There are problems at two of the nation’s top five airlines. Labor problems.
25.08.2023 - 14:22 / skift.com / Pete Buttigieg / Richard Blumenthal / Bernie Sander / Southwest Airlines / Bob Jordan / Maria Cantwell
A group of 15 U.S. senators on Friday demanded Southwest Airlines Chief Executive Bob Jordan answer questions about the low-cost carrier’s holiday meltdown that led to nearly 16,000 flight cancellations.
“The airline must examine the causes of this disaster and ensure it never happens again,” said the letter led by Democratic Senators Ed Markey and Richard Blumenthal asking for answers about the software it uses for crew scheduling and why did the company “fail to invest funds to modernize these systems to ensure that it could effectively coordinate crew and flight schedules after major storms and during major travel periods?”
The senators, including Banking Committee Chair Sherrod Brown, Foreign Relations Chair Bob Menendez, Finance Committee Chair Ron Wyden and Budget Committee Chair Bernie Sanders, asked for details the total number of refunds requested and expenses reimbursed.
Southwest said Friday it appreciated the senators concerns “and share in the commitment to ensuring Southwest’s customers are properly cared for and that actions are taken to mitigate risks of this happening again.”
Commerce Committee Chair Maria Cantwell earlier this week pledged to investigate the meltdown.
The U.S. Transportation Department is forwarding thousands of Southwest consumer complaints as part of its ongoing investigation. Transportation Secretary Pete Buttigieg, who met virtually with Jordan on Jan. 6, has repeatedly vowed to hold Southwest accountable if it fails to adhere to the promises made to reimburse passengers.
Southwest has warned it would take a quarterly profit hit of as much as $825 million because of the meltdown.
Jordan told Reuters on Thursday the airline is looking at all options to ensure the operational meltdown it suffered last month is not repeated and hired consultancy Oliver Wyman to investigate the disruption, Jordan told Reuters in an interview.
Southwest’s board has set up a new Operations Review Committee to oversee management following last month’s systems collapse, Jordan said. General Electric Co is updating the company’s software which will automate its crew scheduling systems, he said.
There are problems at two of the nation’s top five airlines. Labor problems.
Southwest Airlines recently made changes to its pre-flight boarding policies by limiting the options for passengers to purchase a better spot in line for an extra fee.
United Airlines is taking a subtle dig at rival Southwest Airlines’ massive number of holiday season cancellations in an ad it’s airing during the Super Bowl on Sunday.
Two months. That’s how long Southwest Airlines expects there to be an impact on bookings from its massive holiday meltdown that disrupted millions of travelers over Christmas and New Years.
Southwest Airlines has put an initial number to the losses incurred during its holiday meltdown: a $725-825 million hit to its pre-tax income in the fourth quarter. That number includes both $400-425 million in lost revenue and added costs, for example reimbursing people for alternative travel costs.
The U.S. Transportation Department (USDOT) said late on Monday it would examine the large number of Southwest Airlines cancelled and delayed flights in recent days to determine if they were in the airline’s control, calling them “unacceptable.”
Southwest Airlines will pay a dividend to its shareholders of record as of January 10, 2023. This may not seem like a notable move for a carrier that has paid dividends for most of 50-plus year existence but it is: Southwest will be the first U.S. airline to resume shareholder returns since the pandemic.
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Southwest Airlines was up and running on a normal schedule on Friday after a massive winter storm crippled operations this week and exposed problems at the low-cost carrier.
Southwest Airlines capped off its 2022 with the unenviable distinction of cancelling more than 15,000 flights in total during the week of Christmas, the result of a system failure caused by several issues that were exacerbated by a nationwide winter storm.
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