Southwest Still Dealing with Holiday Fallout


Southwest Airlines Ticket Counter | Image by Kit Leong/Shutterstock

Southwest Airlines is still working to process refunds and return luggage more than half a month after its catastrophic holiday season meltdown.

The company’s end-of-the-year operations failure resulted in thousands of disrupted flights over the busy Christmas and New Year travel period. This ignited a major backlash from passengers and public officials, who viewed the travel disruptions as unacceptable.

More than three weeks after the fiasco, the Dallas-based carrier is still managing the fallout, processing reimbursements, returning luggage, and working to repair its public image.

So far, Southwest Airlines has processed about 90% of customer refunds and returned roughly 98-99% of bags, according to company CEO Bob Jordan, speaking with The Dallas Morning News.

Most customer requests for reimbursement are being processed using an automated program, which Jordan said can process a refund in about three days — four days fewer than the U.S. Department of Transportation requires.

Southwest also partnered with PayPal to help push out the remaining refunds.

When a receipt is submitted to Southwest’s website for reimbursements, users are redirected to a PayPal-based service called Hyperwallet, which generates a unique customer ID granting electronic access to user funds.

“Reasonable requests for reimbursement for meals, hotel accommodations, and alternate transportation (e.g., rental cars and tickets on other airlines) were honored.

“Any other request such as lost wages, credit card interest, expenses requested with handwritten receipts, etc., were not honored,” Southwest said in an email to customers, explaining which refund requests were being processed.

While most luggage has been returned to customers, a small percentage is still missing, according to Jordan. He explained that the remaining bags lack identifiable tags, which has made returning them more challenging.

In terms of customer reimbursements, Jordan said, “We’re absolutely leaning into our customers on alternative flights, rental cars, hotel rooms, all the things that you would expect.”

“We mobilized an army here at Southwest as well as a third party,” he said. “We have upwards of 3,000 people working on reimbursements” and should be finished with requests “in a few weeks.”

It is unclear what lasting damage Southwest did to its reputation over the incident. Still, Jordan said he accepts responsibility for the failure and hopes to win back customers’ loyalty.

“We messed up for our customers, and we messed up for our employees,” Jordan said. “It’s a big deal. We need to do everything we can to mitigate the risk of this ever happening again.”

In the meantime, Jordan said Southwest “will not let up until [it] has responded to every impacted customer.”

Southwest’s stock price (NYSC: LUV) has pushed higher since the meltdown, increasing to $36.99 on Friday from its mid-December low of $32.19.

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20 days ago

Southwest is an awesome airline with a long legacy of doing the right thing – this was unfortunate, but I firmly believe this too shall pass. Kudos to the CEO and his team for owning the problem.