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Firm Hired to Assess Southwest’s Meltdown

Business

Southwest Airlines | Image by RaksyBH

Southwest Airlines Co. has hired an outside consulting firm to comprehensively assess the carrier’s year-end meltdown and post-recovery efforts to recapture customer loyalty and prevent future incidences.

Southwest Airlines contracted New York-based management consulting firm Oliver Wyman to perform the comprehensive assessment.

As part of Wyman’s consulting duties, the firm will conduct a town hall meeting on January 30 to pinpoint and discuss the mechanisms that spurred Southwest’s end-of-the-year meltdown.

Southwest’s operational meltdown was so disruptive to holiday travelers that the U.S. Department of Transportation (USDOT) had to step in.

“USDOT is concerned by Southwest’s unacceptable rate of cancellations and delays & reports of lack of prompt customer service. The Department will examine whether cancellations were controllable and if Southwest is complying with its customer service plan,” USDOT tweeted.

Transportation Secretary Pete Buttigieg also criticized Southwest over its holiday meltdown, calling Southwest’s handling of the situation “unacceptable.”

New York State Comptroller Thomas DiNapoli also voiced frustration with the airline over its operational performance.

In a bid to turn things around, in addition to hiring Wyman as an outside consultant, Southwest also appointed an “Operations Review Committee” to guide management’s ongoing recovery efforts.

One of Southwest’s more recent efforts includes giving bonuses to several of the airline’s operational workgroups, including $45 million in “gratitude pay” to 10,000 pilots, according to Brandy King, a spokesperson for Southwest.

Members of Southwest’s C-suite are expected to attend the January 30 town hall meeting, including Chief Executive Officer Bob Jordan, Chief Commercial Officer Ryan Green, and Chief Sales Officer Dave Harvey.

According to Jordan, Southwest has returned nearly all bags, processed almost all refunds, and provided eligible customers with 25,000 Rapid Rewards points as a “gesture of goodwill” following the inconvenience suffered by its passengers during the Christmas-New Year’s travel period.

“Emerging from some of the most challenging days in our Company’s history, we are highly focused on our customers, our recovery, and our plan going forward,” Jordan said.

“Our immediate task has been to stabilize our operation, and we are pleased to report that since the disruptions, we’ve operated our expected flight schedule.”

The report on Wyman’s assessment will not be released until a full investigation and analysis have been completed. In the meantime, Southwest said it had taken several steps to improve operational efficiencies, including:

  • Hiring extra operational staff members who can rapidly mobilize during crew recovery efforts.
  • Enhancing technology to efficiently communicate with large numbers of crew members during frequent schedule changes.
  • Updating and upgrading the airline’s crew recovery system to streamline current and future schedules and allow for optimizing established schedules as they are revised during irregular operations.

According to Jordan, the airline’s recent disruption accelerated its plans to enhance business processes and technologies with the ultimate goal of improving the customer experience.

Southwest’s disastrous holiday meltdown is expected to cost the company $725 million to $825 million in losses during the fourth quarter.

The company reports its fourth-quarter and full-year 2022 earnings on January 26. Southwest Airlines Co.’s stock price (NYSC: LUV) was down about 1% as of trading on Monday.

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E H
E H
5 days ago

Southwest hires a firm based in NEW YORK? They are running the State of New York and New York City right into the ground! What will they possibly be able to offer that Southwest couldn’t get from a more Conservative area of the country away from the Liberal coasts where things are actually being run well?

Karen
Karen
5 days ago

This is good news. As a loyal SWA customer and SWA retiree, I have hope that they will turn things around. SWA has always led the charge in innovative ideas. They need to get back to that can do spirit that Herb always exemplified.