DALLAS (AP) — The U.S. Department of Transportation said Wednesday it was investigating whether Southwest Airlines misled customers by knowingly scheduling more flights in late December than it could realistically handle.
The department said scheduling too many flights would be considered an unfair and deceptive practice under federal law.
“DOT is in the initial stage of a rigorous and comprehensive investigation into Southwest Airlines’ vacation debacle that has stranded millions,” the department said in a statement.
The Transportation Department added it will hold Southwest liable if the airline fails to comply with federal rules on refunds and reimbursement of expenses to customers in the event of flight cancellations. The agency said it would “exploit the full extent of its investigative and enforcement power” to protect consumers.
Southwest said its vacation schedule “has been carefully designed” with “a solid plan to run it and is extensively staffed.”
“Our systems and processes were under stress as we worked to recover from multiple days of flight cancellations at 50 airports following an unprecedented storm,” Southwest said in a statement. The airline has pledged to cooperate with any government requests 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 crash began with a winter storm, but Southwest continued to struggle long after most other airlines had recovered, in part because its crew scheduling system was 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 reducing its schedule by about two-thirds to restore crews and aircraft, which it did successfully.
The airline has hired consulting firm Oliver Wyman to investigate what went wrong. CEO Robert Jordan said the company could ramp up spending on some technology upgrades due to the crisis, but that it wants to complete the overhaul first.
Southwest said this month that cancellations will cost it up to $825 million in lost revenue and increased expenses, including premium employee compensation and reimbursing customers for alternative hotels and flights. As a result, the company is expected to post a fourth-quarter loss when it releases results on Thursday.
The airline is also facing damage to its reputation for customer service. Analysts believe some customers may avoid Southwest for a short time, although the airlines have usually recovered quickly from other service failures.
Senate Commerce, Science and Transportation Committee Chair Maria Cantwell, D-Wash., has promised to hold hearings on disruptions like the one in Southwest.