Southwest Airlines is moving to appease frustrated, upset and weary workers at employee store points as it tries to recover from a holiday meltdown of 16,700 cancellations that paralyzed the airline. I apologize again.
CEO Bob Jordan told the 66,000 employees of Dallas-based Southwest on Friday that they will earn 25,000 “SWAG” points that can be redeemed at the company’s employee store, according to a company memo. Points can be redeemed for travel, upgrades, Southwest merchandise, gift cards and Visa debit cards.
25,000 points can be used to purchase gift cards worth approximately $400.
“I’m sorry to disappoint you,” Jordan said in a letter to workers. “I am sorry for the physical and emotional toll I have taken. I am sorry for the loss of irreplaceable time and memories. Most of all, I am sorry for hurting your trust and confidence.”
The employee’s gesture is a reflection of passengers, investors, and others who suffered around the Christmas holidays when the airline’s outdated crew scheduling system collapsed, forcing the company to shut down most operations to try to reset and recover. Southwest Airlines offered affected customers flight credits worth about $300 earlier this week, as well as a “reasonable request” for the cost. ” and promised refunds and refunds.
Points will be credited on Monday to employees hired by January 2nd.
Southwest Airlines Gratitude (SWAG) points are another expense in addition to the $725 million to $825 million loss the company is expected to suffer from the operational meltdown. About $400 million to $425 million of that was due to reduced revenue, with the rest due to “goodwill gestures” to customers due to flight cancellations or significant delays, the company said Friday. said in a filing with the authorities.
Jordan said he saw employee emails, posts and comments about how leadership handled the disruption, including “the good and the bad.”
“While I appreciate the many kind and encouraging words, I also understand the skepticism, the need for action over apology, and performance over promise.
Employees may also suffer financial losses due to a reduction in the profit-sharing payments normally paid to employees in March.
Jordan has pledged to work to fix the issues that the company has led to operational disruptions.Future technology improvements will include “new lessons learned,” he said. .
“Southwest Airlines will do everything in its power to avoid another operational disruption of this magnitude,” he said.
It will be difficult to repair relationships with many flight attendants, including pilots and flight attendants. They have been warning about substandard crew scheduling software for years. Representatives of the union of pilots and flight attendants say planes are diverted, stranded at airports, unable to contact headquarters, and get reassigned. Workers said they were left without a hotel room because they were unable to do so.
Lynn Montgomery, president of TWU Local 556, said last week, “It’s deplorable that flight attendants have nowhere to rest and sit on their phones for 12 or 17 hours trying to get to know the company.” meltdown. “By the time they get someone, they’re too tired to work.”
Local 556 represents the company’s 16,000 flight attendants.
As for how SWAG points will make workers happier, Montgomery said in an email Friday that “until Southwest invests in its technology and workers, nothing will work.” On Thursday, Jordan said in his video message that the company spends $1 billion a year on technology.
After reporting solid earnings with little to no debt in the decades leading up to the COVID-19 pandemic, Southwest was usually a Wall Street darling and investment analysts who were previously bullish on the company. I’m starting to collect criticism from the list. The company’s stock, which fell more than 12% from Dec. 21 to Dec. 28, has mostly recovered, and is down about 4% from its pre-crash price after Friday’s close. .
“I’m sorry the warning wasn’t heeded, but let me point out the obvious: It’s like running a small, crappy start-up,” Cohen analyst Helene Becker said in a research report. And you can’t run a company with more than $23 billion in revenue,” he said. Friday. “It is clear that the infrastructure is not keeping up with the growth. Management thinks he needs to look at his 2023 growth plan and consider delaying it. he can begin to incorporate into the 21st century.”
Becker said it could damage the company’s reputation.
“We believe that loyal customers will forgive this violation, but first-timers of this airline are unlikely to be impressed, especially if there are other violations next President’s Day weekend. I don’t think that will forgive again,” she said.
Jordan has promised to spend money and time upgrading its infrastructure, but the company has not given any details on how it will prevent another disruption, either soon or in the coming weeks. .
“Obviously, we don’t have expertise in crew scheduling software, but our basic assumption is that if an airline can’t manipulate red-eye or let you know if a package has been loaded, the system isn’t state-of-the-art. It’s an assumption,” JP Morgan aviation analyst Jamie Baker said in a research note on Friday.
