Southwest Airlines Co. today will share an overview of the prioritized actions being implemented to strengthen the airline's operational resiliency. The actions will be previewed by Bob Jordan, Southwest's President and Chief Executive Officer, at the J.P. Morgan Industrials Conference in New York and are designed for Customers and Employees to continue benefiting from the airline's 52-year history of providing Safe, reliable, and Customer-friendly Southwest Hospitality.
As a result of the initial assessments conducted by Southwest, and the globally-recognized aviation consultancy Oliver Wyman, the airline has developed a three-part Tactical Action Plan to boost operational resiliency in key areas across the Company. The airline's existing five-year Operational Modernization Plan, which began in 2022, is also underway and focuses on operational investments and organizational alignment to support Customers and Employees.
"We understand the root causes that led to the holiday disruption, and we're validating our internal review with the third-party assessment. Now, we expect to mitigate the risk of an event of this magnitude ever happening again," said Jordan. "Work is well underway implementing action items to prepare for next winter — with some items already completed. I want to thank our Employees and Customers for their patience and grace, and we're resolved to emerge an even stronger airline."
In addition to Winter Storm Elliot, which was more severe than expected, a driver of the disruption was determined to be the volume of cascading and close-in flight cancelations during the storm which overwhelmed Station operations and the airline's Crew Network and hindered established processes and internal tools. While the airline had existing technology and staffing in place to handle many types of irregular operations, the pace and breadth of disruptions during this extreme event strained the ability to create timely operational solutions. The airline will provide additional communication in the coming weeks, including a microsite summarizing key findings and mitigation actions.
Highlights of the Tactical Action Plan
Accelerate Operational Investments: The airline began a five-year Operational Modernization Plan prior to December 2022 with many initiatives already underway to support operational resiliency. Now, ongoing implementation of tools and technology that allow for a greater pace of recovery during extreme events will be prioritized, and the airline is, currently, budgeted to spend more than $1.3 billion on investments, upgrades, and maintenance of information technology systems in 2023. For example, Crew Optimization software has been recently upgraded to address a functional gap that was revealed in December. Crew Scheduling and Customer phone systems also will be upgraded for better surge protection and efficiency during periods of high call volumes.
Winter Operations: Challenges with infrastructure, winter equipment, and winter weather preparedness have been, or will be, addressed through various actions, including purchasing additional deicing trucks; securing additional deicing pads and deicing fluid capacity at key network locations; and purchasing more engine covers and engine heaters for cold weather operations. Southwest was the first U.S. airline to hire back to pre-pandemic total staffing by June 2022, and, going forward, the airline will further augment winter staffing levels — for example, when Ground Operations Employees are limited to the amount of time they can work outside in extreme temperatures. Additionally, the airline plans to implement a new weather application to provide Crews with more real-time and dynamic weather indications to enhance deicing holdover times—which determines the time required before aircraft must be deiced again prior to departure.
Cross-Team Collaboration: Actions have already been taken to align various Network Planning and Network Operations Control Teams under one Senior Leader for better execution of operational plans. Additionally, data on early-indicator dashboards has been enhanced to highlight key operational metrics, and the airline will better integrate aircraft and Crew recovery decision making and optimization.
"I'm very encouraged by the work underway to address the challenges we faced in December. Our operational performance this year has been among the best in the industry, and we're committed to completing our action items while also running a Safe, reliable operation supported by our Legendary Customer Service that has made us famous throughout our 52-year history," said Andrew Watterson, Southwest's Chief Operating Officer. "I'm confident in our path forward and truly believe our best days are ahead."
A live webcast of the Company's 2023 J.P. Morgan Industrials Conference presentation is available on the Company's website at www.southwestairlinesinvestorrelations.com, in the Events and Presentations section under Upcoming Events. Likewise, a replay of the webcast will be made available following the conclusion of the live event.
