Southwest is stuck in a rut and faces $1 billion of debt.

Southwest is stuck in a rut and faces $1 billion of debt.

CHICAGO (Reuters), January 5th, 2008 – Southwest Airlines (LUV.N), promised a comprehensive review of an operation collapse that left thousands of passengers stranded at the end the year. A union leader claimed the airline had not yet identified the best way to prevent another.

Tom Nekouei (vice president of the airline pilots association) told Reuters he participated in a conference call on Monday with Chief Executive Bob Jordan to talk about disruption caused by a winter storm that resulted in the cancellation of almost 16,000 flights.

Nekouei stated that Jordan informed them on the phone, the details of which are not reported, that the company hadn’t yet developed a plan to correct flight cancellations.

He told Reuters that “they don’t know the corrective actions they are going to take because they haven’t done a post-mortem.”

Jordan uploaded a video later on Thursday to company’s site inviting unions to take part in an extensive review of disruption, which he claimed would be done “swiftly.”

Nekouei, a representative of almost 10,000 Southwest pilots, told Reuters that the pilots union estimates flight cancellations can cost as much as $1 billion in lost revenue.

According to Raymond James Brokerage, the collapse could reduce Southwest’s revenue growth by over half during the fourth quarter. This would amount to about $515million in revenue lost.

Southwest faces regulatory scrutiny as well as a lawsuit.

According to the White House, Southwest has “failed its customer”. The biden administration has been under pressure to make airlines responsible for cancellations of mass flights, citing the airline’s collapse.

On Dec. 31, the pilots union was in heated negotiations with Southwest. Nekouei signed a letter denouncing the company’s leadership, calling it a “cult”. The group has spent 15 years trying to destroy Southwest’s history. Southwest was known for its reliability in customer service and humorous crews. They also offer low-cost flights.

Jordan stated that the airline has made great progress in processing thousands of reimbursements and refunds. He said that the airline had delivered most of the bags which were lost to customers.


The biggest operating meltdown in the five-decades history of Southwest Unions can be attributed to the company’s outdated technology and procedures.

Nekouei stated that the failure of the company to overhaul its outdated scheduling system, which sends crews across the country to their flights as passengers, made it more vulnerable to “more severe and frequent” meltdowns. Pilots union called this so-called “deadheading practice” inefficient and fatiguing.

Nekouei stated that the same problems led to an economic meltdown in Southwest following a storm in Florida in October 2021, which cost Southwest $75 million.

The airline is certain that it has upgraded its technology in stages.

It replaced its whole reservations system in 2017. Four years later, it upgraded technology at the maintenance department. It has recently invested in digital scanners for a more efficient baggage handling system.

Jordan stated that the company invests approximately $1 billion annually in technology. He said they will continue to improve the processes and tools used by their employees to provide “reliable, low-cost” air travel.

However, Union officials have denounced the slow pace of investment.

Nekouei stated that every meltdown we have had has gotten worse. It’s becoming more common now, and they take longer to heal from.

Rajesh Kumar Singh reports, and Stephen Coates edits.

Thomson Reuters Trust Principles are our Standards

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