0:05

Did you fly this holiday season?

0:07

Oh, no. No. I don't go anywhere over the holidays.

0:10

That's a nightmare. I don't know why you do.

0:13

Our colleague, Alison Snyder, covers airlines.

0:15

So she knows holiday travel can be gnarly.

0:18

And she saw signs that this year would

0:20

be especially bad. The

0:24

weather, the week heading into Christmas

0:26

was just pretty much the worst case scenario

0:28

for a really busy travel

0:29

week. You know, exactly what you'd hope would not happen.

0:32

More than two hundred million Americans are under

0:34

some form of winter storm advisory heading

0:37

into Christmas weekend. National

0:39

weather service alerts range from Washington

0:41

State to Maine people were expecting

0:43

really, really cold freezing subzero

0:46

temperatures in a lot of the country. The deadly

0:48

winter storm hitting Buffalo in Western

0:50

New York really hard. More than two feet

0:52

of snow has fallen there, really high

0:54

gusty winds, snow,

0:56

ice, and thirty five miles an hour.

0:58

Danger Winshells today. And

1:01

it was over a lot of the

1:03

country. So it was kind of just

1:05

this all encompassing travel nightmare

1:07

that everyone was anticipating. So

1:13

everybody sees this storm coming. Now

1:15

all the airlines saw this storm coming.

1:17

What happens to the airlines

1:20

once it actually hits. Yeah.

1:22

It was bad. I mean, airlines were

1:24

saying some of them had planes that were

1:26

left outside that were coated in

1:28

ice. The Jeffbridge is freezing.

1:30

They had fuel pumps congealing, you

1:32

know, power outages at the airports.

1:36

Every airline faced challenges,

1:38

but one airline had a

1:40

complete breakdown. Southwest

1:42

Airlines experiencing a system wide

1:44

meltdown. An unparalleled holiday

1:47

travel meltdown. Major meltdown at Southwest

1:49

Airlines is in the hot seat tonight.

1:51

FOR CANCELLING twenty nine hundred

1:53

FLIGHTS TODAY ALONE. Reporter:

1:57

IN TOTAL, SOUTHWEST CANCELLED ABOUT

1:59

sixteen thousand FLIGHTS.

2:02

Because Southwest wasn't just dealing

2:04

with bad winter weather. It was

2:06

also facing logistical catastrophe

2:09

one of the worst the airline industry

2:11

has ever seen.

2:15

Welcome to The Journal. Our show

2:17

about money, business, and power.

2:19

I'm Ryan Knudson. It's Wednesday,

2:21

January fourth. Coming

2:29

up on the show, why Southwest's

2:31

holiday season went so

2:33

wrong?

2:43

321

2:47

What will the world look like ten or twenty

2:49

years from now? The Wall Street Journal's Future

2:51

of Everything Podcast is here to give you a

2:53

peak, and we can't wait to show you

2:55

what's coming. Subscribe now.

3:05

Allison, there were a lot of airlines

3:08

that had to cancel flights this

3:10

holiday

3:10

season. But when did you realize that things were

3:13

so much worse for Southwest?

3:15

So, you know, throughout the weekend,

3:18

Christmas Eve and Christmas Day, we

3:20

are seeing these memos that Southwest is putting out

3:22

to employees sort of to ascribing what

3:24

they're dealing with. Every

3:27

day Southwest was telling its employees like,

3:30

okay, you know, the storm, it's

3:32

been very difficult and it's had an impact.

3:34

And here's our plan to sort of get back on track

3:36

for tomorrow. So, you know, they'd send those out,

3:38

like, Friday, Saturday, Sunday. And

3:41

then every day, the next day would roll around and things

3:43

would not be better. They'd

3:45

sort of spiral throughout the day and cancel more

3:47

and more flies. And so

3:50

by the time Monday rolled around, it

3:52

seemed like all the other airlines were getting back

3:54

on track their cancellation numbers

3:56

were more or less down to

3:58

normal levels. But Southwest

4:01

was just getting worse and worse. And

4:03

cancellations were just cascading

4:06

throughout the day to the point where, you

4:08

know, they canceled, I think, around seventy

4:10

percent of their flights on Monday. That's an astonishing

4:13

figure. Seventy percent of their flights

4:16

on the day after Christmas, like one of the

4:18

busiest travel days. Yeah. That's

4:20

really huge, especially in a day

4:22

where there wasn't really anything happening,

4:24

weather wise. The day

4:27

Southwest cancelled about seventy percent of

4:29

its flights. Other airlines saw cancellation

4:31

rates of ten percent or even lower.

