Southwest Airlines hires Oliver Wyman after December operational meltdown

Southwest Airlines has hired consulting firm Oliver Wyman to perform a review of the company after a December operational failure led to 16,000 cancellations and left customers stranded across the country.

Oliver Wyman is speaking with Southwest employees and union officials to assess the airline’s systems, identify gaps in operations, and recommend actions to prevent a reoccurrence.

Union officials at the company have highlighted called out the airline’s dated technology systems.

As a December winter storm stranded pilots and flight attendants at airports, Southwest’s legacy GE software system was overwhelmed by efforts to move staff around. As changes piled up, the company was forced to make changes manually.

GE – which has been called in to update Southwest’s software – said its system “performed as designed” and it is working with the airline to “define new functionality.” Southwest plans to spend more than $1 billion on its IT systems this year, including automated crew scheduling.

The airline has initiated several other measures as it awaits Oliver Wyman’s assessment – including establishing supplemental operational staffing that can quickly mobilize in a crisis. The airline’s board has also created a new operations review committee that will work with management to understand the December operational failure and help oversee the company’s response.

Southwest says the incident could cost the company up to $825 million. As a goodwill gesture, the airline has awarded customers affected by the meltdown 25,000 Rapid Rewards points – equivalent to more than $300.

The US Department of Transportation earlier this month said it is investigating the incident.

Oliver Wyman’s aviation sector practice advises on the entire airline value chain – including strategy setting, operations and maintenance, crew and airport management, network and fleet planning, pricing and revenue management, and loyalty programs.