The Department of Transportation has launched an investigation into Southwest Airlines over thousands of flight cancellations that have stranded millions during the chaotic holiday season.
A DOT spokesman told FOX Business it was in the “initial stages of a rigorous and comprehensive investigation” into the airline.
“DOT has made it clear to Southwest that it must issue timely refunds and refunds and will hold Southwest accountable if it fails to do so,” the spokesman said.
The department is also investigating whether Southwest executives engaged in “unrealistic flight planning,” which federal law defines as an unfair and deceptive practice.
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“DOT will use the full extent of its investigative and enforcement powers to ensure consumers are protected, and that process will evolve as the Department learns more,” DOT said.
Southwest Airlines told FOX Business that its holiday flight schedule was “carefully designed and offered to our customers with the support of a solid operational plan and with sufficient staffing.”
“Our systems and processes have been stressed as we work to recover from several days of flight cancellations at 50 airports following an unprecedented storm,” the airline said.
“We will continue to cooperate with any inquiries or requests from government agencies or elected officials. We have a strong focus on learning from this event, reducing the risk of a repeat event and providing the hospitality and outstanding service that our customers have come to expect from us. “
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Southwest canceled about 16,700 flights in the last 10 days of December. The meltdown began with a winter storm, but Southwest struggled long after most other airlines had recovered, in part because its crew scheduling system was overloaded.
Union officials said they had warned the airline about the system for years, particularly after similar but less severe flight disruptions in October 2021.
Dallas-based Southwest eventually resorted to cutting its schedule by about two-thirds to reset crews and planes, which was successful.
The airline hired consulting firm Oliver Wyman to investigate what went wrong. CEO Robert Jordan said the company may accelerate spending on some technology upgrades as a result of the crisis, but he wants to complete the review first.
Southwest said this month the cancellations will cost it up to $825 million in lost revenue and increased expenses, including employee bonus payments and customer reimbursements for hotels and alternative flights. As a result, the company is expected to post a fourth-quarter loss when it reports earnings on Thursday.
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The airline is also struggling with reputational damage to customer service. Analysts believe some customers could avoid the Southwest for a short time, although airlines have usually recovered quickly from other service outages.
The Associated Press contributed to this report.