4:35

Southwest has said there are a few reasons

4:37

why it fared so badly. One

4:39

is that the storm hit critical cities

4:41

like Denver and Chicago, where the airline

4:43

has a lot of crew members. But the

4:45

company has also singled out another factor,

4:48

its own inadequate technology. One

4:51

piece of technology that's come under particular

4:53

scrutiny is called Skysolver. What

4:56

is the Skysolver? So

4:58

Skysolver is it's one

5:00

of the systems that Southwest uses for crew

5:02

scheduling, and it sort of helps them automate

5:04

the work of preparing the cruise schedule

5:06

and and matching up pilots and flight attendants

5:08

to flights. Southwest says

5:10

that Sky Silver works well during more typical

5:13

storms. But as so much of the country

5:15

fell into a deep freeze, the

5:17

program just couldn't keep up. The

5:19

thing is it wasn't to staffing issue, it

5:21

seems, you know, by all accounts, they had enough

5:24

crew. They had the pilots, they had the

5:26

flight attendants, they had the planes, but they did

5:28

not have a way to match up the

5:30

pilots in the flight attendants with the planes,

5:32

so they weren't able to

5:34

operate flights because they didn't have crew members

5:36

assigned to them. With Skysollers

5:38

struggling, Southwest had to do its scheduling

5:41

manually. And it was such a massive

5:43

task. It recruited employees from

5:45

around the company to help figure it out.

5:47

So, you know, their crew members were

5:49

just sitting around for hours and hours,

5:51

waiting for someone to tell them what to do,

5:53

and it just sort of, I mean, basically

5:55

paralyzed them. But this may not

5:57

have been the only thing contributing to Southwest

6:00

issues. There was another potential

6:02

factor. A

6:04

lot of airlines like Delta or United

6:06

fly out of centralized hubs in big

6:08

cities, where passengers make their connections

6:10

to smaller destinations. But

6:13

Southwest organizes its flights a

6:15

little differently. Southwest has

6:17

really structured itself to give

6:19

people direct connections between cities.

6:21

So it operates more point to point

6:23

and it's cruise and planes

6:25

kind of hopscotch across the country

6:27

instead of kind of orbiting

6:30

around one central hub. In

6:32

theory, this could be more efficient because

6:34

there's less downtime. For

6:36

example, a southwest plane might start

6:38

the day in Virginia before flying to

6:40

Baltimore, Tampa, Puerto Rico,

6:43

Orlando, Dallas, and then ending the

6:45

day in Little Rock. And yes, that is a

6:47

real round. But during

6:49

storms, this point to point system

6:51

can create issues In a

6:53

storm situation or a disruption, I mean, one

6:55

big issue with the point to

6:57

point network is it it can just be harder to

6:59

contain problems, you know, a problem in

7:01

one specific area of the country. It

7:03

might ripple out in a way that

7:05

it might not at another airline. Mhmm. Because

7:07

that flight thing was that that got held up in

7:09

Seattle was supposed to fly to San

7:11

Francisco and then to Denver and then

7:13

on to say Miami -- Right. Right. -- it gets held

7:15

up along the way. Yeah. It can just

7:17

be harder to to isolate problems to

7:19

one area. Southwest's

7:22

compounding problems created big

7:24

headaches for customers. Customers

7:26

like James Nolan. James

7:29

had been planning to see his parents in California.

7:31

He was traveling with his wife in three

7:33

year old. Well, we had reservations

7:35

on southwest from Denver to

7:38

Sacramento on December

7:40

twenty sixth, and we showed up to

7:42

the airport, checked our

7:45

three bags and made it through

7:47

security with no problems. And then

7:49

our flight was promptly canceled at that

7:51

point. James and his family

7:53

were rescheduled for a flight four days later.

7:55

And he says Southwest promised that his

7:57

checked bags, which were now trapped at the

7:59

airport, would make it on his next flight.

8:02

But as James and his family sat on the plane,

8:04

getting ready to finally fly to Sacramento,

8:07

he knew their bags weren't on board.

8:09

And how did you actually find out for

8:11

sure that your bags weren't on it

8:14

through our airbags? That's it. James

8:16

had put Apple location tracking airbags

8:18

inside their bags. So

8:21

you could you were sitting on the airplane, looking at

8:23

your iPhone app, seeing that your

8:25

bag was not with you on the airplane.

8:27

It was, like, still at the airport. Exactly.

