Monday, November 25, 2024
Business

Southwest’s crisis 2 years ago should have been a warning to Delta before its mass cancellations

Thursday appears to be the first day since last week’s CrowdStrike outage that Delta Air Lines’ operations were completely back to normal. By midday, the Atlanta-based airline and its regional carrier Endeavor Air had just five cancellations, affecting fewer than 1% of flights, according to flight-tracking website FlightAware.

But Delta’s return to normal came four full days after most other major carriers had nearly recovered. On Monday, while United, JetBlue, and American canceled fewer than 200 flights combined, Delta canceled 1,160 trips, almost 30% of its operations that day, according to FlightAware. Since the outage last Friday, the airline has canceled more than 7,000 flights, and on Wednesday, the Department of Transportation estimated that over half a million passengers have been impacted. 

The issue appears to be related to the airline’s outsize reliance on Microsoft Windows, which was taken down by the software outage last week, and which powers about 60% of Delta’s critical applications, according to the airline. 

That has required manually rebooting each individual system, and giving them time to synchronize with one another—and one system, the scheduling application that coordinates which crews are ready to fly at which airports, appears to be the crux of the meltdown. 

“Everything except that critical system is up and running,” chief information officer Rahul Samant said in a video message to employees. “And that is what we’re working on feverishly.”

The airline did not immediately respond to Fortune’s request for comment.

The Delta saga that unfolded over the past week isn’t the first time a major U.S. carrier has experienced a meltdown related to its crew-scheduling system. In 2022, during the peak winter-holiday travel season, Southwest Airlines’ operations were thrown into chaos after storms forced carriers across the country to cancel flights

But as other airlines got back on their feet quickly, Southwest’s problems persisted because the airline relied on outdated internal systems to coordinate crew schedules. When the dust settled, the budget carrier had canceled nearly 17,000 flights in a little over a week. 

Kathleen Bangs, a spokesperson for FlightAware and former commercial pilot, explained to Fortune that crew-scheduling systems are extremely complicated, and having to force a complete reset can throw operations into chaos.

“You’ve got all your pilots. That’s like one set of chess pieces on a chessboard,” she said. “Then you’ve got all your flight attendants. That’s another set of chess pieces. And then you have the airplanes and the airports. All of a sudden you get these four groups of chess pieces, and they’re all out of whack.”

In the case of Southwest, Bangs said the antiquated crew scheduling system essentially prevented the airline from recovering from the weather disruptions. 

“Once it got behind—and it got so behind it could never catch up—it could never bring the past up to current while still trying to do today and tomorrow’s crew scheduling.”

The similarities between Southwest and Delta aren’t straightforward. Southwest’s initial problem was brought on by an extreme weather event that initially grounded flights, while Delta’s issues were the result of a bug in a software update. 

But in both cases the debacle seems to have been compounded by heavy traffic. In a recent note, Delta CEO Ed Bastian said the weekend of the CrowdStrike outage coincided with the airline’s busiest weekend of the summer. 

“The technology issue occurred on the busiest travel weekend of the summer, with our booked loads exceeding 90%, limiting our reaccommodation capabilities,” he said.

What’s more, if the factors that precipitated the two meltdowns are different, the effects on crew scheduling appear to be similar. According to Bangs, Delta pilots she’s spoken to have said they were in position, ready to fly, but couldn’t get into the scheduling system, or the system wouldn’t recognize them. 

What’s surprising, she said, is that an episode like this could happen less than two years after the Southwest debacle, which should have prompted other carriers to take a closer look at their own systems. 

“After what happened with Southwest,” she noted, “and after everybody in the industry hearing for so long, especially from Southwest flight crews, who were very vocal about this, about their frustration with the system, what’s shocking is that it could happen again so soon.”

The fact that another meltdown could happen at Delta, widely regarded as an industry leader, adds to the surprise. The carrier was ranked the top airline for customer satisfaction in 2024, as well as the 11th most admired company in the world by Fortune.

On Tuesday, the Department of Transportation opened an investigation into Delta to “ensure the airline is following the law and taking care of its passengers during continued widespread disruptions,” according to a post on X by Transportation Secretary Pete Buttigieg. 

The DOT opened an investigation into Southwest following the 2022 meltdown as well. That inquiry resulted in Southwest having to pay a $140 million civil penalty, the largest the department has ever levied for consumer protection violations

“This is about the entire industry, sending a signal that you should not be cutting corners,” Buttigieg said on NPR at the time. “Because if you fail your passengers, we will hold you accountable.”

Bangs said she hopes what happened over the past week will force everyone in the industry to look closely at their own operations, or even run stress tests on their systems to see how they hold up in situations like last Friday.

“Hopefully other airlines are saying: ‘Okay, now we really need to pay attention, because now it’s happened twice, and nobody expected this from Delta.’”

In the meantime, Bangs told Fortune that the best course of action for Delta was to “give until it hurts”—that is, to get ahead on compensating passengers for their troubles, something the airline has already started doing. On Wednesday, Delta said it would reimburse passengers whose flights were canceled for “alternative flights,” or flights booked on other airlines.

“Nothing says I’m sorry like lots of free miles in your Delta SkyMiles account or free travel vouchers,” Bangs said. 

For Southwest, the 2022 disaster has continued to haunt the company. In June, activist investor Elliott Management acquired an 11% stake in the airline and has begun calling for a change in the company’s leadership. In its reasoning for an overhaul, the hedge fund specifically mentioned the 2022 meltdown, as well as a more than 50% loss in market value in three years. Southwest in turn adopted a shareholder rights plan—known as a poison pill—earlier this month that would discourage Elliott from buying up more shares of the company.

Despite Southwest’s poor position in the current market, last week’s outage did not add to its troubles. On Monday, FlightAware showed that less than 1% of its flights were canceled. On Thursday, the low-cost carrier also announced it would begin offering assigned seats, a massive shake-up to its business model, in an effort to boost its competitiveness.

“We’ve been consistently investing across the airline to modernize our core operation technology, bringing redundancies that helped us navigate around some vendors’ temporary issues,” Chris Perry, a Southwest spokesperson, told CNN.


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