Southwest Says It Screwed Up

Good morning from Skift. It’s Friday, February 10. Here’s what you need to know about the business of travel today.

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Episode Notes

Southwest Airlines Chief Operating Officer Andrew Watterson was grilled by U.S. senators on Thursday about the carrier’s holiday season meltdown that saw it cancel nearly 17,000 flights. Watterson admitted the company screwed up, reports Edward Russell, editor of Airline Weekly, a Skift brand.

Watterson said at a U.S. Senate hearing that the root cause of the fiasco was a nationwide winter storm, acknowledging that Southwest hadn’t sufficiently prepared for severe weather. He added that the Dallas-based carrier would take significant steps to improve its winter operations. Southwest plans to invest $1.3 billion in technology this year.

However, Russell writes that senators didn’t appear satisfied with Watterson’s explanations, with politicians on both sides of the aisle calling out Southwest. One senator said it was absolutely unacceptable the company knew about its operational shortcomings before its meltdown.

Next, Hilton reported a surge in revenue during its fourth quarter earnings call on Thursday. But the company believes pent-up demand for travel will likely plateau in 2023, writes Senior Hospitality Editor Sean O’Neill.

Hilton saw that its system-wide revenue per available room — a key hotel industry metric — rose more than 7 percent from the same period in 2019. That’s the second consecutive quarter the figure surpassed pre-Covid levels. But CEO Christopher Nassetta acknowledged Hilton’s recovery might slow down in 2023. O’Neill cited a report that said Americans will have spent about two-thirds of their pandemic-era savings by the end of this year.

Finally, American Express announced on Thursday it’s teaming up with Microsoft to develop a new expense tool incorporating artificial intelligence technology. That platform could simplify filing expenses for business travelers, reports Corporate Travel Editor Matthew Parsons.

Parsons writes that American Express will incorporate the new platform in Microsoft’s internal expense system before offering it to other corporate clients. American Express is the part-owner of corporate travel agency American Express Global Business Travel. Parsons adds the push to increase comes as a growing number of corporate travelers have expressed frustration about filing expense reports.

American Express joins corporate travel agency Navan in adopting Microsoft’s artificial intelligence technology. However, an executive at expensive platform Expensify said it’s uncertain if the new tool will be groundbreaking, citing the challenges presented by Generative AI. Generative AI — a sector that includes the creation of images, audio and video — has made waves in the business world recently.