Southwest to review meltdown after union criticizes lack of plan
Estimates from the pilots union is putting the costs to the airline due to the holiday cancellations at up to $1 billion
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Southwest Airlines is vowing to take steps to prevent a repeat of the holiday meltdown that stranded thousands of passengers.
The company promised on Thursday to conduct a thorough review of an operational collapse at the end of the year.
The pledge came after a union leader said the carrier had not identified how to avoid a repeat.
Tom Nekouei, vice president of the airlines' pilots association, told Reuters he was on a conference call with Chief Executive Bob Jordan on Monday to discuss the disruption that forced the cancelation of nearly 16,000 flights.
Cancelled Southwest Airlines flights are seen in red on the departures flight schedules at the Southwest terminal at the Los Angeles International Airport on Dec. 27. (AP/Damian Dovarganes / AP Newsroom)
At that time, Jordan said the company had not yet identified a corrective plan of action to avoid a repeat of a cascade of flight cancelations.
"They don't know what it is that they're going do in terms of corrective action because they haven't sat down and run the post-mortem on it," he told Reuters.
The pilots union estimates the flight cancelations could cost up to $1 billion in lost revenue.
Brokerage Raymond James estimated the meltdown could cut Southwest's projected revenue growth by more than half in the fourth quarter.
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Southwest Airlines created a "real cocktail for confusion" after a winter holiday scheduling meltdown, Boyd Group International aviation expert Mike Boyd said on "Varney & Co." (Getty Images)
Southwest is also facing regulatory scrutiny and a lawsuit.
Jordan said the airline had made "great progress" in processing tens of thousands of refunds and reimbursements. It had also delivered the vast majority of bags, which went missing, to customers, he said.
Southwest unions have blamed the company's "outdated" technology and processes for the biggest operational meltdown in its five-decade history.
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A traveler waits outside the Southwest Airlines baggage office at Oakland International Airport in Oakland, California, Wednesday, Dec. 28, 2022. ( David Paul Morris/Bloomberg via Getty Images / Getty Images)
Nekouei said the company's failure to revamp its dated scheduling system that sends crews around the country as passengers for their flying assignments left it vulnerable to "more frequent and more severe" meltdowns.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| LUV | SOUTHWEST AIRLINES CO. | 31.97 | +0.18 | +0.57% |
Jordan said the company spends about $1 billion a year on technology and will continue to upgrade the tools and processes its employees use.
Reuters contributed to this report.