Southwest Airlines stock price plunged a whopping 6 percent on Tuesday as flight delays and cancellations in the thousands continue to plague the company.
CEO Bob Jordan told the Wall Street Journal on Monday night that the company had had a “tough day” and expected “another tough day” on Tuesday.
Jordan was right as Southwest canceled another 2,500 flights on Tuesday even though the worst of the Christmas storms to hit the Midwest and East Coast had passed.
As of Wednesday morning, the airline has canceled more than 60 percent of its schedule — another 2,500 flights — and 58 percent of its Thursday schedule.
Southwest’s share price plunged 6 percent on Tuesday as the embattled airline canceled another 2,500 flights amid a company-wide meltdown
Huge baggage yards, wait times and unhappy customers could potentially spell the end for the efficiency airline that many Americans have long favored
According to a Bloomberg report, the airline’s vice president of ground operations, Chris Johnson, declared an “operational emergency” at Denver Airport on Dec. 21 after an unusually high number of employees called in sick — a pre-warning of the larger emergency hitting the airline .
The company’s holiday crisis led to a five-day plunge in its share price. Tuesday’s slump was particularly sharp, as shares fell 6 percent to below $34 and remained flat for the remainder of the day.
On Wednesday, the stock lost another 1.6 percent in premarket trading. The company is on track to post a more than 20 percent decline by 2022.
Distraught customers across the country are left stranded after family vacations and trips with few options.
So-called baggage graveyards have become commonplace as stranded passengers try to locate their belongings at key travel hubs.
Commenting on the airline’s disastrous days, sportscaster Clint Lamb compared the airline to another notoriously flawed system – McDonald’s McFlurry machines.
“So Southwest Airlines runs essentially the same system as McDonald’s McFlurry machine,” he wrote Twitter.
With customers left stranded after vacation trips, some have linked Southwest’s operating system to that of another notoriously unstable machine
Southwest CEO Bob Jordan has repeatedly apologized to Southwest’s customer and employee base. He said Tuesday night he was confident the company would be back on track before the end of the week
Airline analyst David Vernon told the New York Times that the ailing airline’s “point-to-point system” often allows for higher utilization of planes during normal flight times, but can lead to hugely negative results when things go wrong walk.
When the winter storm hit Chicago and Denver, two of the airline’s largest hubs, chaos ensued. And in the post-pandemic environment, where airlines remain relatively understaffed, any destabilizing event could prove catastrophic.
Jordan assured customers and employees in an apology video posted by the company on Tuesday that they are “making progress” with the extensive scheduling issue the company is currently facing and are “optimistic about being back on track before next week.” .
Only about two dozen Southwest flights have been canceled in the Friday schedule so far.
But it seems like Southwest’s troubles are far from over.
Transportation Secretary Pete Buttigieg told Good Morning America on Wednesday that he will be keeping an eye on the airline as it tries to restore “trust and confidence” to its passengers.
He described the post-Christmas cancellation spate as a “meltdown,” before saying he would like to see Southwest passengers “appropriately compensated” not only for their canceled flights, but also for hotel reservations and any other costs related to their travel delays.
Buttigieg confirmed he had spoken to Jordan and took the opportunity to “remind” company executives of “their customer service obligations.”
He said that Jordan and his leadership team intend to “go beyond the letter of their customer service plan” and that DOT will be “watching closely to ensure that actually happens.”
North of 60 percent of southwest flights were canceled Wednesday and 58 percent of Thursday flights were also cancelled
As Southwest passengers await their fate, some have been documented sleeping in terminals while trying unsuccessfully to reach the company’s customer service lines.
Even company employees could not reach the airline to finalize their flight schedules.
Southwest has long boasted fast turnaround times and shorter flight times. But prioritizing efficiency has left the airline underserved in other categories, like flight planning.
Lyn Montgomery, the president of TWU Local 556, said the airline was simply “not staffed with enough staff to notify flight attendants of the schedule changes and that has created a ripple effect causing chaos across the country.”
Southwest COO Andrew Watterson addressed exactly this issue, telling employees on a call Tuesday that the company’s scheduling software dates back to the 1990s and is currently the main reason cancellations continue to be high.
Planes, Watterson said, have been ready for takeoff in recent days, and available crews have been ready for takeoff. However, Southwest’s outdated technology was unable to quickly and accurately match crews to aircraft.
“As a result, we’ve had to ask our crew planners to do this manually and it’s extraordinarily difficult,” he said. “It is a tedious, lengthy process.
CEO Bob Jordan later discussed the legacy technology issue with employees in a private letter leaked to the media.
“Part of what we suffer is a lack of tools. We have spoken a great deal about modernizing operations and the need to do so,” he wrote.
He added that Southwest is committed to investing in “improving its systems” but noting that immediate problems require “quicker” solutions.