The United States Department of Transportation (DOT) has initiated an investigation into the Southwest Airlines operational meltdown in December.
The DOT is currently evaluating whether management at the low-cost airline “engaged in unrealistic scheduling of flights which under federal law is considered an unfair and deceptive practice,” according to a department statement seen by Los Angeles Times on January 26, 2023.
The department outlined the investigation is in “the initial phase”.
The DOT also warned it will “leverage the full extent of its investigative and enforcement power” to protect airline passengers if the air carrier fails to refund air travelers’ expenses as per the US federal law.
What happened with Southwest Airlines during the holiday period?
The low-cost carrier faced operational difficulties due to a massive winter storm in the United States during the Christmas week between December 21, and December 31, 2022.
The challenging weather conditions negatively affected Southwest Airlines’ operational systems, overloading internal flight scheduling platforms, which are crucial to match crews with the planned flights. Due to the fierce storm and staff shortages, the airline canceled more than 16,700 flights during the course of 10 days in December 2022.
The massive operational halt caught the attention of the US Department of Transportation (DOT), which said that Southwest was the only US carrier to cancel almost 3,000 flights the day after Christmas and called the disruptions “unacceptable”.
In an update to investors, Southwest Airlines indicated that it was now expecting a Q4 2022 loss, “driven by a preliminary estimated fourth quarter 2022 pre-tax negative impact in the range of $725 million to $825 million”.
The lost revenue is estimated to be between $400 and $425 million, while the remaining sum is estimated for travel expense reimbursements, the value of Rapid Rewards points, and premium pay and compensation for the airline’s employees.