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Key Senate Democrats push Southwest CEO for answers on holiday meltdown

Key Senate Democrats push Southwest CEO for answers on holiday meltdown

Southwest Airlines Executive Vice President 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.

Brendan McDermid | Reuters

Fifteen senators, including Bernie Sanders, Elizabeth Warren and Cory Booker, sent a letter to Southwest Airlines CEO Bob Jordan this week demanding answers about the airline’s management of 2022 holiday travel disruptions, which left thousands of passengers stranded in airports.

The questions push for details about the causes of the meltdown, including Southwest’s overloaded crew scheduling software that buckled from all the flight changes. The mass cancellations came alongside severe winter weather across the U.S. and elevated holiday travel demand, which forced U.S. airlines to cancel thousands of flights.

When other airlines recovered from the storm, Southwest’s problems got worse. It canceled much of its schedule to try to reset its operation, spoiling the travel plans of hundreds of thousands of customers.

“Although winter storm Elliott disrupted flights across the country, every other airline operating in the United States managed to return to a regular flight schedule shortly thereafter — except Southwest,” the letter sent Thursday reads.

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

“We appreciate the concerns expressed in the letter from the Senators 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,” Southwest said in a statement. “We hope the recent refunds, reimbursements of expenses, and goodwill gestures to our Customers and Employees demonstrate that we want to go above and beyond in earning their trust once again.”

The senators also asked the airline for details on compensating affected passengers via ticket refunds, returning lost baggage and reimbursements for alternate travel arrangements made in the wake of Southwest cancellations.

Southwest is still in the process of reviewing requests for reimbursement and refunds from impacted customers.

The senators’ letter also highlights Southwest’s use of funds, claiming it neglected to update companywide systems that have long been out of date.

“Southwest has long known that its software was outdated, and the Southwest Airlines Pilots Association had warned that such a debacle was inevitable unless Southwest invested in new scheduling systems,” the letter says. “Instead of making those investments, Southwest distributed over $1.8 billion in dividends to its shareholders and bought back over $11 billion in its shares between 2011 and 2020.”

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

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

Sen. Maria Cantwell, D-Wash., chair of the Senate Commerce Committee, has already said she plans to hold a hearing on Southwest’s meltdown.

— CNBC’s Leslie Josephs contributed to this report.

Correction: The senators sent the letter to Southwest on Thursday. An earlier version misstated the day.

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Written by Susan Bellini