A storm that blanketed the nation in the days leading up to Christmas snarled airport traffic around the country. Tens of thousands of flights were cancelled and many more were delayed as travelers scrambled for any mode of alternate transportation. But no carrier was hit harder than Southwest Airlines, which dumped more than 16,000 flights between December 21 and New Year's Eve. Its financial, operational and customer-service struggles created the worst airline meltdown in memory. Millions of travelers were displaced and billions of dollars were lost. Here is how we've covered it. Read up from the bottom for context.
1/8/23, 4PM ET, SUNDAY
The Nation Freezes Up,
Southwest Melts Down
SOUTHWEST TRIES TO MAKE GOOD
It'll be months, perhaps years, before we know the full operational, financial, marketing and customer-service impact of Southwest Airlines' holiday meltdown, but the carrier is wasting little time trying to make good for its failures. Some of its most notable moves to win back passenger trust and good will:
Bonus points for all.
As a "gesture of good will," Southwest will award 25,000 Rapid Rewards points to every customer whose flights were cancelled between December 24 and January 2. That's atop the refund of the ticket price for the dumped flights and reimbursement for items such as hotel rooms, meals, rental cars or alternate flight arrangements. If you were caught up in the chaos and haven't yet received your bonus points--the offer comes via E-mail along with an apology from chief executive Bob Jordan--check with the airline. Jordan's letter also says Southwest is processing refunds and reimbursements "with great urgency."
More time to qualify for status.
If you were unable to reach status levels on Southwest due to the holiday collapse, Southwest is reacting by allowing your January flying to count toward 2022 totals. In fact, January flying will do double duty at Rapid Rewards. Not only will the flights count toward 2022 status, but they also will count toward 2023 status levels.
Companion Passes extended.
If you held a Companion Pass valid through 2022, Southwest Airlines is adding another month to your perk. All Companion Passes due to expire in December, 2022, will be valid for free companion tickets through this month.
1/8/23, 3PM ET, SUNDAY
THE (OFFICIAL) HIGH COST OF SOUTHWEST'S MELTDOWN
Southwest is now filing financial documents with the Securities and Exchange Commission and it turns out my estimates (see below) were surprisingly close to the mark. According to a Form 8-K filed Friday, Southwest says it cancelled 16,700 flights between December 21 and 31. The revenue lost from cancelled flights in that period? Between $400 and $425 million. Adding in other related costs--estimated travel expense reimbursements for customers, the value of Rapid Rewards points offered (and redeemed) as a make-good to affected flyers and premium pay and additional compensation for employees--the total negative impact on Southwest's fourth-quarter earnings will be in the $725-$825 million range. That'll tip the airline into the red for the quarter.
1/5/23, 2PM ET, THURSDAY
IT'S A WONDERFUL LIFE, BUFFALO AIRPORT EDITION
The brutal storm that dumped several feet of snow on Buffalo also paralyzed Buffalo Niagara International Airport. It was closed for days. But dozens of flyers were stranded without food or other shelter. Dozens more were brought to the airport after being rescued from stranded cars. How did the little makeshift community of about 200 people survive given that the city's roads were closed and nothing was getting into the airport by air or by ground? Employees of the airport concessionaires, Delaware North, pooled the available food and beverage resources from all of the restaurants and they fed the people there for several days. All at no charge. Delaware North employees even rounded up some makeshift toys and gifts for children sheltering over Christmas at a nearby firehouse. The heartening tale of creative airport workers, a few volunteers and lots of "grab and go" sandwiches was detailed by The Washington Post
1/4/23, 9AM ET, WEDNESDAY
SOUTHWEST'S 2021 'BURNOUT' AND ITS HOLIDAY MELTDOWN
Business travelers lead hectic lives and have short memories and a grudging forebearance of airline collapses. So it's no surprise that many have forgotten that Southwest had a similar meltdown in the fall of 2021. Jon Ostrower, the former aviation writer for The Wall Street Journal
, last year offered up a solid postmortem on what he called Southwest's "burnout."
