Southwest’s Holiday Lesson for Other Airlines

Good morning from Skift. It’s Tuesday, January 3, and here’s what you need to know about the business of travel today.

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Episode Notes

Southwest Airlines capped off its 2022 with the unenviable distinction of cancelling more than 15,000 flights in total during the week of Christmas, the result of a system failure caused by several issues that were exacerbated by a nationwide winter storm.

Travel tech reporter Justin Dawes writes that it was an unmitigated disaster for the Dallas-based airline, with the story leading news sites and network TV news broadcasts day after day, a public relations disaster that showcased its deficiencies in keeping its technology up to date.

As the debacle was being scrutinized heavily in the media, the airline’s CEO, Bob Jordan, made several statements and appearances in an attempt to get ahead of the unfolding crisis and improve public perception.

Dawes writes that the primary reason for the major issue at Southwest was its outdated optimization technology, which the airline has outgrown over the past couple of decades. Company executives have admitted to prioritizing other things over investing in technology for operations, despite warnings from staff and some close calls previously.

The airline’s disaster over the holidays should serve as a reminder for other carriers to take stock of their operations to ensure nothing like this happens again, Dawes concludes, and when it comes to looking where to cut costs, leave the technology alone.

Next, the Obama administration approved U.S. educational and people-to-people travel to Cuba in 2015, but a U.S. federal judge in Florida last week ordered four major cruise lines to pay more than $400 million in damages plus legal fees to a U.S. company that ran the port in Havana until it was confiscated after the Cuban revolution of 1959.

Executive Editor Dennis Schaal writers that U.S. District Judge Beth Bloom in the Southern District of Florida ordered Carnival, MSC, Royal Caribbean and Norwegian to pay representatives of the American company, Havana Docks, more than $400 million in damages plus legal fees.

U.S. cruise ships in 2016 began traveling to Cuba for the first time in decades following a new cooperative agreement negotiated by Obama, lifting some restrictions of a U.S. embargo in place since the Cold War.

In 2019, the Trump administration ordered such cruises to cease, as part of efforts to pressure Cuba over its support of Venezuelan President Nicolas Maduro. Trump also permitted U.S. citizens to sue third parties for using property seized by Cuban authorities, part of the Helms-Burton Act that had been waived by every previous president since the law’s 1996 passage.

Expect the cruise lines to appeal, writes Schaal.

We end today with a further liberalization of regulations in Dubai to attract more tourists, this time scrapping the 30 percent municipality tax on alcohol.

Dubai is looking to position itself as a leading tourism destination in the Middle East in the face of increasing competition from destinations like Saudi Arabia and Qatar that are also looking at tourism as key to diversifying the economy.

Also, writes Asia Editor Peden Doma Bhutia, tourists and expats will no longer need to pay a fee to secure a personal liquor license to purchase alcoholic beverages.

Still, all alcohol sales will continue to attract a 5 percent value-added tax.