Transportation Department Investigating Southwest for Mass Travel Disruptions, ‘Unrealistic Scheduling’ of Flights

Stranded Southwest Airlines passengers looks for their luggage in the baggage claim area at Chicago Midway International Airport in Chicago, Ill., on Dec. 28, 2022. Kamil Krzaczynski/AFP via Getty Images

Southwest Airlines is facing an investigation into flight cancellations that took place in late December which affected thousands of passengers and caused an estimated millions of dollars’ worth of losses to the company, with the U.S. Department of Transportation (DOT) looking into potential “unrealistic scheduling” of flights.

In the week ended Dec. 29, Southwest Airlines canceled more than 16,000 flights after its crew-scheduling system got overloaded and could not handle changes in staffing. A “rigorous and comprehensive investigation into Southwest Airlines’ holiday debacle that stranded millions” of passengers is in its early stages, the DOT said in a statement, according to Reuters.

The DOT “will leverage the full extent of its investigative and enforcement power to ensure consumers are protected and this process will continue to evolve as the department learns more.”

The department is also reviewing whether “Southwest executives engaged in unrealistic scheduling of flights, which under federal law is considered an unfair and deceptive practice.”

The DOT has forwarded thousands of customer complaints to the airline and stated that if Southwest fails in reimbursing customers adequately, it will take strict action.

Southwest Airlines responded that it will “cooperate” with any investigation by the government and defended its holiday scheduling as “thoughtfully designed.” It blamed an “unprecedented storm” for stressing out the airline’s systems and processes.

Flight Disruption, Airline Losses

In the last 10 days of December, Southwest canceled around 16,700 flights. Though the meltdown was kicked off by a winter storm, Southwest’s struggles got worse compared to other airlines due to its technically inadequate crew-scheduling system.

Owing to system issues, the company ended up losing track of flight attendants and pilots. Employee rescheduling and customer service phone lines got jammed with calls. Passenger flights were often canceled, leaving them with no alternate options for days. Meanwhile, crews were left sitting without being assigned to an aircraft.

According to the company, the holiday travel debacle could add $725–825 million in losses in the fourth quarter before taxes. Roughly half of these projected losses come from an “estimated revenue loss” of around $400–425 million.

The remaining loss is accounted for by additional operating expenses, which include additional compensation to employees, reimbursements to customers, and other measures.

In an interview with ABC on Dec. 28, Transportation Secretary Pete Buttigieg said that the numerous delays by Southwest Airlines was a problem that was “past the point where they could say this is a weather-driven issue.”

Though other airlines were also affected by the winter storm, they were quickly back to resuming normal schedules, he noted.

“So what this indicates is a system failure [at Southwest], and they need to make sure that these stranded passengers get to where they need to go and that they are provided adequate compensation, not just for the flights itself ... but also things like hotels, like ground transportation, like meals because this is the airlines’ responsibility,” Buttigieg had said.

Reimbursements, Lawsuits, System Issues

Earlier this month, Southwest CEO Bob Jordan revealed that the airline was processing refunds for customers affected by the late-December delays. Refunds were being processed within three days of receiving requests from customers, in line with the DOT deadlines.

In addition to the refunds and reimbursements, affected customers would also receive 25,000 reward points worth more than $300. However, some customers have complained that the airline is not refunding them properly. One customer has filed a class-action lawsuit.

Southwest shareholders have also filed a lawsuit against the firm for failing to disclose problems with the airline’s scheduling systems or downplaying these issues in quarterly reports. Plaintiffs are arguing that the airline “ignored the serious risk that having outdated technology posed to the company’s business.”

Some union officials claim that they have been warning the airline about such concerns with the system for several years. Back in October 2021, for example, a similar problem had caused flight disruptions.