The analysis is usually behind a paywall at Ostrower's The Air Current
newsletter, but he's made it public now. Compare and contrast it to Alison Sider's analysis
of the airline's holiday woes in last week's The Wall Street Journal
1/3/23, 9AM ET, TUESDAY
A FLIGHT IN HAND IS WORTH MORE THAN $24,000 IN DELTA VOUCHERS
What happens when Delta Air Lines offers a family $24,000 in travel vouchers to give up their three seats on a flight? The family accepts, but Delta eventually cancels the flight and reneges on the vouchers. Because airlines ... The incident happened Christmas Day as Delta was trying to find seats on an overbooked flight from Oakland to Salt Lake City. The Reeves family gave up their seats in good faith and were thrilled with the $24,000 in vouchers. But Delta then cancelled the flight entirely when the first officer didn't arrive. It also cancelled the Reeves' vouchers. ABC7 Television in San Francisco has the details
1/3/23, 1AM ET, TUESDAY
SOUTHWEST'S LIFE IN THE CALIFORNIA CORRIDOR
Once upon a time, the so-called California Corridor, the air routes that link the Northern and Southern parts of the state, were dominated by local carriers such as AirCal and PSA. But those regional carriers were gobbled up by larger competitors decades ago and the lucrative intra-California routes are now dominated by the national players. It won't surprise you to learn that Southwest's fast turns, no-seat, shuttle-like operations dominate the state. And that caused a particular kind of pain for California flyers who are used to a "grab and go" kind of lifestyle when flying between destinations. The New York Times
has posted a decent enough look
at how California flyers weathered the Southwest holiday storm.
1/2/23, 9AM ET, MONDAY
SOUTHWEST GETS BACK ON TRACK
After more than 16,000 cancellations over the last 10 days or so, Southwest Airlines laid down a marker for itself: Normal operations starting Friday, December 30. Shocked as we may all be, Southwest has
delivered. According to FlightStats.com, it cancelled a total of just 99 flights during the last three days: Friday; Saturday, New Year's Eve and Sunday, January 1. It won't make anyone forget the chaos and pain, but at least the nation's fourth-largest carrier does now seem back on track and running approximately 4,400 daily flights reliably.
12/30/22, 10:30PM ET, FRIDAY
THE HIGH COST OF THE SOUTHWEST MELTDOWN
So what's the meltdown going to cost Southwest Airlines? Well, I can make some semi-educated guesses. We'll have to wait for official confirmation, of course.
Assuming Southwest gets back on track today, we're looking at about 16,000 cancelled flights over the period starting December 21. If we assume an average flight load of 150 passengers, that's a startling 2.4 million customers unceremoniously dumped.
Southwest's average fare was $155 in 2019, the last full year before the pandemic. That alone means about $400 million in refunds and lost revenue. If flyers request an average $100 reimbursement for out-of-pocket costs such as hotels, meals, rental cars and alternate flights, that's $250 million in direct expenditures. Since Southwest doesn't charge for checked bags, let's assume one piece of hold luggage for each flyer. Assume half of them have to be shipped back to customers who couldn't retrieve them at the airport. It could cost Southwest upwards of $100 per bag to deliver bags when you add in all the costs, so that could be another $125 million in outlays. In other words, we're already at $775 million in lost revenue and direct costs.
And those are the "known unknowns," to quote a one-time Defense Secretary. There are also the "unknown unknowns:" lost revenue in the months ahead because wary customers will book away from Southwest. Crew overtime costs. The cost of deadheading aircraft and crew back into position. (Southwest apparently operated 100 empty planes overnight simply to get them into position for today's flights.) Plus lawsuits and any fines that might be imposed by the Transportation Department. And how much will Southwest spend in promotions to lure customers back to the airline? Plus one more biggie: The money spent to upgrade the airline's wonky and woefully outdated information technology.
Bottom line? Perhaps a $2 billion hit to fourth-quarter 2022 and first-quarter 2023 earnings and maybe another billion over the next few years for the IT upgrades.
12/29/22, 10:30PM ET, THURSDAY
SOUTHWEST AIRLINES' MOMENT OF TRUTH
Guess what: Southwest Airlines has set itself a moment of truth for recovery and we'll know how it works out tomorrow.
Today, however, was another brutal day for the airline's customers. At the moment, Southwest has cancelled 2,363 flights or 57% of its schedule. Most of those were premeditated cancels as the airline struggled to "reset" its network and get back to a full schedule.
That reset is planned for tomorrow, Friday, December 30. The airline has proactively cancelled fewer than 40 flights tomorrow and Southwest executives say they will be back to normal. Bold talk from an airline that has cancelled more than 15,000 segments in the last 10 days.
But Southwest has thrown down the gauntlet and we'll see how it performs in real time tomorrow.
