Andrew Watterson
Chief Operating Officer at Southwest Airlines
Thank you, Bob, and hello, everyone. I will focus the majority of my comments on the operational disruptions to provide some additional color to what Bob shared. We experienced a historic event with a combination of challenges we hadn't experienced before. However, as Bob mentioned, our crew scheduling software didn't stop working during the disruptions, but a combination of our processes and technology couldn't keep up with the pace of cancellations at the height of the weather disruption. That forced crew scheduling into fully manual mode to develop solutions, and they simply couldn't keep up with the volume of changes.
Based on what we know today, it appears that the last domino to fall was when we can no longer use our automation for crew scheduling. Automation works very well for us. But when a problem gets dated, the automation doesn't have the ability to look backward as it tries to solve future problems. To simplify, the decision support tool helps us solve two issues. One, repair the assignments of individual crew members; and two, solve coverage problems for individual flights by reassigning crew members and using reserve crew members. If a crew member's individual schedule is not repaired before the next assignment begins, then we aren't able to use the automation to repair the individual schedule. Consequently, without updated crew members schedules the software can't reassign crew members to solve for flights with crew coverage issues. So, the disruption uncovered a functional gap in our technology. However, this issue is in the process of being addressed.
In terms of the moving parts of our point-to-point network, you can think of it in three buckets. You had the flight network, the aircraft network and the crew network. We feel very confident in the flight network and schedules we have published for sale and we are very adequately staffed to operate our fourth quarter flight schedules. We feel very confident in our aircraft network and we have a sophisticated technology product that we call The Baker, that produces new aircraft solutions during irregular operations. At no time during the disruption did the point-to-point journeys of the aircraft present us with an unsolvable problem.
For our crew network, the functional gap that was revealed in our crew scheduling software is in the process of being addressed and should be updated in a matter of weeks, which represents quick work by GE Digital and our teams to address the most notable cause of the event that we are currently aware of.
So, in terms of where we go from here to prevent it doesn't happen again, our actions fall into three buckets: immediate mitigation efforts and with the last domino to fall, department level assessments and actions and systemic review, supported by a third-party. Bob covered the immediate mitigation efforts implemented, our dashboard, supplemental staffing, crew communication tool enhancements, etc., he also covered the third-party review of the events and the Board's involvement in working with management to oversee our response. I want to briefly cover the second bucket, which is department actions.
Each department has undertaken its own analysis to identify additional measures the departments can make to improve its management of significant disruptions, while leaving the cross departmental improvements to the systemic analysis conducted with a third-party. Some examples of the department efforts include implementing a new crew scheduling phone system targeted for Q1 of 2023, creative network disruption pod in the NOC or network operation control center to better integrate crew data into flight cancellation decisions, increase the number of crews schedulers, evaluate our cold-weather preparedness and items such as assessing the IP [Phonetic] procedures, protocols and tools to increase throughput, ensuring we have sufficient ground support equipment fuel that is viable and sub-zero temperatures. This wasn't meant to be comprehensive either, just to share you we have -- share with you that we have already identified some smaller-scale opportunities for improvement. And we will have taken actions even before we get to the third-party recommendations.
But in terms of the review by Oliver Wyman, we think it is a viable exercise to understand how the accumulation events led us to the final result. And we still want to see if there are opportunities to improve performance on bad weather days to integrate into our modernize the operation efforts.
We recently had an opportunity to test some of the new mitigation efforts implemented recently joined the FAA technology outage earlier this month, with the notice to air missions or NOTAM System. Our NOC worked around-the-clock in constant contact with the FAA and the industry to make sure the NOTAM info was restored and valid before we pushed any of our flights. We took the time to ensure verification, safety and compliance, which is why we did not dispatch flight before the FAA grounds up, and there is another example that we will not sacrifice safety. We did not sacrifice safety during the December event, the NOTAM event and we simply won't going forward. Safety is paramount. And we use our new warning indicators. We deployed additional headcount to assist crew scheduling, even though we didn't end up meeting them. And we executed cancellations that help protect how we ended that day to assure a good start the following morning. So, when we had a difficult start to that day, thanks to the swift actions taken and enhanced processes in-place, we were Number 1 in the industry on on-time performance the next day.
