By being under intense public scrutiny by the U.S. Senate and the Transportation Department, Southwest's estimate of a quarterly profit hit of $825 million from the meltdown now seems low.
A group of 15 U.S. senators on Friday demanded Southwest Airlines Chief Executive Bob Jordan answer questions about the low-cost carrier’s holiday meltdown that led to nearly 16,000 flight cancellations.
“The airline must examine the causes of this disaster and ensure it never happens again,” said the letter led by Democratic Senators Ed Markey and Richard Blumenthal asking for answers about the software it uses for crew scheduling and why did the company “fail to invest funds to modernize these systems to ensure that it could effectively coordinate crew and flight schedules after major storms and during major travel periods?”
The senators, including Banking Committee Chair Sherrod Brown, Foreign Relations Chair Bob Menendez, Finance Committee Chair Ron Wyden and Budget Committee Chair Bernie Sanders, asked for details the total number of refunds requested and expenses reimbursed.
Southwest said Friday it appreciated the senators concerns “and share in the commitment to ensuring Southwest’s customers are properly cared for and that actions are taken to mitigate risks of this happening again.”
Commerce Committee Chair Maria Cantwell earlier this week pledged to investigate the meltdown.
The U.S. Transportation Department is forwarding thousands of Southwest consumer complaints as part of its ongoing investigation. Transportation Secretary Pete Buttigieg, who met virtually with Jordan on Jan. 6, has repeatedly vowed to hold Southwest accountable if it fails to adhere to the promises made to reimburse passengers.
Southwest has warned it would take a quarterly profit hit of as much as $825 million because of the meltdown.
Jordan told Reuters on Thursday the airline is looking at all options to ensure the operational meltdown it suffered last month is not repeated and hired consultancy Oliver Wyman to investigate the disruption, Jordan told Reuters in an interview.
Southwest’s board has set up a new Operations Review Committee to oversee management following last month’s systems collapse, Jordan said. General Electric Co is updating the company’s software which will automate its crew scheduling systems, he said.
(Reporting by David Shepardson; Editing by Chizu Nomiyama and Diane Craft)
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Photo credit: Senate demands answers from Southwest about the holiday meltdown. Miguel Ángel Sanz / Unsplash