Southwest Airlines experienced a meltdown last week resulting in the cancellation of 70% of its flights. They’ve offered compensation but was it enough?
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Southwest Airlines’ Meltdown
What started during some incredibly bad weather turned worse for Southwest Airlines over the holiday period as labor issues and technology concerns bubbled to the surface. The Dallas, Texas-based carrier faced winter storms in its Denver hub but according to ground handlers and leaked memos, also had labor issues with ramp workers.
As the weather intensified throughout the country, the nation’s largest domestic carrier canceled thousands of flights as its technology failed to cope with pairing aircraft with flight-legal crews. To reset the system, Southwest dropped as much as 70% of its schedule stranding travelers in both departure and arrival cities during the busiest travel period on record.
Southwest has recovered but spent a week sorting out the catastrophe with passengers bearing the brunt of Southwest’s issues.
Compensation Offers
The airline’s contract of carriage and Department of Transportation regulations stipulate part of the company’s response to the situation. Southwest issued a statement that it would cover “reasonable” expenditures for stranded passengers but that process is lengthy.
Some opted not to wait for Southwest to send reimbursement or refunds to their tickets and rather than waiting, passengers enlisted legal counsel and sued the airline.
Most passengers with whom I spoke were offered $200 in flight vouchers per person, reimbursement, and a refund. The airline has since also sent out 25,000 Rapid Rewards points to many customers as a goodwill gesture.
Is It Enough?
As Matthew covered in a post last week, the compensation issues raise more concerns than they might at first seem. To start, for those who either needed to get home or wanted to continue their journeys, a refund is hardly enough to bring them even. When the cancellations first began, travelers flowed onto other carriers, but capacity was limited already, and flowing that much traffic onto the open market shot prices through the roof. Booking a $500 roundtrip to Mexico would run, $1,500, even $2,000 in coach for the last minute and subsequently oversold flights on other airlines.
In addition to refunding the travelers’ money, a $200 voucher for a future trip on Southwest hardly replaced the immediate need to return home or to take a trip during a narrow holiday window.
The question as to “reasonable” expenditures also comes into effect. One client of my travel agency was traveling to Nobu in Cabo San Lucas. Canceling the day of arrival resulted in more than $2,500 lost by the client as the hotel’s cancellation policy requires the guest to surrender the first night, but in this case, two. The couple wasn’t able to travel on Southwest or any carrier for a minimum of three days past their original arrival date truncating their weeklong trip by nearly half. Had they purchased those tickets at a cost of $1,300 each rather than the $500 they paid, would Southwest consider this reasonable? What about the refund at their expensive resort?
The couple didn’t go out and spend $300 at the airport bar turning in their receipt, which might not be reasonable, but they were out $2,500. Even with “Cancel For Any Reason” trip insurance, the pair would have surrendered almost the same with a standard 25% forfeiture in the policy.
As for the 25,000 Rapid Rewards points, that’s a nice touch but hardly enough. Sure, it will cover a replacement ticket for the passengers plus the $200 voucher – as long as they can book out months in advance when the traveler’s schedule allows again. But it wouldn’t have done anything for our customers during that week of uncertainty. It does nothing for their out-of-pocket expenses which the airline will undoubtedly dispute or limit.
For those with extremely flexible schedules, perhaps it indeed was enough. Some flyers may have chalked it up to bad luck for the airline that has always treated them well. Few flyers are likely to have real cash losses as sizable as this pair. But how many were simply trying to get home and either couldn’t or paid a king’s ransom to a competing carrier? How do a $200 voucher and points help them as they desperately try to get home?
From the outside, it might seem as though Southwest was generous in its compensation plan, exceeding requirements from the DoT. However, it’s the stockholders that will foot the bill ($350 million), the DoT is still investigating the matter for compliance issues, and many remain impaired by the issue.
Conclusion
Southwest Airlines has always been a solid operation that offered great customer service and has been fair with customers. But on this occasion, the failure was so great that even these measures don’t go far enough. The airline simply wouldn’t have been able to make their flyers whole who chose another carrier to get them to their destination. Some of the issues that contributed to the problem were solvable, such as labor relations (their pilots still don’t have a new contract three years after the last one expired), and technical issues that the airline has long known were overdue for an update. To me, it seems Southwest didn’t go far enough.
What do you think? Did Southwest Airlines do enough to resolve its meltdown last week? Were you affected?
Absolutely Not. Not even close.
Not to trivialize the impact on family holiday travel, but some of us travel for work and often on unavoidable tight schedules. Missing a day of work can have a huge financial impact for everyone- not just the traveler. And yes, I take that into consideration when I book my travel not just in terms of costs, but options for when things go sideways. This is why I never fly LUV
This is a big consideration for me too– one day in the wrong city can be very, very costly. For roughly the past 25 years, the vast majority of my domestic travel has been on Southwest. Given my flight patterns, I can’t really avoid them without doing things that don’t make a lot of sense. Generally speaking, my experience has been excellent in terms of reliability, but recently there have been some cracks that have emerged. I got caught up in the problems they had in October 2021 around fall break time, with no compensation. By random luck I avoided this holiday meltdown, but a pattern seems to be emerging that you really can’t rely on them around major travel times.
I can’t help but feel that we’re just not getting the whole story of what is going on with this.
Whatever it is that’s causing this, the golden goose at that airline looks very sick, and I will be booking my future travels accordingly
Wonder what they r doing about lost luggage. My niece’s flight was cancelled Christmas Day. For 3 days she tried to leave but never could on SWA. They assured her for 2 days her luggage had never left the airport but on the 3rd day they told her it was in San Diego. None of her cancelled flights had a stop in San Diego. She finally made it home on another airline. Jan 8th still no luggage.
She doesn’t want the miles or the credit toward another SWA flight since she doesn’t plan to fly them again. She just wants her luggage back.
They did more than enough already. You pay your money, you take your chances. No one died and SW certainly didn’t do this intentionally.
If you aren’t satisfied, move on and don’t use them again. Vote with your wallet, it’s that simple.
But stop expecting something for free every time something didn’t go your way.
Yes! Finally!
People hop on planes every day, millions of people on tens of thousands of planes. The system messes up once and people go into complete meltdown. It’s what travel insurance is for. Crap happens.
And Southwest will be just fine. Companies of this size often have to write off some huge loss for some reason or other. The market capitalization is 20.8 billion… they can absorb this.
There will be some people for whom the offered levels of compensation are enough. For example if your bags didn’t get lost and you rented a car and drove making it to your destination in time for your event what SWA is doing would likely be fine.
But let’s say your in the military and your burned a bunch of leave to try and have Christmas with your family before you deployed. But instead of having Christmas with your family you instead spent several days including Christmas in an airport trying desperately to make the holiday and were never able to get out. Now you’ve missed Christmas and spent most of your leave in an airport. How can SWA ever compensate you for that? Sure as heck 25,000 miles isn’t even going to be close.
My answer to your basic premise no I don’t think SWA’s compensation is adequate given the magnitude of what happened and the degree to which it was entirely foreseeable.
HNY, Kyle!
With the exception of the corporate shill dropping by to share pearls of wisdom, the reality of flying Southwest today is you’re paying a very similar price out of pocket, and should have the same expectations for delivering results and performance. While many of us who fly often/all the time hold SWA in a certain level of capability, leisure travelers don’t quite differentiate performance differences between the Big Four.
All that being said, this initial offer from SWA is pathetic. Travelers had real damages and suffered real financial losses, either via missing cruises, life events, losing booked resort stays, etc. The truly galling response from SWA was that they would reimburse “reasonable” out of pocket expenses, I guess they decide what’s reasonable…
They should have come out of the gate last week with “We screwed up, we know it, we know what’s wrong, and how to fix it. To you, the customer, we will fully reimburse your entire cost of airfare for all flights delayed over 8 hours, and whatever means you took to get to your destination, we’ll repay you in full for that, too. Finally, any costs that were accrued for lost opportunities for destination activities will also be reimbursed in full, just send the bill to gates@luvair.com“)
Easy peasy. Take the hit for the quarter, fix your effed up systems, get the pilots on contract and become a legit full line carrier!
Our family of 10 got caught up in this mess with a 26 Dec week-long trip to LIR. We had a non-cancellable rental house at $1700+ per night so decided to double down and find multiple flights to SJO and LIR that would get us all there about 48 days later. SWA could not get us there until after we were scheduled to leave. So we dropped over $15k on new tickets plus hotels/rental cars. Add on the $3400 from the house and it’s getting close to $20k. Working through SWA and cc travel insurance to see what we will be able to recover. So, we will certainly be testing out what SWA considers to be “reasonable”.
Will be interested to see if any of SWA’s senior leaders elect to “pursue other opportunities,” following this mess.
I hold SW fully accountable. The other airlines (both major and minor) bounced back far quicker than SW. if I had needed to rent a car or pay an outrageous amount for a substitute flight, I would have expected full reimbursement.
Fortunately for me, I only had a 6 hour delay on my out bound flight with AA for Xmas. Upon my return, I encountered a crush of SW PAX trying to get home. Not a happy Xmas for them!!
The funny thing is that no executive at SW will be held accountable. Each will get their additional block of stock options and quarterly bonus as if nothing happen. I LUV American capitalism.