Here are some other developments:
Phil Baker, our tech guru who had two horrid experiences with Southwest in recent weeks, has some thoughts about what he calls the airline's inevitable meltdown. You can read his column here
Transportation Secretary Pete Buttigieg has written a letter to Southwest Airlines chief executive Bob Jordan. The DOT promptly published it, so you know it's a lot of smoke, mirrors and political posturing. But it's worth reading to keep up with state-of-the-art politics speak
WHEN IT RAINS ...
Southwest has struggled to get a third of its flights in the air this week. The last thing it needed was aborted flights. But a mechanical issue yesterday forced a Chicago-Phoenix flight to divert to Milwaukee. (Read about it here
.) A day earlier, a Honolulu-to-Oakland flight turned over the Pacific and returned to Honolulu due to a disruptive passenger. Read about that one here
HOSTAGE VIDEO II
A day after a stiff-necked video from Southwest chief executive Bob Jordan was released, chief commercial officer Ryan Green tried to rally the troops, allay customer concerns and impress the masses. His effort had the same hostage-video vibe as Jordan's effort. View it here
12/28/22, 11PM ET, WEDNESDAY
PRECIOUS LITTLE GOOD NEWS FROM SOUTHWEST
Here's the latest on the Southwest Airlines saga. Unfortunately, there's precious little good news to report.
According to FlightStats.com, Southwest has dumped 2,510 flights so far today. That's 61% of its published schedule. Tomorrow looks little better. The airline has pre-cancelled 2,348 flights or 58% of its schedule.
A BAD LOOK
Southwest's collapse has largely obscured the industry's poor performance last week during the worst of the nationwide storm. But the rest of the airline industry has rebounded nicely. Today's performance is an example. While Southwest was cancelling more than 2,500 flights today, all the other airlines in the United States dumped about 400 flights.
UPGAUGES AND DOWN DRAFTS
Southwest's competitors have moved some equipment around and have put larger aircraft on selected routes that Southwest normally would dominate. (That's called upgauging in industry jargon.) Meanwhile, some embarrassing fares--United, for instance, had been charging north of $4,000 on intra-California routes where Southwest is often the biggest player--have led most major carriers to cap their fares for the next few days. That doesn't mean prices are reasonable, but, you know, any port in a Southwest-less storm.
NO LUV ON WALL STREET
Southwest shares, which trade as LUV, fell another 5.16% today and closed at $32.19. That's atop yesterday's nearly 6% decline.
CHECK MY MATH
It's impossible to guess exactly how much this debacle will eventually cost Southwest. But I did some back-of-the-envelope math on its current revenue losses. Assume an average load of 150 passengers per flight, a decent guess given Southwest's all-Boeing 737 fleet. And let's assume 2,600 daily cancellations. Then realize that Southwest's average fare in 2019, before the pandemic, was $155. It all means Southwest is bleeding north of $60 million per day in lost revenue.
WITH FRIENDS LIKE THESE
At a minimum, Southwest Airlines is facing a huge fine from the Transportation Department for its systemwide collapse. But Rick Gates doesn't think that's wise because "all that's going to happen is that fee, that fine, is going to get passed down to the consumer in some form at a later point." Who's Rick Gates, you ask? A former Donald Trump campaign aide outed in the Mueller Report. He spent 45 days in jail for his and Paul Manafort's work with pro-Russian thugs in Ukraine. Who'd even ask Gates' opinion on Southwest? Newsmax, the right-wing "news" operation
A Nashville police officer says he was sent by Southwest Airlines to clear airside gate areas of Nashville Airport of travelers displaced by cancelled flights. His justifications are mostly incorrect--tickets are valid even if a flight is cancelled, for instance--but, in the end, it becomes a matter of a cop having authority to move you along simply on his say-so. A traveler who identifies herself as a lawyer does her best to pin him down on justifications and jurisdictions. The peaceful--if contentious--interaction was caught on videos and posted on a Twitter feed
12/28/22, 10PM ET, WEDNESDAY
DELAYS AND CANCELLATIONS ARE LITERALLY HEARTLESS
The news networks, newspapers and social media are replete with tales of broken holidays, dire straits and downright depressing details of travelers caught in mass cancellations by Southwest and other carriers. But one of special note: An Alaska resident lost his chance for a heart transplant when three consecutive flights to Seattle cancelled and the organ was given to another recipient. The Anchorage Daily News
12/28/22, 9PM ET, WEDNESDAY
MEANWHILE, IN BUFFALO
Buffalo Niagara International Airport closed on last Friday (December 23) at around 1pm ET. It finally reopened at 11am ET today. Some of its snow-moving equipment had been buried in 10-foot snow drifts. There actually were a few departures and arrivals this afternoon.
