Southwest Airlines faced a travel holiday disaster in December 2022. This led to many fed-up passengers and around $220M incurred loss. Southwest Airlines canceled more than 15,700 flights resulting in millions of stranded passengers. Initially, the severe winter storm caused multiple flight cancellations but later the airline’s software system would become a problem.
Southwest is a United States airline with its head office in Dallas, Texas. The low-cost carrier operates flights to around 121 locations in the states and ten other international countries. Presently, Southwest Airlines is the third largest in North America according to the number of passengers it has flown. So, what happened with Southwest Airlines? Learn how and why a reputed low-cost airline fell under such circumstances which lead to questioning its outdated technology, the tone-deaf approach of its executives, and failed business model.
After almost a week of massive winter storms in the United States lead to the cancellation of many flights of airlines across the states. Some of the major airlines like Delta, American, and, United Airlines canceled under 40 flights in 2022 as per the flight tracking data. Among these, Delta Airlines has the least number of cancellations while Southwest Airlines canceled 2,600 flights which make up more than 60% of the scheduled flights on Wednesday. Not only that, the airline continued to cancel 2,500 flights per day and flew one-third of its planned departures for forthcoming days. This situation left its passengers helpless, some were unable to rebook Southwest flights while others had to purchase expensive tickets from other airlines.
Why Southwest Airlines canceled thousands of flights? Well, let’s understand it this way. The airline follows a “point-to-point” transportation system allowing passengers to fly directly from one stop to another. There is no stop in between or connecting flights. Southwest usually does not stop at a central hub. This transit model benefits passengers with less travel time by eradicating connecting flights.
Whereas, other airlines use a “hub and spoke” transit system. This transits passengers from smaller cities to the airline hub airport where they take connecting flights. In this system, it is easier to tackle situations like in this case.
However, it is harder to have standby staff members when an airline serves smaller cities and flies directly without any stops at the hub airport. This caused Southwest Airlines Cancellations which accelerated to a huge crisis. This was the only way for the airline to get back to its normal operations.
Even after this, Southwest Airlines failed to relocate its crew members and pilots after hefty flight cancellations.
Pilots and crews longed for assigned work. At some point, waiting lasted up to nine hours to connect with the operations center. These people spend the night at the airport with traveler’s bags as they have nowhere to go. Everything initially started small but accelerated to a snowball effect and Southwest could not control that. The airline admitted that the sudden pause of flights was caused by issues related to data connectivity caused due to failure in its firewall.
During this time, about 69.1% of the scheduled flight could depart on time. Whereas, others were delayed as per the U.S. Department of Transportation. Southwest Airlines was in a worst situation than any other carrier company. In addition, the company announced in January that the sudden failure cost the airline around $800 million by the fourth quarter. The passengers will face delayed flights even after Southwest resumed its services.
Southwest Airlines COO, Andrew Watterson made an apology before the U.S. Senate for the massive holiday meltdown that resulted in thousands of canceled flights and fed-up customers. The executive admitted they failed to manage the situation and promised to take bold action immediately. The airline learned from this event and focused on improving its management system. The airline prioritized enhancing its outdated software system and spent hundreds of million dollars in reimbursing the amount to its passengers.
Southwest had been going through a proper investigation by concerned authorities after the December winter meltdown. The U.S. Department of Transportation looking over Southwest Airlines, ensuring that all the passengers are fully reimbursed.
Fortunately, Southwest Airlines is now on the other side, focused on improving its software and learning from its mistakes. The airline faced its biggest crisis in past incidents. Finally, its passengers have forgiven the airline and made a comeback, showering Southwest with several bookings. They managed to record revenue since the winter breakdown. Due to heavy bookings in March, the airline recorded 22% revenue. The airline’s revenue increased to $5.7 billion which was way more than the previous year’s profits. High demand from passengers leads to an increase in fare tickets. Travelers were now paying 10% more to fly with Southwest Airlines which would be 12% more than tickets price in 2019 in the same period.
Southwest CEO Bob Jordan shared details in an interview with CNBC. He stated that the airline is now focused to prevent such situations from ever happening in the future. As per our research, we have listed the measurements that Southwest has taken to improve its system since the holiday meltdown: