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At Southwest Airlines, restart on track as it works to make amends – The Washington Post


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Southwest Airlines appeared to have righted its operations this week while seeking to make amends to customers caught in a holiday meltdown that a key lawmaker said Wednesday will be the focus of congressional hearings.

The carrier announced its latest overture Tuesday, offering 25,000 bonus points — the equivalent of more than $300 — for travelers whose flights were canceled or significantly delayed between Dec. 24 and Jan. 2 and who opted not to rebook their flight. It comes on top of reimbursements for expenses that customers incurred as they sought alternate modes of transportation as more than 15,000 Southwest flights were canceled.

The initial problems and subsequent redress for passengers also have drawn fresh attention from the Biden administration and lawmakers.

Southwest offers 25,000 points to passengers stranded by meltdown

The new compensation is the Dallas-based carrier’s latest attempt to appease travelers after a fierce winter storm, compounded by outdated computer systems, left tens of thousands of passengers, crew members and planes stranded at airports across the country before Christmas. As other carriers resumed more normal schedules, Southwest was hobbled by an unprecedented internal breakdown of scheduling technology, struggling to reboot operations while wreaking havoc on customers’ holiday plans.

Wednesday was the airline’s sixth day of operating at a near-normal schedule, although it followed a separate disruption Tuesday that slowed thousands of passengers. The carrier was forced to halt departures after a third-party vendor, IBM, experienced a brief outage in its service that provides weather data to Southwest — a problem blamed in many of the 39 percent of Southwest departures that were delayed that day, according to the flight-tracking website FlightAware.com.

Despite the setback, the carrier said this week that it was pleased with the progress is it making to restore customer confidence.

“The lessons of the final week of 2022, and the Heart of our People for serving our Customers and each other will guide a multifaceted plan to win back trust and repair relationships with those who count on Southwest to come through,” Southwest said in a statement.

The airline has declined to say how many customers were affected or how much the disruption might cost.

Andrew G. Didora, an aviation analyst with BofA Global Research, estimated the price tag to the company at between $600 million and $700 million in lost revenue and higher costs. Even so, Savanthi Syth, an analyst with the investment bank Raymond James Financial, said she still expects the carrier to eek out a small profit when it reports earnings later this month.

What to know about Southwest refunds, rebooking and lost luggage

The airline industry already was under scrutiny after a bumpy spring and summer that saw thousands of cancellations, but airlines said they were prepared for a strong ending to the year after hiring tens of thousands of employees. Thanksgiving was relatively trouble-free for the industry, but Southwest’s meltdown has renewed criticism, drawing rebukes from President Biden and Transportation Secretary Pete Buttigieg amid calls for accountability.

Sen. Maria Cantwell (D-Wash.), chair of the Commerce, Science and Transportation Committee, announced Wednesday that the committee will hold hearings to examine Southwest’s operational breakdown.

“Southwest’s customers are rightfully dissatisfied and deserve better,” she said in a statement. “These consumers need refunds and reimbursements for their expenses.”

Cantwell said she has spoken to Buttigieg and Southwest CEO Bob Jordan about her concerns, adding that the hearings, to be conducted as part of a Federal Aviation Administration budget reauthorization process, will examine how to strengthen consumer protections and airline operations.

In a letter to Jordan last week, Buttigieg said his agency expects Southwest to compensate passengers for travel that was canceled between Christmas Eve and Jan. 2. He said federal officials also expect Southwest to reimburse passengers up to $3,800 for baggage-related damage or delays.

At least one traveler turned to the courts for relief while proposing a class-action suit. Eric F. Capdeville, of Marrero, La., filed a lawsuit in New Orleans federal court that accuses the carrier of a breach of contract for failing to provide passengers with other flights or quick refunds. The lawsuit proposes that anyone similarly affected after Dec. 24 join the case.

Southwest Airlines faces lawsuit after mass cancellations

Jordan offered his apology for the flight disruptions in an email Tuesday accompanying Southwest’s announcement of bonus travel points.

“I know that no amount of apologies can undo your experience,” he wrote, adding that processes for refunds, reimbursements and lost baggage recovery were being “handled with great urgency.”

Still, Southwest’s latest attempt at financial compensation for customers drew criticism from at least one lawmaker, who declared that “half-measures like these won’t fly.”

On Wednesday, Sen. Edward J. Markey (D-Mass.) tweeted: “For travelers who understandably will never fly Southwest again, these points are useless.” He noted that the carrier recently became the first to announce it would resume paying quarterly dividends to shareholders, a practice that was halted early in the pandemic.

As part of the federal coronavirus relief package, airlines had been prohibited from paying dividends or buying back their shares. The ban expired in September.

Buttigieg has reminded the carrier of its obligations to customers. Consumer advocates also are urging Buttigieg to take a stronger stance in overseeing the industry.

Airline industry analysts also are closely watching the carrier’s actions. Charla Griffy-Brown, a professor of information systems technology management at Pepperdine University, said Southwest must go beyond what customers expect to win them back, and could possibly increase loyalty among some passengers.

“This is the thing: You’re not aiming for customer satisfaction, you’re aiming for customer delight,” she said. “I know from other examples in hospitality, if your remedy for a problem goes beyond customer expectations, you can create enhanced customer loyalty, but the correction has to go above and beyond.”

Southwest Airlines returns to normal operations as investigations loom

Dean Headley, co-author of the Airline Quality Rating published by Wichita State University, said he thinks Southwest will be able to win back travelers because of its culture, which focuses on helping customers. He noted that during the first year of the pandemic, the carrier was among the quickest at providing refunds to customers who canceled flights.

“It’s their attitude,” he said. “If there’s a problem with their customer base, they’ll fix it and fix it as soon as they possibly can.”

Headley said Buttigieg has been more involved than previous transportation secretaries in demanding accountability from the industry, but whether that will yield results is unclear.

He said Southwest’s troubles could ultimately benefit travelers across the industry as airlines look to avoid another Southwest-style meltdown.

“If there’s a spillover affect, it’s that airlines will learn from Southwest’s major toe-stubbing,” Headley said.





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