12/28/22, 1AM ET, WEDNESDAY
THE WHOLE WORLD IS WATCHING SOUTHWEST
Some "good" news: Under pressure from mainstream media outlets--which are now leading with the story--and scrutiny from politicians on both sides of the aisle, Southwest Airlines has established a page where affected travelers can claim reimbursement for expenses
. The airline says it will "honor reasonable requests for reimbursement for meals, hotel, and alternate transportation." It will be interesting to see how this plays out, especially since the Transportation Department claims it is now watching and investigating Southwest's actions.
If these sort of things matter to you, Southwest chief executive Bob Jordan has gone public with his first video message about the meltdown. You can view it (and read a transcript) here
. To me, the video plays halfway between a hostage tape and a CEO-caught-in-headlights commentary. YMMV, of course.
The latest numbers: According to FlightStats.com, Southwest eventually cancelled 2,691 flights on Tuesday or 64% of its schedule. For Wednesday Southwest has already cancelled 2,493 flights or about 62% of its planned service. The airline has already pre-cancelled 2,2276 flights on Thursday.
Let's try to put those numbers in some real-world context. Southwest operates an all-Boeing 737 fleet. Let's assume there was an average of 150 passengers booked per flight. At 2,500 daily cancellations, that means Southwest is dumping and inconveniencing around 375,000 flyers per day. That means more than a million customers just during the first three business days of this week.
Also worth noting: Since Southwest includes two checked bags with each ticket, the airline hauls a lot more luggage than other carriers. Needless to say, bags are strewn around the country. Many are out in the open and clogging unused gates, ticket counters and areas around the baggage carousel at airports around the nation. The pictures you can see on news reports and social media are epic. And not epic in a good sense.
And one hard-core number: Southwest stock (LUV) closed at $36.09 on Friday, December 23. It closed Tuesday (December 27), when trading resumed after Christmas, at $33.94. That's a 5.96% drop. One doesn't expect the next few days to be better. And we can only speculate on the financial hit the airline will take in the fourth quarter of this year and the first quarter of 2023.
12/27/22, 12:30AM ET, TUESDAY
SOUTHWEST'S CONTINUED SPIRAL
I wanted to briefly update you on the Southwest Airlines systemwide meltdown because the airline is finally admitting it has fallen and it won't get up any time soon.
According to figures compiled by FlightStats.com, Southwest has already cancelled nearly 2,500 Tuesday flights, which represents 61% of its systemwide operations. For Wednesday, Southwest has pre-cancelled more than 2,400 flights. Expect both of those numbers to rise in the hours ahead. On Monday, Southwest dumped a total of 2,900 flights or about 71% of what it expected to fly.
Things will not
improve in the days ahead. The airline has confirmed that its most optimistic estimates are that it will operate only about 1,500 daily flights through the New Year. (That represents roughly a third of its published schedules.) Moreover, an internal airline memo says that it has "zeroed out" its schedule for the next few days. That's industry jargon for not selling any new tickets during this period.
What's it all mean? As I said yesterday afternoon, Southwest simply is not a reliable option for travel right now. If you are holding tickets for a Southwest flight through next week, I'd look for other options. There is simply no way you can confidently expect your flight to operate. Find travel alternatives.
12/26/22, 6:30PM ET, MONDAY
PHIL BAKER DID WARN YOU
Saying we told you so is of little use, of course, but I do refer you to Phil Baker's two columns on Southwest's issues in the last 30 days. See them here
. Enjoy your holiday. Hope you're not traveling ...
12/26/22, 5:30PM ET, MONDAY
SOUTHWEST COLLAPSES, DEFER ALL TRAVEL
You didn't need me to tell you that the epic storm blanketing huge portions of the United States in recent days has played havoc with the nation's airlines, airports and Amtrak. In the midst of the overall chaos, however, there is one incredible meltdown that needs your special attention. Southwest Airlines has all but collapsed. Its particular meltdown means you should book away from Southwest for the next several weeks. Its problems are that severe.