Part of the organizational changes when I stepped into the Chief Operating Officer role was to combine the network planning with the operations functions in order to further align commercial and operational objectives. And we recently announced a related org change by promoting Adam Decaire, former VP, Network Planning to SVP, Network Planning and Network Operations Control. The goal of this move is to create a tighter feedback loop between scheduled design and schedule execution in order to add resiliency and reliability to our network. This is another action that I believe will help us tremendously.
Since the disruptions in late December, our operational performance has been solid. The month of January has seen several ATC outages, historic precipitation in California, where we are the largest carrier, and multiple snowstorms in Denver. Through Monday 23rd, we are Number 2 in on-time performance out of 10 Airlines, trailing American Airlines by less than 1 percentage point. As a reminder of what we shared at Investor Day, I want to recap two areas, our operational focus areas and our capacity plan.
First, much of what we're talking about in terms of operational improvement and technology upgrades, I addressed at our December 7th Investor Day, in particular in the areas of operating quality and frontline staff and tools. In the area of operating quality, I noticed a focus area called network design recovery. While it was not planned as part of our 2023 delivery at that point. We had begun work in that area at the time of Investor Day. We had already selected Oliver Wyman to assist us beginning this January. As part of our reevaluation of our 2023 priorities, we will accelerate this work.
In the area of frontline staff and tools, I noted focus areas of mobility flash digital tools and continuous improvement. Again, these weren't specifically slated to deliver by the end of 2023, but we will be evaluated again as part of the reassessment of our plans given the challenges with crew communications we experienced. I want the third-party to review to conclude before I opine on what exactly needs to be done and over what timeline where we have good line-of-sight to potential improvements in civil operations areas that span multiple years including 223. Now we need to finalize our plan for 2023 and determine what sequence of improvements are most appropriate in terms of technology and tools investments.
And secondly, our 2023 capacity growth is now up to 16% to 17 year-over-year. But this is apples-to-apples in line with the old 15% that we outlined at Investor Day. Nothing has materially changed in our capacity plans for this year. The increase is simply due to lower capacity in Q4 2022 due to the flight cancellations. We were headed all along toward network restoration and the December events had nothing to do with staffing levels or capacity plans. Speaking of 2023 capacity plans, it is nearly all going back in the key Southwest markets and adding market depth. These are markets that we borrowed from to fund new airport expansion in the pandemic. And as leisure demand remains strong and business demand improves, we have opportunities to build this back up. And this is lower-risk capacity growth, primarily in markets where we have the Number 1 or Number 2 share and a strong Southwest Airlines customer base.
Our goal is to other the network fully restored by the end of 2023. And by summer 2023, we should be about 90% done. And in doing so, it should help fortify the operation with better itineraries, depth and re-accommodation options for customers, crews and aircraft. We do have weather or delays that create regular operations. So, we plan to continue our investments in the network this year.
And on the topic of 2023 schedules. Last month, we extended our flight schedule for sale from July 11th to August 14th, this includes a depth in the Southwest points of strength as well as bringing back longer-haul markets, all part of our continued network restoration and accounts for anticipated travel demand for the peak summer travel periods.
Denver grows at just over 300 flights a day, the highest-ever daily total count for any Southwest airport and Baltimore hits approximately 220 departures, which is higher than summer 2019. We will peak with total daily flights of nearly 4,400 in July of 2023. Our next schedule through October 4th will be published on February 9th.
I want to wrap-up by reiterating that we are intensely focused on reducing the risk of repeating the type of operational event we had last month. And we're also focused on moving forward and running a great operation each and every day. So, while there will be lessons learned, we aren't losing focus on the facts on the blocking and tackling that is necessary to efficiently operate our network. I'm confident that our people will continue to do just that. I'm thankful for their focus of running a safe and reliable operation and providing excellent customer service to our customers.
Finally, I would be remiss if I didn't commend our negotiating teams of TWU557, who represent our flight instructors and AMFA, who represents our facilities maintenance technicians. These negotiating teams worked tirelessly to reach agreements for their memberships and I am pleased we can reward these employees with well-deserved pay increases and quality-of-life enhancement. I'm also pleased that we reached -- just recently reached a tentative agreement with TWU550, who represents our flight dispatchers and they will be voting on their TA soon. We continue negotiations with the unions representing our other work groups that wait a tentative agreement to vote on, and we intend to continue to pay competitive market compensation packages to our employees.
So with that, I will turn it over to Tammy.
