DALLAS — Summer travel, now just a couple weeks away, will be something of a test for Dallas-based Southwest Airlines, and maybe some vindication for CEO Bob Jordan, who took over 15 months ago.
The airline came to a halt last December; 16,000 flights cancelled around Christmas after winter weather overwhelmed Southwest’s operations across the country.
Then last month in April, a set of computer firewalls failed which delayed 1,700 flights on a random Tuesday.
What made it even more unusual is that it happened to an airline with a reputation for efficiency.
We landed a seat next to Southwest CEO Bob Jordan on a recent flight and had a number of questions for him.
WHITELY: People are asking what in the world is going on at Southwest?
BOB JORDAN: You know, the firewall issue is very unique. We have redundancy. We had a firewall that failed, and then its backup failed. We had a period of time where we want to make sure the systems are operational, systems were up and running properly, data was flowing. So, we did take a ground stop for a little less than an hour, but the good news is at the end of the day, we disrupted very, very few customers. 99.9% of our customers got to their destination. We don't underinvest in technology. We're putting $1.3 billion a year in technology. We already had a focus on modernizing our operation. We doubled down on that.
WHITELY: How confident are you that your customers will not see a repeat of the cancellations in December or the delays in April?
JORDAN: I'm very confident that we have plans in place to make sure that that does not happen. And those plans will all be accomplished by winter of 2023. Now, can you have other hiccups? If you look at the industry, hiccups happen regularly. We had the NOTAM [Notice to Air Missions] event that was a nationwide ground stop. I don't expect that to happen again. But no, we're positioning ourselves. There can't be a reoccurrence of what happened in December. There cannot.
In December, Southwest just was not ready for the weather -- especially in Denver, where it has the most daily departures. Southwest did not have enough deicing trucks, deicing pads, and engine covers.
The problem is, those are tangible tools that other airlines already had, keeping many of them in the air.
The problems began to cascade for Southwest at its other airports, as well.
Southwest pilots soon ran out of hours they could legally work in a day. That left planes out of place and soon forced tough decisions inside the airline’s network operations control bunker in Dallas.
The only way to stop the issues was a complete reset of the system. So, airline executives made the decision to cancel 16,000 flights over the Christmas holiday, inconveniencing more than two-million passengers so Southwest could get planes back in place and restart its schedule.
WHITELY: I saw that almost half of your customers who were affected in December have since rebooked.
JORDAN: More than half.
WHITELY: More than half. Do you think you lost any customers?
JORDAN: We watch our bookings every single day. We watch our customer reputation scores and we took a hit in January and February. A lot of that was holiday travel where customers didn't take their outbound and therefore couldn't take the return. But March was really, really strong. Right now, there's no evidence that customers are booking away from us. We gave away over two-million gestures of goodwill, basically 25,000 Rapid Rewards points. Customers began booking them within minutes.
WHITELY: Did they really?
JORDAN: These are customers that we disrupted. And we've seen a record level of redemption of those literally within minutes. And we're seeing a record level of those gestures of goodwill book, which tells me our customers are sticking with us.
Southwest Airlines implemented a number of fixes underway to prevent another meltdown like it experienced in December.
In Denver, Southwest has almost doubled its deicing trucks – up to 22 now. It added a third more deicing pads there, as well.
Same in Chicago. Southwest now has 22 deicing trucks at Chicago Midway International Airport and the airline is trying to triple the number of deicing pads there.
Despite the investments, the problems from December are not yet behind Southwest yet.
WHITELY: The Department of Transportation has that open inquiry into what happened in December.
JORDAN: They do.
WHITELY: Have they talked to you personally about what happened?
JORDAN: We're cooperating with them fully like you would expect we always would. I have talked to the [U.S. Transportation] secretary a number of times just to update him on our progress and how we're doing. I updated him during the firewall disruption a couple of weeks ago.
WHITELY: Did you call the secretary or the secretary call you?
JORDAN: The secretary called and asked for an update, and I provided that. It was very cordial, just wanting to understand what was happening. That's not unexpected given the December issue. But no, we're working with the D.O.T. and cooperating and providing them everything that they're looking for.
The U.S. Department of Transportation is investigating whether Southwest Airlines scheduled more flights than it could operate during the holidays.
Southwest’s chief operating officer, Andrew Watterson, was also on the same flight as Jordan and revealed a little more context.
WHITELY: What do you expect to come from that D.O.T. investigation?
WATTERSON: Well, the D.O.T. has been investigating us since the disruption. They visit us numerous times. And so far, it seems like we've done everything correctly, by the book. And they've told us that when they visited that we reimbursed customers for their expenses. They had hotels, rental cars and stuff like that. We've refunded their ticket prices all within the guidelines and deadlines they give us. And so far, we've checked all the boxes, but they're still investigating. We'll see what they find.
WHITELY: Any idea when that might wrap up?
WATTERSON: Well, you never know. They can take all the time they need. And we welcome the scrutiny when you mess up, you expect the scrutiny, and we'll certainly address everything that comes around.
But several major news organizations reported that the U.S. Department of Justice also opened an investigation into Southwest's operational meltdown.
WHITELY: How about the U.S. Department of Justice? I didn't realize the D.O.J. was looking into this as well until a few weeks ago. I think a headline popped on that. How big of a deal is that?
JORDAN: It's a headline. To date, there's nothing from the D.O.J. We'll work with any government entity that we need to. But there's nothing going on with the D.O.J. Just the D.O.T.
The Department of Justice does not publicly reveal an ongoing investigation, but Jordan said Southwest has not been contacted by the D.O.J. officials to advise that it is the target of any investigation.
WHITELY: What keeps you up at night when you look towards the summer schedule?
JORDAN: I'm not nervous. We're as staffed as we have ever been. We're hiring still this year, mainly pilots. We're still short and pilot constrained, but we have as many employees per aircraft as we've ever had. And we were the first airline to get back to pre-COVID levels of staffing. So, that doesn't worry me. But, you know, you have things like [Air Traffic Control], just managing the traffic. That's probably the biggest issue.”
The FAA warns there is a shortage of controllers, especially in New York City and Washington, D.C. That could create delays for every airline.
But Jordan insists that Southwest is ready for the test that summer travel is about to bring.
The uncut version of the Bob Jordan and Andrew Watterson interviews are on a new episode of the Y’all-itics podcast. Click below to listen.