Top Senate Democrats urge Southwest CEO to get answers on vacation slump

Southwest Airlines Executive Vice President Bob Jordan speaks as he is interviewed by CNBC outside the New York Stock Exchange (NYSE) in New York, U.S., December 9, 2021.

Brendan McDermid | Reuters

Fifteen senators, including Bernie Sanders, Elizabeth Warren and Cory Booker, sent a letter to South West Airlines CEO Bob Jordan demanded answers on Friday about the airline’s handling of holiday travel disruptions in 2022, which left thousands of passengers stranded at airports.

Questions push for details about the causes of the collapse, including Southwest’s overloaded crew-scheduling software that got out of whack from all the flight changes. The mass cancellations have been accompanied by harsh winter conditions in the United States and increased demand for holiday travel, which has forced American airlines to cancel thousands of flights.

As other airlines recovered from the storm, Southwest’s problems worsened. It has canceled much of its schedule in an attempt to reset its operation, spoiling travel plans for hundreds of thousands of customers.

“Although winter storm Elliott disrupted flights across the country, all other airlines operating in the United States managed to return to a regular flight schedule soon after – except Southwest,” the letter said.

The airline canceled nearly 17,000 flights between Christmas Eve and New Year’s Eve. The company projected the collapse would cost it between $725 million and $825 million in the fourth quarter.

“We appreciate the concerns expressed in the senators’ letter and share the commitment to ensure that Southwest customers are properly taken care of and steps are taken to mitigate the risk of this happening again,” Southwest said in a statement. a statement. “We hope the recent refunds, expense reimbursements and goodwill gestures to our customers and employees demonstrate that we want to go above and beyond to earn their trust again.”

The senators also asked the airline for details on compensation for passengers affected by ticket refunds, the return of lost baggage and refunds for other travel arrangements made as a result of the South West cancellations.

Southwest is still reviewing refund requests and refunds from affected customers.

The senators’ letter also highlights Southwest’s use of funds, saying it neglected to update company-wide systems that have long been outdated.

“Southwest has long known that its software is outdated, and the Southwest Airlines Pilots Association had warned that such a debacle was inevitable unless Southwest invested in new scheduling systems,” the letter said. “Instead of making these investments, Southwest distributed more than $1.8 billion in dividends to its shareholders and repurchased more than $11 billion of its stock between 2011 and 2020.”

Sanders previously denounced Southwest on Twitter for its “corporate greed”, noting that the airline used $5.6 billion of its $7 billion in Covid relief for stock buybacks for shareholders rather than to invest in its internal infrastructure.

The senators are giving Jordan until Feb. 2 to answer their questions.

Sen. Maria Cantwell, D-Wash., Chair of the Senate Commerce Committee, has already announced plans to hold a hearing on the Southwest collapse.

– CNBC’s Leslie Josephs contributed to this report.

Leave a Comment