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Southwest CEO says all options 'on the table' after carrier's meltdown, and vows responsibility

By Rajesh Kumar Singh CHICAGO (Reuters) -Southwest Airlines Co is looking at all options to ensure the operational meltdown it suffered last month is not repeated, Chief Executive...
Southwest CEO says all options 'on the table' after carrier's meltdown, and vows responsibility © Reuters. FILE PHOTO: Southwest Airlines' Bob Jordan speaks as he is interviewed by CNBC outside the New York Stock Exchange (NYSE) in New York City, U.S., December 9, 2021. REUTERS/Brendan McDermid/File Photo
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By Rajesh Kumar Singh

CHICAGO (Reuters) -Southwest Airlines Co is looking at all options to ensure the operational meltdown it suffered last month is not repeated, Chief Executive Bob Jordan said on Thursday.

The Dallas-based carrier has been dealing with customer outrage and regulatory scrutiny after a systems meltdown last month left thousands of passengers stranded.

Southwest has hired consultancy Oliver Wyman to investigate the disruption, Jordan told Reuters in an interview.

"I have put everything on the table here because it just can't happen again," he said.

A severe winter storm right before Christmas, coupled with Southwest's dated technology, led to the cancellation of more than 16,000 flights. The airline had long cultivated a reputation for reliable customer service, humorous flight crews and low-cost flights.

Southwest's board has set up a new Operations Review Committee to oversee management following last month's systems collapse, Jordan said.

Asked about his job security, he said: "I'm not focused on that one bit, and at the end of the day, that's not up to me in any case."

"There are a lot of reasons that this happened, but it's on me at the end of the day," Jordan said. "It's on me to not let this happen again and to rebuild trust with our employees and rebuild trust with our customers, and we will do exactly that."

Jordan, who took the airline's helm last February, is under pressure from investors to win over customers. To mollify them, the carrier has awarded customers affected by the meltdown 25,000 Rapid Rewards points, equivalent to more than $300, as a goodwill gesture, and has also launched a fare sale.

Jordan said New York-based Oliver Wyman is interviewing company staff and union members to reconstruct the recent debacle in order to identify gaps in the carrier's operations.

Meanwhile, the company has put in interim measures to avoid a repeat, he said. General Electric (NYSE:GE) Co is updating the company's software, which will automate its crew scheduling systems, he said.

GE said the current software Southwest uses "performed as designed" during the problems last month. "We are working with them to define new functionality as they improve their crew rescheduling capability,” it said in a statement.

Southwest has also put together a new team of trained employees who can be cross-utilized to manage rescheduling crew during a disruption that requires significant schedule changes. Jordan said the company activated this group during the Federal Aviation Administration nationwide ground stop on Wednesday.

The airline is processing tens of thousands of customer reimbursements a day, he added. With the exception of 1% of bags, the airline has delivered to customer all the luggage that went missing.

Jordan defended the airline's point-to-point business model, which allows customers to fly directly from smaller cities without having to stop and change planes at major hubs like Chicago and New York. He said last month's disruption was not due to the structure, but said the airline could set up more crew bases if Oliver Wyman recommends that.

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06-02-2023 09:27:41 (UTC+7)

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    EUR/USD 1.0789 Sell  
    GBP/USD 1.2049 ↑ Buy  
    USD/JPY 132.27 Neutral  
    AUD/USD 0.6919 Buy  
    USD/CAD 1.3407 ↑ Buy  
    EUR/JPY 142.71 Buy  
    EUR/CHF 0.9995 ↑ Sell  
    Gold 1,887.70 ↑ Buy  
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    Lufthansa 9.902 ↑ Sell  
    Siemens AG 145.02 ↑ Sell  
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