Southwest Airlines is expecting to have a happy holiday season, even as it shakes off the memory of last year’s operational collapse.
Holiday bookings are up for Southwest as the Dallas-based carrier said it has bounced back from an operational meltdown last winter that led to thousands of cancellations and delays.
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Andrew Watterson, Southwest’s chief operating officer, said in a call with analysts Wednesday afternoon that the carrier has taken multiple steps to ensure a similar operational meltdown does not happen again during the holiday travel season.
“Preparing to prevent something like that from happening again was, and is, an imperative,” Watterson said on the call.
Last winter, blizzards swept over parts of the U.S. as travelers were flying for the holidays, and Southwest’s operation collapsed. Other airlines were able to quickly pick up operations following the storm, but Southwest had instead canceled flights for days, leaving millions stranded. Many factors led to the widespread operational meltdown, ranging from dated infrastructure to mismanaged crews.
The incident brought intense scrutiny onto Southwest, leading to a Senate hearing and a U.S. Department of Transportation investigation into the carrier’s scheduling practices.
Beyond the public scrutiny, Southwest also suffered major financial losses in the aftermath, reporting that the meltdown cost it $800 million in pre-tax income during its first-quarter earnings call in January.
For the most part, Southwest took an apologetic stance on the meltdown.
At the time of the fiasco, much of the conversation centered around Southwest’s antiquated technology. However, during Thursday’s call, Watterson argued that the root issue lay more in its operations rather than technology. Specifically, Watterson pointed to Southwest’s initiatives to better coordinate its crews and invest more in de-icing equipment.
Watterson added that the carrier had conducted tabletop planning exercises with its staff involving winter weather scenarios to prepare for the season; he also said it has created a special operating group called the “network disruption pod” to lead decision-making in what Watterson called “high-risk disruption events.”
That operating group — which was formed partly by moving the network planning and operations teams under the same umbrella in order to coordinate decision-making — had already successfully mitigated potential disruptions during the summer travel period, Watterson said.
“We’re so better than ever and so confident as we go into the holiday winter holiday travel season,” Watterson said on the call.
It does not seem like last year’s operational meltdown has swayed travelers away from Southwest when it comes to holiday travel. In fact, Southwest executives said holiday bookings were even stronger this year compared to the last.
“If you look at where we sit today, versus last year, at this point in the curve for the December holiday period specifically, we’re booked ahead, which I think is a vote of confidence,” Ryan Green, Southwest’s chief commercial officer, said. “Customers are beyond our operational disruption, and we’re not suffering any sort of demand weakness for the December holiday period.”
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