The Department of Transportation has launched an investigation into Southwest Airlines over thousands of flight cancellations that left millions stranded during the chaotic holiday season.
A DOT spokesperson told FOX Business that it is in the “initial phase of a rigorous and thorough investigation” into the airline.
“DOT has made it clear to Southwest that it must provide timely refunds and refunds and will hold Southwest accountable if it fails to do so,” the spokesperson said.
The department is also investigating whether Southwest executives engaged in “unrealistic flight scheduling,” which is considered an unfair and deceptive practice under federal law.
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“DOT will leverage the full extent of its investigative and enforcement power to ensure consumers are protected, and this process will continue to evolve as the Department learns more,” the DOT said.
Southwest Airlines told FOX Business that its holiday flight schedule “was carefully designed and delivered to our customers backed by a robust plan for operating it and extensive staffing.”
“Our systems and processes were stressed as we worked to recover from several days of flight cancellations at 50 airports in the wake of an unprecedented storm,” the airline said.
“We will continue to cooperate with any inquiries or requests from government oversight or elected officials. We are extremely focused on learning from this event, mitigating the risk of a repeat event, and providing the outstanding hospitality and service 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 collapse began with a winter storm, but Southwest continued to struggle long after most other airlines had recovered, in part because its crew scheduling system became 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 cutting its schedule by about two-thirds to restore crews and aircraft, which it did successfully.
The airline hired consultant Oliver Wyman to study what went wrong. CEO Robert Jordan has said the company could speed up spending on some technology upgrades as a result of the crisis, but wants to complete the review first.
Southwest said this month that the cancellations will cost it up to $825 million in lost revenue and increased expenses, including paying bonuses for employees and reimbursing customers for alternate hotels and flights. As a result, the company is expected to post a fourth-quarter loss when it reports results on Thursday.
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The airline is also dealing with damage to its reputation for customer service. Analysts believe that some customers may avoid Southwest for a short time, although airlines have generally recovered quickly from other service failures.
Associated Press contributed to this report.