "to their cores" and that they realize they will have to make smarter investments in their technology moving forward.

"I think that Southwest is committed to doing everything it can to keep a disruption like the one we saw in December from occurring again," he said. "I think we have to be fair to the airline in acknowledging that there's a lot of work necessary to do that and the process is going to be one of incremental progress and improvement."

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