Tech Glitch Leaves Southwest Airlines' Best Customers in the Lurch

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Last summer, Southwest Airlines (NYSE: LUV) suffered a major technology outage. This forced the carrier to cancel about 2,300 flights over the span of four days during the height of the peak summer travel season.

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In the past week or so, Southwest has encountered another IT glitch. This time, the problem is that many A-List and A-List Preferred customers aren't getting the boarding priority they are entitled to. While the scope of this issue is much smaller -- it isn't causing any flight delays or cancellations -- it is negatively affecting Southwest's best customers. That's troubling, because these customers' loyalty is critical to Southwest Airlines' success.

Boarding early is important at Southwest Airlines

Southwest Airlines is unique among U.S. airlines in having an open seating policy. Instead of assigning seats in advance, Southwest gives each customer a boarding position in one of three groups: A, B, and C. Within each group, customers are assigned numbers between 1 and 60. The A group boards first, in numerical order from 1-60. The B group boards next, followed by the C group (also in numerical order).

Fliers with boarding positions early in the A group have the best shot at getting desirable seats, e.g. window or aisle seats near the front of the plane or exit-row seats that have more legroom. Meanwhile, anyone with a C group boarding pass is likely to get stuck in a middle seat -- and also might have to check their carry-on bag if there isn't space left in the overhead bins.

Not surprisingly, frequent fliers care about getting the best possible boarding positions. To accommodate them, Southwest Airlines reserves positions near the front of the A group for customers who buy pricey Business Select fares and those with elite status.

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Frequent fliers lose a big perk

To receive A-List status, Southwest Airlines customers must complete 25 one-way flights or receive 35,000 tier-qualifying points in a calendar year. (The latter is equivalent to spending at least $2,917 on airfare. Customers buying the cheapest class of tickets would have to spend nearly $6,000 on airfare to accumulate 35,000 points.) The hurdle for reaching A-List Preferred status is even higher. Thus, customers with elite status are very valuable to Southwest Airlines.

A-List and A-List Preferred customers are supposed to automatically receive upgraded boarding positions. Unfortunately, beginning on Aug. 11, Southwest's IT system mysteriously stopped providing these status-based upgrades for many elite customers. According to the company:

There is currently an ongoing issue affecting priority check-in and Tier Member boarding positions for Southwest's Rapid Rewards Frequent Flier program. This has resulted in boarding positions that are less typical than what our A-List and A-List Preferred Rapid Rewards Customers have come to expect. Our Technology teams are worked [sic] feverishly to resolve the issue which has not caused any cancellations or flight delays. We apologize for any inconvenience to our Customers.

Indeed, this glitch has caused many A-List and A-List Preferred customers to receive boarding positions in the B and C groups. Southwest does automatically allow elite-level frequent fliers to board between the A and B groups, but by that point, most of the aisle and window seats in the front of the plane would typically be full.

A fix has been slow in coming

The current IT glitch may be related to a new reservation system that Southwest rolled out a few months ago. The new system will provide huge long-term financial benefits, but Southwest Airlines CEO Gary Kelly has acknowledged that there have been some short-term issues that need to be fixed.

While Southwest noticed a week ago that elite customers weren't receiving the proper boarding positions, it still hasn't managed to find the root cause of the problem. That said, by Wednesday, Aug. 16, it had partially fixed the issue. A Southwest Airlines spokesperson stated:

We are seeing steady improvements as we continue our work to fix an issue affecting check-in/boarding positions for our valued Southwest Rapid Rewards Tier Members. We're aware some Customers, a shrinking number by the hour, are still getting boarding positions that do not reflect the benefits that come with their hard-earned status. We want to thank our valued Customers for hanging in there with us while we work on a solution that ensures all our A-Listers feel the LUV they're accustomed to receiving from Southwest!

Many of the customers who continue to be affected are remaining patient. However, others are understandably upset that Southwest Airlines hasn't been able to completely fix this glitch.

Southwest Airlines doesn't have a great temporary solution

Aside from reminding elite fliers that they are entitled to board between the A and B groups, Southwest Airlines has taken two steps to accommodate affected customers.

First, Southwest will manually fix reservations that aren't showing the proper elite status. Thus, customers can check their accounts in advance and call customer service if A-List or A-List Preferred status is not listed for upcoming flights. Second, the carrier is offering 1,500 Rapid Rewards points per affected flight to customers who haven't gotten the proper boarding assignments.

Still, calling customer service to update each reservation is inconvenient. Meanwhile, many elite fliers would much rather board first than receive some extra points.

Southwest Airlines has accumulated a lot of goodwill over the years, due to its high-quality service and customer-friendly policies. Most people with elite status are likely to give the carrier a pass for its latest IT glitch, despite the inconvenience. Nevertheless, Southwest needs to do better in the future -- before its best customers finally run out of patience.

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Adam Levine-Weinberg has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.