First, the scope of the problem. The airline cancelled 42% of its flights yesterday, Christmas Day. That is a staggering 1,635 flights, according to FlightAware.com. Astonishingly enough, today has been worse. As of 5pm, Southwest has dumped 2,700 flights, an astonishing 67% of its nationwide system. This comes after last week's extremely ragged operations, which radiated across the Southwest network from its Denver hub.
Complicating the cancellations are devastating issues contacting the carrier. The airline's three consumer channels--phones, the Southwest app and the carrier's Web site--have been overwhelmed with travelers hoping to rebook. The Web and the app have gone offline intermittently and phone lines are so clogged that waits are hours long, assuming you don't get an endless busy signal. Travelers already at the airports are being told it may take days to get them alternate flights. Southwest terminals around the country are a sea of aimless, flightless humanity.
It's not just flyers having issues. Southwest flight crews can't reach the carrier, either. The airline's crew-scheduling lines are jammed and some employees report hours-long waits to get assignments. Add this to crew shortages--a severe shortfall of ramp agents and baggage handlers at Denver International last week was the first domino to topple--and it means Southwest can't get pilots and flight attendants to planes. And, of course, many of those aircraft are out of position.
There are other issues--the airline's largely point-to-point network, which is difficult to keep in line during a nationwide weather event; Southwest's largely archaic informational technology for both crews and passengers--but deeper dives on those are fodder for a postmortem.
For now, I urge you to defer all travel on Southwest in the days (and possibly, weeks) ahead
. With so many of its planes out of position, such a backlog of displaced travelers and crews unable to successfully get their assignments, it will take Southwest weeks to unkink its issues. Its published schedule now must be considered unreliable given the depth and breadth of its operational problems.
Bottom line: Find alternative carriers to fly. You simply cannot assume a Southwest flight will operate on-time--or at all--for the next period of time. If you're already holding Southwest tickets, find a backup because there is no guarantee your flights will operate.
12/24/22, 6PM ET, SATURDAY
SOUTHWEST HITS THE SKIDS AT DENVER AND BWI
Ever heard of a "state of operational emergency" at an airline? Neither have I. But Southwest Airlines declared such an emergency on December 21 at two airports--Denver and Baltimore/Washington--due to a shortage of ramp workers and high absentees. It demanded all employees show up for work, threatened to fire them if they didn't and insisted any sick days be accompanied by a doctor's note. Or as Chris Johnson, the airport's senior director of ground and airport operations put it in a memo: "Failure to comply will be considered insubordination and will result in termination." Southwest has been plagued this week by even more cancellations than most airlines during this miserable holiday travel period. In Denver, specifically, temperatures on the airport tarmacs dipped below -20 degrees. Frankly, not a fit night for man or ramp workers. And at least one Southwest flight to Denver from Florida turned back because there were no ramp workers to service the jet if it arrived at DEN.
12/22/22, 6PM ET, THURSDAY
THE WEATHER OUTSIDE IS FRIGHTFUL ... AND TRAVEL SUFFERS
To quote a popular holiday classic, the weather outside is frightful ... and that is playing havoc with travel.
For context, consider: More than two million people passed through U.S. airport security checkpoints during each of the last seven days. In other words, it's as busy as it's been at any time since the pandemic. That crush of travelers, many of them inexperienced, occasional flyers, is now crashing right against this weird weather system covering much of the nation with frigid temperatures, snow, rain, wind and sleet.
The result? Horrible delays and cancellations. Yesterday was manageable, with around 600 cancellations and 8,300 delays. Today came the meltdown. As of 5pm today, there have been more than 2,200 cancellations and 7,200 delays. Expect those numbers to rise precipitously in the hours ahead and through tomorrow when the storm reaches the crowded hubs along the Eastern Seaboard.
The worst airports so far today have been Denver (27% of departures dumped), Chicago/O'Hare (25%), Chicago/Midway (37%) and Des Moines (28%). The problem, of course, is that there are few replacement seats to accommodate those being cancelled today. And with tomorrow expected to be worse, travelers will be stuck in place. Worse, flight crews will be out of position for days--and many will be running up against their monthly and annual duty time limits.
Simply put: Don't travel if you can avoid it because, honestly, you might not be able to travel if you want to do it. By the way, transatlantic travel is little better. The weather is awful in parts of Europe, too, and there are several strikes around the continent that will further restrict flying.