Southwest Airlines
has shared more detail on its action plan for improving operations since it suffered mass cancellations related to Storm Elliott in December.
During the J.P. Morgan Industrials Conference earlier this week, Bob Jordan, the carrier’s president and CEO, talks of the
severe weather event
that turned into a crew-related event resulting in a “three-day reset of our aircraft and crew networks.”
“The outsize impact at two of our largest airports, Denver and Chicago, created waves and waves of close-in flight cancellations. Cascading close-in flight cancellations overwhelmed our processes and technology, which led to manual alternatives and efforts that were both tedious and took longer to solve.”
Jordan shares the total cost of the disruption of $1.2 billion, including a $350 million to $450 million pre-tax negative impact for the first quarter and a further $50 million cost anticipated for the rest of this year.
Since then Southwest has made its own assessment of the incident as well as bringing in aviation consultant Oliver Wyman and taking various steps to mitigate the impact of similar events going forward.
In addition to improving winter operations by buying more de-icing trucks, the airline is also rolling out a new weather app for crew with “more real-time and dynamic weather indications to enhancing de-icing holdover times, which is essentially how long you have to depart before having to de-ice again.”
The airline plans to invest $1.3 billion to upgrade and maintain systems in 2023, including crew optimization, crew scheduling and customer phone systems.
Further steps include updating its operational dashboard to enable more real-time monitoring across the network and “improving dashboard alerting and decision and support tools.”
Southwest is targeting October for completion of the three-part strategy.
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The action plan sits alongside the airline’s five-year modernizaton plan, which began last year.
Responding to a question from an analyst, Jordan says he doesn’t believe structural changes are required within the airline.
He was asked whether he read any of the criticism at the time that he thought was fair.
“We made a mess for our customers, we made a mess for our employees and when you impact 2 million people, it’s a mess. When you’re in the middle of it, I'm not thinking about what others are thinking or opining on, the point was stay safe, get the network under control and back to normal and get our crews and our aircraft in the right spot, get back to flying and then next take care of the customers that we disrupted.”
He adds that while there has been a lot of focus on the carrier’s technology, it spent $1.3 billion on technology in the past year.
“In the last five years we put in new reservation systems, new gate management systems, a new human resource system. I can go on and on and on, there has been a ton of investment in technology."