Three months after a travel meltdown plagued Dallas-based Southwest Airlines, the carrier is rolling out what it hopes to be its redemption: a three-part plan to boost operations.
At J.P. Morgan’s Industrials Conference, Bob Jordan, Southwest Airlines’ CEO, unveiled the fixes, which it hopes to complete by October. Southwest Airlines announced the plan following an initial study with aviation consulting firm Oliver Wyman after the December crisis in which it canceled 16,700 flights over 10 days during the key holiday travel period.
“We understand the root causes that led to the holiday disruption, and we’re validating our internal review with the third-party assessment,” CEO Bob Jordan said in a release. “Now, we expect to mitigate the risk of an event of this magnitude ever happening again. Work is well underway implementing action items to prepare for next winter—with some items already completed. I want to thank our employees and customers for their patience and grace, and we’re resolved to emerge an even stronger airline.”
The plan largely sticks to the narrative company officials have stuck to over the last three months — that it was unprepared for a winter storm that hit two key airports and that its technology systems were unprepared for the massive number of pilot and flight attendant reassignments that eventually cascaded through its nationwide network.
The disruptions in December paralyzed travel for more than a week before and after Christmas, with about two million passengers losing seats on flights. It reported an $800 million hit from the events, went through refunding and reimbursing customers and faced a Department of Transportation inquiry for potentially overscheduling flights.
The carrier cited the winter storm being “more severe than expected,” as one of the reasons Southwest experienced disruptions. A driver of the disruption, however, was determined to be the volume of cascading and close-in flight cancelations that overwhelmed operations and the carrier’s crew network.
The three-part plan focuses on improving winter operations, accelerating operational investments and cross-team collaborations, the company said.
Winter operations
Winter operations proved to be an issue when Winter Storm Elliot had greater severity than what Southwest had planned for. At Denver International Airport and Chicago Midway International Airport, 25% of crew members were impacted by flight cancelations.
To solve these problems, Southwest plans to buy more deicing trucks, secure more deicing pads and deicing fluid capacity at important airports and purchase more engine covers and heaters for cold weather. Jordan told conference attendees on Tuesday that the carrier is in the process of purchasing five deicing trucks for Denver and five for Chicago Midway.
It’s also going to take a look at winter staffing levels, noting how grounds operations employees were limited in extreme temperatures. The company also said that it will add a new weather application to provide crewmembers with real-time weather indicators to help deicing holdover times, or the required before an aircraft must be deiced again before departure.
Accelerating operational investments
Southwest is looking to prioritize tools and technology that will allow for greater recovery during extreme events. It’s budgeting more than $1.3 billion on upgrades and maintenance to information technology systems this year.
Andrew Watterson, Southwest’s chief operating officer, fielded questions from lawmakers in February at a senate hearing in Washington. It was where he announced an upgrade to the company’s crew scheduling software would be put in place that same week.
Watterson said in a release that he was confident in Southwest’s path forward and believes that the carrier’s “best days are ahead.”
The carrier is looking to update its Skysolver optimization software, enhance its electronic crew notification system and upgrade its phone system and upgrade its customer support and services phone system. It’s also planning an upgrade to its employee mobility tools. These upgrades will focus on surge protection and efficiency during high call volume times.
Cross-team collaborations
The carrier is continuing with plans to align network planning and network operations control teams under one senior leader to execute operational plans. It’ll also look to update its leading indicators dashboard, improve alert and decision support tools and look at upgrading capabilities to better integrate aircraft and crew recovery optimization.
Southwest is continuing an existing five-year operational modernization plan, which began in 2022. The plan focuses on operational investments and organizational alignment to support customers and employees.
“I’m very encouraged by the work underway to address the challenges we faced in December,” Watterson said in a release. “Our operational performance this year has been among the best in the industry, and we’re committed to completing our action items while also running a safe, reliable operation supported by our legendary customer service that has made us famous throughout our 52-year history.”
Jordan told attendees operational performance has remained strong. In the first two months of 2023, Southwest ranked No.2 behind competitor Delta Air Lines for on-time performance. He also said engagement has remained strong. Nearly 50% of passengers that were disrupted by the December meltdown have booked or flown on Southwest.
This month, Southwest announced it would use Amazon.com servers to help process fare searches, crew scheduling and other software tasks. The carrier is also underway for its busiest year ever at Dallas Love Field, bringing back a handful of nonstop flights that weren’t on the schedule a year ago to cities such as Philadelphia; Pittsburgh; Louisville, Ky.; Palm Springs, Calif.; and Minneapolis.
Southwest believes it had the existing technology and staffing to handle irregular operations, the release said, but the “pace and breadth of disruptions” strained the carrier. Jordan reaffirmed that the carrier stands behind its business model and point-to-point network, saying its disruption review has not revealed the need for any structural changes there.
“A lot of those stories you read early, there was a theme of it’s all about technology,” Jordan said on Tuesday. “It’s all about different things. They weren’t all fully based in fact. Good headlines, but not based in fact. So I’ll admit that’s frustrating, but that always happened.”
Southwest plans to release more details in the following weeks with more detailed findings of the study into the meltdown, the company said.