8:29

We we taxied out right past that

8:32

that hanger that we knew our bags were

8:34

in. That's when it

8:36

got pretty frustrating. Is

8:38

there anything in your bag that that you really

8:40

need? Yeah. Well, I'm I'm

8:42

an active duty military officer

8:44

and I made the big mistake of

8:46

checking some of my uniform items

8:49

into my check the check luggage.

8:51

I was gonna preside

8:53

over promotion ceremony for my cousin who's

8:55

an army officer. Just kind of a

8:57

special treat we're gonna do for my ninety three year

8:59

old grandpa while we're in California.

9:01

He was also on Southwest. He got canceled, so he

9:03

never made it from Seattle. Oh,

9:05

man. Across the

9:08

country, people's holiday plans were in

9:10

shreds. But

9:13

before things could get better at Southwest, they

9:15

would have to get a whole lot worse.

9:19

That's coming up.

9:25

What then will the future reveal?

9:28

There's one thing we know about the future.

9:30

It's being built now. We

9:32

all have a stake in the future. The

9:34

future. The future. The future. And the

9:36

Wall Street Journal's future of everything

9:38

podcast is here to give you a glimpse of

9:40

what's on the way. I'm Danny

9:42

Lewis. Join us as we dig into how

9:44

science and technology are shaping

9:46

the future. Oh, that is where you and I

9:48

are going to spend the rest of

9:50

our lives. Subscribe

9:52

wherever you get your podcasts.

10:02

After Southwest hit its breaking point

10:04

last Monday, the day after Christmas,

10:06

the company's leaders made it

10:08

drastic to decision. They

10:10

canceled even more flights. They

10:12

cut roughly two thirds of Southwest

10:14

flights last week on

10:15

Tuesday, Wednesday, and Thursday. Just

10:19

realized, you know, there was no way to sort of

10:21

keep flying through this. They really needed a bigger

10:23

reset to get the pilots

10:25

and the flight attendants and planes where they needed to

10:27

be. So they took that three days, you know,

10:29

almost in hibernation to kind

10:31

of start over basically.

10:33

What did that allow them to do. Just like

10:36

figure out where everybody was and

10:38

give them time to figure out, okay, like,

10:41

Bob, flight attendant needs to be at

10:43

this airport and then, like, get

10:45

them to that location or just Yeah. I

10:47

mean, that's exactly it. They had over a

10:49

hundred very flights just to

10:51

move planes and crew members to

10:53

where they needed to be to get off on the right

10:55

foot on Friday. So, you know,

10:57

some of it literally was moving people

10:59

to the right spot so they could start their day on Friday.

11:02

In total, Southwest

11:04

canceled about sixteen thousand

11:06

flights. But the reset

11:08

worked. After three days of a

11:10

drastically reduced schedule,

11:12

Southwest was back to flying last Friday with

11:15

its full schedule of about four

11:17

thousand flights. But

11:20

customers are still angry. Airports

11:22

are still littered with lost bags.

11:25

And for Southwest, the full

11:27

damage of the meltdown is still becoming

11:29

clear. What is Southwest gonna

11:31

do for all the customers whose flights

11:33

got canceled and whose bags, like,

11:35

went missing? Well, I mean, there's

11:37

there's saying they're gonna go above and beyond that they're gonna make

11:39

it right. So, you know, one thing

11:41

people aren't entitled to refunds if they weren't able

11:43

to take their trip their fight

11:45

was canceled or significantly delayed. They

11:47

weren't able to travel. They're entitled to refunds.

11:50

Southwest has said it's going to reimburse people for

11:52

all those costs that they

11:53

incurred. I

11:54

think they've said they'll reimburse for reasonable cost. So

11:56

then, obviously, that opens a bit of a can of

11:58

worms. What's a reasonable cost? What

12:00

if there was only a five star hotel

12:02

available? Mm-mm. It's just

12:04

gonna be a a huge ordeal to kind

12:06

of work through all that. And

12:09

how much how much could all of

12:11

this cost Southwest? Financially,

12:14

it's gonna be a very big deal in all

12:16

likelihood. You know, we we've seen some analyst

12:18

estimates, you know, put the total

12:20

cost that five hundred million

12:22

dollars, six hundred million dollars, maybe

12:24

more. So it could be just

12:26

very impactful financially. And

12:28

it could trigger just a whole lot

12:30

of scrutiny from regulators,

12:33

lawmakers. You know, some of that

12:35

is has been named at the industry overall, and

12:37

some of it's Southwest in particular.

