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