Delta Air Lines’ top executive pledged fixes in the wake of last week’s storm-induced meltdown of operations, which he said stemmed from a highly unusual weather event that simply swamped the company’s ability to quickly recover.
“To our customers, we apologize for the disruption to their schedules,” CEO Ed Bastian said in his first public remarks since the April 5 event that triggered 4,000 flight cancellations over several days. He said the event provides “fertile ground” for improvements.
Delta also said many passengers will be eligible for miles or travel vouchers, based on the severity of their cancellations or delays. Details are still being worked out.
Bastian acknowledged during his comments in the company’s quarterly financial update that the company needs to spend more on improved crew scheduling and information systems, though he added the problem was not understaffing.
The cancellations will take a $125 million bite out of Delta’s profits, due to both lost revenue and storm-related costs, the airline said. By comparison, Delta took a $150 million hit Delta from a computer outage last August that forced 2,300 flight cancellations.
Bastian also apologized to employees, writing in a memo this week: “We let you down, and I want to let you know we are taking steps to restore your confidence.”
“Thousands of our customers have been inconvenienced and frustrated during this situation,” Bastian wrote. “I have personally heard from many of them who feel like Delta let them down.”
About 30,000 of Delta’s 80,000 employees are based at the Atlanta headquarters, call center or Hartsfield-Jackson hub, which Delta has built into the world’s biggest such operation.
“Your dedication to your jobs, our customers and each other was the shining light amid the storm and it is your hard work that kept a bad situation from becoming even worse,” Bastian wrote. “I want to apologize to all of my Delta colleagues for putting you in this position.”
Bastian largely blamed the logjam on an unusual, daylong string of storms that raked Hartsfield-Jackson, giving the airline no chance to recover in between.
“There were seven different thunderstorm cells that happened at a rapid-fire basis starting from early morning to evening,” Bastian said. “We had the virtual shutdown of Atlanta for the better part of the entire day,” combined with busy spring break travel that left little room to rebook customers.
He said it was an “impact that in my 20 years at the airline we’ve never seen.”
A National Weather Service aviation services meteorologist, Patricia Atwell, said the average duration of thunderstorms over the Atlanta airport in April is 78 minutes, based on a climatology study of the years 2003-2013.
Last week’s thunderstorms included a stretch of 4.5 to 5 hours in the morning, followed by another that lasted around 3 hours in the evening, she said.
“It’s hard to recover from those type of events,” said Atwell, who works in the agency’s regional office in Peachtree City.
“If there’s any thunderstorms around the complex, around approach or departure they have to shut down. The planes can’t fly through that,” Atwell said.
Atwell said the Weather Service held a conference call on the morning of April 4 on its expectations for up to three thunderstorms, then issued a forecast at around 2 p.m. saying it expected showers over the airport at 8 a.m., with possible thunderstorms from 9 to 11 a.m. and 1 to 4 p.m. Expectations worsened by 8 p.m. Tuesday night.
Unprepared for storm
Despite the worsening forecast, Delta did not waive change fees to allow passengers to reschedule trips to avoid the effects of cancellations and delays, as it does before many storms.
“When we have snowstorm we typically get out of the way and let the weather pass,” Bastian said. With this thunderstorm, he maintained, “we were not able to get out of the way.”
“We certainly take full responsibility for making this better in the future,” Bastian said, including improved crew tracking and communication. Many crews and aircraft were out of place after the Wednesday storms, extending the disruption for days while pilots and flight attendants were reassigned.
Bastian, a Delta veteran who became CEO a year ago, said the airline’s computer systems worked “throughout” the event — unlike the August episode and a smaller disruption a few months later.
“It wasn’t a question that the IT didn’t work,” he said. “It actually worked and it worked as designed. It got overwhelmed.”
Bastian said the flight schedule had to be “put together on the fly at an unprecedented level of volume.”
While Bastian did not make a public appearance or statement during the cancellations, Delta said the CEO was fully aware of the details and that all of the senior department leaders were working at the Atlanta headquarters.
Delta spokesman Ned Walker said the company’s chief operating officer, Gil West, will do “a complete deep dive across the organization to find out lessons learned across all the different divisions.”
Bastian spoke Wednesday as the airline posted a $603 million profit for the first quarter of 2017, a decline from last year driven by high fuel prices. Delta logged a $4.4 billion profit for 2016.
Bastian also commented on the United Airlines bumping incident that went viral this week after a passenger on a regional affiliate’s flight between Chicago and Louisville was dragged off to make room for a flight crew member.
Bastian said he does not favor more regulation of overbooking and bumping by airlines, as suggested by New Jersey Gov. Chris Christie, who called for at least a temporary ban on the practice.
“I don’t think we need additional legislation to try to control how the airlines run their businesses in this space,” Bastian said during Wednesday’s conference call on the company’s quarterly results.
“It’s not a question in my opinion as to whether you overbook. It’s how you manage an overbooked situation…. The key is managing it before you get to the boarding process, and that’s what [Delta] has done a very effective and efficient job at.”
Bastian called overbooking “a valid business process. There’s operational considerations behind that.” He added that “there are things that happen that create overbooking situations beyond just pure oversales,” citing weather delays and weight-and-balance issues.
Airlines overbook some flights to offset expected no-shows, typically by business fliers who use refundable fares or switch flights. Most overbookings are resolved by offering future trip credits to passengers who volunteer for later flights, but a small percentage of bumpings are involuntary.
Bastian said Delta passengers are involuntarily bumped at lower rates than at many other major airlines.
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