Southwest Under Investigation Over Holiday Travel Disaster, $220M Loss

The U.S. Department of Transportation is investigating the Southwest Airlines holiday travel fiasco that left thousands of travelers stranded for days. The investigation was brought on by the airlines report of their $220 million dollar loss in the first quarter.

A colossal winter storm forced Southwest to cancel more than 16,700 flights over several days in late December. However, this is only true for initial cancellations and others were caused by the company’s outdated software systems.

The cancellations caused an uproar from passengers who inspired a media frenzy that called on the airline to take accountability for the debacle and be transparent.

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The department’s investigation will investigate whether Southwest made unrealistic flight schedules, “which under federal law is considered an unfair and deceptive practice,” according to a department spokesperson.

“DOT has made clear to Southwest that it must provide timely refunds and reimbursements and will hold Southwest accountable if it fails to do so,” the department spokesperson added.

APTOPIX Winter Weather Travel Chicago 04541 1

Bob Jordan, Southwest’s president and chief executive officer said the flight cancellations cost the company nearly $800 million. Around half of those losses were a direct result of flight cancellations, while the other half comes from compensating customers who bought tickets on other airlines and dispensing extra frequent flier points, which are worth about $300 per passenger.

In the report announcing the losses, Jordan dished out apologies to customers and employees, saying the company has “swiftly taken steps to bolster our operational resilience and are undergoing a detailed review of the December events.”

A full scale boycott of Southwest has not transpired, but weary traveler fright and previous timelines have resulted in fewer bookings. Although reports of booking trends reflect improvement, the company is expected to lose over $300 million in revenue in the first quarter.