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The New York state pension fund overseer has asked Southwest Airlines to explain how it plans to prevent future operational catastrophes, like the one over the holiday season

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Travelers walk past the Southwest Airlines check-in counter at Denver International Airport on December 28, 2022 in Denver, Colorado. More than 15,000 flights have been canceled by airlines since winter weather began impacting air travel on December 22.Southwest Airlines faces up to $825 million in losses from its recent operations meltdown.

Michael Ciaglo/Getty Images

  • The New York State comptroller pressed Southwest Airlines to explain how it plans to avoid another operational meltdown.
  • The carrier canceled more than 16,700 flights between December 21 and 31, amid the holiday travel season.
  • Southwest estimated the meltdown in December will cost the airline $825 million.

The overseer of one of the largest public pension funds in the US is demanding an explanation from crisis-hit Southwest Airlines — New York State Comptroller Thomas DiNapoli wants to know how the carrier plans to prevent another operational meltdown that caused the recent holiday travel chaos.

“Clearly this crisis has resulted in profound customer dissatisfaction and is expected to generate significant costs to the company,” DiNapoli wrote in a letter to Bob Jordan, the CEO of Southwest Airlines, the Wall Street Journal reported Monday.

In the letter, DiNapoli also asked the carrier how it plans to “correct these failures – not just in the immediate term, but for the coming years,” per Reuters.

The New York state pension fund is one of the top-100 largest investors in Southwest. As of September 30, it held $17.6 million worth of Southwest stock, or about 0.1% of outstanding shares, according to Refinitiv data. The comptroller’s office oversees the fund. 

Southwest canceled more than 16,700 flights between December 21 and 31 as the busy holiday travel season collided with a major winter storm, an outdated scheduling system, and an unconventional flight structure. 

Last Friday, Southwest estimated the meltdown in December will cost the airline up to $825 million, including lost revenue and passenger reimbursements. The carrier expects to post a net loss for the fourth quarter.

A spokesperson for the comptroller’s office told WSJ it’s waiting for a response from Southwest, but had no immediate plans for action. A Southwest spokesperson told the media outlet it has received the letter and is working on a response.

The New York State Comptroller office and Southwest Airlines did not immediately respond to Insider’s requests for comment sent outside regular business hours.

Read the original article on Business Insider
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