12:39

In fact, transportation secretary Pete

12:42

Buttigieg has already called out

12:44

Southwest by name. Here he is on

12:46

CNN. From what I can tell

12:48

Southwest unable to locate

12:50

even where their own crews

12:51

are, let alone their own

12:53

passengers, let alone baggage. He's been

12:55

out there you last week saying, you know,

12:57

this was a southwest issue. This wasn't

12:59

an industry issue, and they're gonna be

13:01

under the microscope. To

13:03

make sure that they really do what they're

13:05

supposed to do in terms of taking care of

13:07

customers after this.

13:08

Our department will be holding them

13:10

accountable for their responsibilities to customers,

13:13

both to get them through this situation and to

13:15

make sure that this can happen again.

13:20

Yesterday, Southwest took another

13:22

step to compensate customers. They

13:24

began rolling out twenty five thousand

13:26

frequent flyer miles to people impacted by

13:28

the

13:28

cancellations. In a letter to

13:30

customers, Southwest CEO Bob

13:32

Jordan called the Myles a gesture of

13:34

goodwill saying, quote, I

13:36

know that no amount of colleges

13:38

can undo your experience. But

13:41

it's not clear whether perks will be enough

13:43

to regain customers' trust.

13:45

Do you think you'll you'll fly

13:47

Southwest again? That's

13:50

been a debate between my wife and I. We,

13:52

you know, we we still have some credits

13:54

left on Southwest, and I think that

13:56

we'll maybe use those, and then we're gonna

13:58

look elsewhere for our business going forward.

14:01

And we even have, like, the little Southwest

14:03

credit card to build points and whatnot.

14:05

Mhmm. And we're already looking at other travel

14:07

friendly credit cards so we can get ourselves

14:09

out of the Southwest system, at

14:11

least in the near term. But before James

14:13

thinks about booking any more travel, he

14:15

has a more immediate problem. He

14:17

really needs his bags back. I

14:21

unfortunately have. I gotta go to work

14:23

tomorrow and my boots and some of my other

14:25

important uniform items are still

14:27

sitting in those those checked bags.

14:29

So Yeah. You can't not

14:31

that you would in the middle of winter, but you can't, like, show up

14:33

in foot blobs. I take it.

14:35

Exactly. Yeah. Exactly. So what's

14:37

your plan when you get home to

14:39

Denver? Are are you gonna drive to the

14:41

airport and, like, just try to grab your bag

14:43

from wherever it's hiding. Yeah.

14:46

You know, we we can see where

14:48

they are on the airport property based off

14:50

the airbags. And one of the

14:52

bags, which is actually has my golf

14:54

clubs of all things, the least important of all of

14:56

this. Mhmm. So they're out sitting on the Tarmac

14:58

by terminal c according to the airtight right

15:00

now. But, yeah, you know, the other two

15:02

bags that are the ones we really eat

15:04

back soon. They're still sitting

15:06

in in the maintenance hanger. And

15:08

so when I get there and just say,

15:10

hey, I'm not gonna leave until I get my

15:12

bags. Here's where they are. So

15:14

We'll see. We'll see when we get

15:16

on the ground what we're gonna do. We

15:21

ask James to keep us in the loop on that.

15:24

And last night, he sent us an update from

15:26

the Denver airport. After

15:28

four hours of the Denver BSO,

15:30

I successfully have two of

15:32

our three bags, which is

15:34

very exciting. They just

15:37

took several hours to get from this

15:39

hanger up on the northeast

15:41

side of the runway to some get

15:43

transported down and they happen to

15:45

pop out on a baggage carousel. Today,

15:48

James is able to go to work

15:50

wearing his uniform.

15:58

That's

16:03

all

16:03

for today, Wednesday, January

16:06

fourth. The journal is co

16:08

production of Gimlet in The Wall Street

16:10

Journal. If you like the show, follow us

16:12

on Spotify or wherever you get your

16:14

podcasts. Route every every weekday afternoon.

16:18

Thanks for listening. See you tomorrow.

16:23

Discover the extraordinary ideas shaping our

16:25

future at the future of everything

16:27

festival when The Wall Street Journal brings

16:29

together leaders from business science,

16:32

sports, and culture. May

16:34

second through fourth at Spring Studios

16:36

in New York City. Register today

16:38

using code podcast to receive

16:40

twenty percent off your ticket. Visit

16:42

WSJ dot com

16:44

slash F0EF

16:46

podcast to secure your spot.