The Department of Transportation is looking at Spirit Airlines' operational meltdown
Quick summary
The Department of Transportation (DOT) is monitoring Spirit Airlines' response to its operational meltdown last week, TPG has learned.
A source at DOT, with knowledge of the situation, confirmed to TPG that the department has been in contact with Spirit in regards to the airline canceling as many as 60% of its daily flights over six days last week, "reminding" the airline of its obligations to customers under federal law.
The DOT is also continuing to watch Spirit's response to ensure that it complies with those laws and responds appropriately, a DOT spokesperson confirmed.
Spirit canceled more than 2,000 flights last week — some days canceling nearly two-thirds of its flights for the day — stranding hundreds of thousands of passengers and crewmembers around the U.S. and Caribbean. The cancelations began last Sunday and continued through the week. Spirit's operations had improved considerably by Tuesday, with FlightAware showing less than 20 cancellations as of noon ET.
Under federal law, which is enforced by the DOT, airlines that cancel flights or "significantly" alter a scheduled flight must provide passengers with a reasonable alternative and, if the passenger chooses not to take the alternative flight, promptly provide a refund.
Typically, airlines are also required to have a customer service plan in place — and implement it — which clearly communicates the services it will provide passengers to mitigate disruptions from the cancellations, whether that be rebookings on other carriers, hotel rooms, ground transportation, meal vouchers, or other services.
The DOT is also reviewing customer complaints stemming from last week's cancelations, the source said.
It was not clear whether the DOT or any other oversight body, such as the Federal Aviation Administration or a Congressional transportation committee, would formally investigate the meltdown.
Spirit did not immediately return a request for comment.
Spirit has pointed to a combination of summer storms causing delays throughout July, staffing shortages similar to those that have affected other carriers earlier this summer, a surge in summer travel demand that the airline was ill-prepared to meet, and IT issues.
Everything came to a head during a series of storms at the end of July, as flight crews hit their maximum number of work hours and began to time out, tipping the airline over the edge at a time when there was no more margin for error.
"Right now, all I can say is we're very sorry for what happened," CEO Ted Christie said in an interview with CNBC.
"We've worked hard really over the last five years at both building Spirit and building its reputation," he added to USA Today. "I think we've made tremendous strides. This is not our proudest moment and we know that."
Adding to the difficulties in getting operations running regularly: pilots and flight attendants were left out of position scattered around the country and Central America, and with so many flights being canceled, it was logistically difficult to get them — and aircraft — back to the right places.
"The puzzle ended up getting very complex," Christie said to USA Today.
The financial impact of the crisis is not yet known, but is likely to be steep given the cost of refunds and other expenses incurred by the airline throughout the debacle.
Related: What to do if your flight is delayed or canceled?
The airline relies on a high utilization business model, making quick turns with its aircraft and crews while minimizing any time spent idle on the ground. Data from flight tracking website FlightRadar24 showed numerous Spirit planes on the ground at outstations for more than 14 hours.