Vowing to avoid a repeat of catastrophic holiday delays that stranded thousands of passengers last year, Southwest Airlines Co.’s leader said the company was “absolutely ready” for an impending travel crush.
The carrier has overhauled its operations since then, according to Chief Executive Officer Bob Jordan, from added workers and improved training to new cold-weather equipment and revamped technology.
The stakes for Southwest are high. Last December’s crisis, when its systems were overwhelmed by a storm over multiple days, cost the Dallas-based company nearly $1.2 billion. It also drew intense scrutiny from lawmakers, regulators and passengers, and led the airline to cut executives’ pay.
“It was an ugly week,” Jordan said. “But that week does not define Southwest Airlines.”
The CEO has acknowledged short-term reputational damage following the meltdown, but he said that there was “no indication” that customers continue to avoid Southwest.
The company earlier Wednesday said leisure demand “remains strong” going into the year-end holidays and certain business bookings have been at the higher end of its expectations in November and December. It raised the low end of its revenue forecast for the fourth quarter.
More than 39 million people are expected to travel by air Dec. 20 through Jan. 2, according to Airlines for America, the lobbying group for major US carriers. The number of daily passengers will increase 16% from a year ago, with 3 million traveling on the busiest days, the group said Dec. 10.
New Workers, Technology
Following last year’s disruption, Southwest completed some projects like adding de-icing trucks, training new workers and updating airport infrastructure by a self-imposed deadline of October. Other changes include updating technology used for crew scheduling and communications, realigning network planning with its operations control center and improving early warning systems for potential disruptions.
The carrier created a “disruption pod” of company leaders and other workers to respond to unexpected or sudden problems, such as snow storms or hurricanes. New software developed at Southwest will coordinate changes to aircraft and flight crew schedules during disruptions. The separation of planes from pilots and flight attendants was a major issue last year.
Southwest performed well in an early test, Jordan said, after eight inches of snow fell recently in Denver. Of 4,000 scheduled flights that day, just seven were canceled nationwide, he said.
Slow Business Return
While leisure travelers have swarmed back since the pandemic, trips by businesses remain below 2019, a slower recovery than Southwest has expected. It’s stuck at about 80% of pre-pandemic levels and could hold there for as much as five years, Jordan said, based on the recovery after the terrorist attacks of Sept. 11, 2001.
That’s led Southwest to plan changes next year, including trimming short-haul routes that normally appeal to business travelers to about 37% of flights from 41%, reducing trips before 6 a.m. or after 10 p.m. and shifting more capacity away from days when demand typically falls. One-day business trips remain out of favor and are still being replaced by video calls, Chief Operating Officer Andrew Watterson said.
Government agencies and education, travel, manufacturing and health care industries all have returned to travel, while consulting, banking and technology remain below 2019, he said.
