Southwest vacation cancellations investigated by the feds

DALLAS — The US Department of Transportation said Wednesday it is investigating whether Southwest Airlines misled customers by knowingly scheduling more flights in late December than it could actually handle.

The department said that scheduling too many flights would be considered an unfair and deceptive practice under federal law.

“DOT is in the early phase of a rigorous and comprehensive investigation into the Southwest Airlines holiday debacle that stranded millions,” the department said in a statement.

The Department of Transportation added that it will hold Southwest liable if the airline fails to comply with federal rules on refunds and reimbursing customers for expenses when flights are cancelled. The agency said it will “use the full extent of its investigative and enforcement power” to protect consumers.

Southwest said its vacation program “was carefully designed” with “a strong plan for operating it and extensive staffing.”

“Our systems and processes were stressed as we worked to recover from several days of flight cancellations at 50 airports in the wake of an unprecedented storm,” Southwest said in a statement. The airline has pledged to cooperate with any government inquiries and is “focused on learning from this event” and reducing the risk of a repeat.

Southwest canceled about 16,700 flights in the last 10 days of December. The collapse began with a winter storm, but Southwest continued to struggle long after most other airlines had recovered, in part because its crew scheduling system became overloaded. Union officials said they had warned the airline for years about the system, especially after similar but less severe flight disruptions in October 2021.

Dallas-based Southwest eventually resorted to cutting its schedule by about two-thirds to restore crews and aircraft, which it did successfully.

The airline hired consultant Oliver Wyman to study what went wrong. CEO Robert Jordan has said the company could speed up spending on some technology upgrades as a result of the crisis, but wants to complete the review first.

Southwest said this month that the cancellations will cost it up to $825 million in lost revenue and increased expenses, including paying bonuses for employees and reimbursing customers for alternate hotels and flights. As a result, the company is expected to post a fourth-quarter loss when it reports results on Thursday.

The airline is also dealing with damage to its reputation for customer service. Analysts believe that some customers may avoid Southwest for a short time, although airlines have generally recovered quickly from other service failures.

Senate Commerce, Science and Transportation Committee Chair Maria Cantwell, D-Washington, has promised to hold hearings on disruptions like Southwest’s.