After massive system failures at Southwest affected nearly 1 million passengers over the holidays, the airline is attempting to salvage its reputation.
- Southwest CEO Bob Jordan has been making a series of apologies to customers who had flights canceled and luggage lost during the systems failure that happened over the holidays.
- The airline’s schedules are back in order and operating smoothly again, but Southwest will need to regain the trust of its customers.
- In emails and notifications, Jordan has informed customers of how quickly changes are being made and how many refunds have been issued. Nearly all the refunds are completed.
- Jordan has met with lawmakers and spoken to media outlets to explain what changes the company will implement to ensure the holiday fiasco never happens again.
- This new focus on open and clear communication is happening within and without the company, Southwest says.
- “Southwest will navigate this operationally, and communications will complement that progress from a narrative standpoint. We can refresh and rebuild that trust among our various stakeholders by being transparent and plain-spoken in terms of what we have learned and by showing tangible results of what we will do differently as a result,” Chief Communications Officer Linda Rutherford told Axios.
Why it’s news
Focusing on clear communication with customers and stakeholders is only part of the solution to Southwest’s problem. The company needs a major IT systems update to prevent a repeat of the holiday disaster.
In a message to frequent flyer customers, Jordan announced that nearly $1 billion was being set aside for the needed system upgrades. This hefty investment comes in addition to the estimated $825 million the airline lost during the flight cancellations.
Along with system upgrades, Southwest has hired transportation consulting firm Oliver Wyman to evaluate what went wrong with the current system and what the company can do in the future to prevent it.
During the 10-day debacle, Southwest reported that approximately 17,000 flights were canceled—that’s nearly $425 million in lost revenue. In addition to losing revenue, the company also had to shell out millions to cover the cost of hotel stays, meals, and reimbursements for stranded customers.
Southwest could face even greater losses if U.S. officials choose to issue a fine, though there is still no official word if this will happen.
After the airline debacle, 26 House Democrats wrote a letter to Transportation Secretary Pete Buttigieg asking him to use his authority to penalize Southwest.
“Unless immediate action is taken, the rising threat of mass flight cancellations risks jeopardizing Americans’ confidence in the reliability of our nation’s air transportation network,” the legislators wrote.