Southwest Airlines CEO Warns of Further Cancellations as Airline Seeks Recovery

Southwest Airlines Co. is down 4.63%.

More than two-thirds of flights were canceled on Monday, with further reductions planned for the rest of the week. Thousands of customers were stranded as a result of the severe winter weather, which caused major disruptions for other airlines as well.

Bob Jordan, CEO of the company, said in an interview on Monday evening that the day was tough and that tomorrow is likely to be just as tough as they work to get out of this situation. He went on to say that this is the largest-scale event he has ever seen.

Southwest plans to operate at about one-third its regular capacity in the coming days, to give crews time to get into position, said the airline's president. The reduced schedule could be extended, he added.

A Southwest spokeswoman confirmed that the airline is currently planning to keep its announced flight cuts in place through Thursday. According to FlightAware, the airline was operating its reduced schedule on Tuesday, with about 62% of its flights canceled.

Southwest Airlines canceled a record 2,800 flights on Monday, as the Dallas-based carrier struggled to recover from a series of severe storms that hit the U.S. last week. According to FlightAware data, Southwest has canceled a total of 8,000 flights since Thursday.

On Monday, the Transportation Department called Southwest's rate of cancellations "disproportionate and unacceptable." The department said it would examine whether the cancellations were controllable and whether the airline is complying with its customer service plan.

Ryan Green, Southwest's chief commercial officer, said in an interview that the airline is taking steps to cover customers' reasonable travel costs, including hotels, rental cars and tickets on other airlines. He also said customers whose flights are being canceled as the airline recovers are entitled to refunds if they opt not to travel.

Despite generally improving weather conditions and warming temperatures throughout much of the eastern half of the country, the troubles at Southwest intensified on Monday. The region had been pummeled by snow, wind and subfreezing temperatures in recent days.

Senior Southwest executives spent much of the weekend, including Christmas Day, meeting to work through the problems. However, their efforts failed to get the airline back on course.

The problems were caused by a combination of bad weather, the way Southwest's flight routes are set up, and, according to managers and union leaders, some execution challenges. One of these was a crew-scheduling system that couldn't handle the volume of changes.

Social media was full of customer complaints and images of long lines. Some passengers said they waited days to retrieve checked bags after flights were canceled or waited for hours on hold for assistance. Others said they had trouble using the airline’s website.

Southwest Airlines apologized to customers and employees on Monday for the disruptions caused by the airline's reduced schedule. Southwest said it is working to address the issue by "rebalancing the airline" and getting crews and planes to the right places.

The airline said that it was fully staffed and prepared for the approaching holiday weekend when the severe weather swept across the continent. It added that the tools it uses were operating at capacity.

Jonathan Bodow, a facilities management executive, said he had two Southwest flights canceled from two different airports in less than 24 hours, including one that boarded and deplaned. He decided not to take a chance on a third. He and his family left Kansas City, Mo., on Monday afternoon to drive 19 hours home to Phoenix.

Mr. Bodow, who is a frequent flyer with Southwest, signed up for voice mail alerts from the airline. He says that Southwest is usually very proactive, sending alerts for even a five-minute delay. However, he has not received any alerts in the past two days and his family's four checked bags are still in St. Louis.

A spokesperson for Southwest Airlines said that some flights were boarded and then canceled due to flight crews running out of allowable work time.

Other airlines also had a difficult time amid the harsh weather. Delta Air Lines Inc. canceled about 20% of its flights Saturday and Sunday. Alaska Air Group Inc. canceled about 65% of its flights on Friday. Spirit Airlines Inc. on Sunday canceled 25% of its flights.

While other carriers experienced less disruption, Southwest's cancellation numbers increased on Monday. According to FlightAware, Southwest accounted for over half of U.S. flight cancellations on Sunday and nearly three-quarters on Monday.

"That sounds like a full-fledged meltdown," said Scott Nason, an aviation consultant and former operations executive at American Airlines Group Inc. "I'm not sure how they're going to recover from this."

"When you have a situation where a large part of the country is under a weather advisory or warning in a very short time frame, during a time of year when travel is already very busy, it's not easy to get everything back to normal," said Duncan Dee, former chief operating officer at Air Canada.

Southwest was affected early on by the bone-chilling cold and wind in Denver and Chicago. Planes froze overnight in Denver on Thursday night, and were unusable until midday Friday. Midway International Airport in Chicago ran out of space for deicing, hobbling the airport even as O'Hare International Airport began to ramp back up.

Executives were optimistic for improvements heading into Christmas Eve, according to messages to employees on Friday. However, new and unexpected problems, such as fog in San Diego, a fuel vendor's staffing shortage in Denver, and a logjam created by additional planes spending the night in Dallas, continued to crop up over the weekend, undermining the airline's efforts to reset itself.

Southwest Airlines takes a different approach to flying than some of its rivals. Instead of flying around central hubs, its planes hopscotch around the country. This can make it hard to isolate problems to one part of the country and can make it difficult to catch back up when things start to go wrong, causing disruptions to ripple.

Meanwhile, the process of scheduling pilots and flight attendants became chaotic when the systems couldn't keep up with the changes, executives and union leaders said. This created difficulties for everyone involved in the process.

"We have crews stuck, and scheduling doesn't know where they are," Casey Murray, head of the union that represents Southwest's pilots, said Sunday. Pilots were forced to book their own hotels when the airline didn't assign them. Some flight attendants spent the night on cots in crew lounges, according to their union.

Crews rely on phone systems to call in for flight assignments, and many waited for hours for instructions before hitting limits on how many hours they could work without rest, a problem that union leaders reported and executives acknowledged. Flights were canceled when they didn’t have a full complement of crew. This caused major delays and disruptions for passengers.

Chief Operating Officer Andrew Watterson told employees Sunday night that the airline's crew-scheduling systems were not able to cope with the demand. Automated systems for crew scheduling could not handle the volume, requiring manual workarounds that overwhelmed the staff, he wrote.

"Even with crews picking up open trips, the disruption of our fleet and crew networks caused by the storm meant that we had to cancel hundreds of flights today," said Mr. Watterson in a message on Sunday evening. This represented about 10% of the airline's flying for the day, and the number of cancellations continued to grow throughout the day.

Mr. Jordan, the CEO, told employees in a message Sunday that the winter storm was unprecedented all across their network. He said they are still trying to get the network back to normal and that there is some fallout from the storm.

Mr. Jordan said that outdated systems are partly to blame.

"We're suffering from a lack of tools," he said Sunday. The airline had already been in the process of upgrading some of those systems.

Southwest Airlines has embarked on a major expansion into 18 new cities during the pandemic. Although travel demand has not yet returned to pre-pandemic levels, the carrier has been profitable over the past year and a half and has ramped up hiring. This month, the airline said it would restore its quarterly dividend early next year.