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
- 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.
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 told Southwest CEO Bob Jordan in a January 6 letter seen by Insider. The Wall Street Journal first reported the news on 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."
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than 16,700 flights between December 21 and 31 as the busy holiday travel season collided with a major winter storm, an outdated scheduling system, and an unconventional flight structure.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 Insider it's waiting for a response from Southwest, but had no immediate plans for action. A Southwest spokesperson told Insider it has received the letter and is in the process of responding to it.