by Richard N. Velotta, Las Vegas Review-Journal, January 7, 2023
Are you done with Southwest Airlines, after your Christmas and New Year’s travel was ruined by the busiest airline serving Las Vegas?
You shouldn’t be. Southwest is expected to undertake a technology upgrade that would fix some of its longtime operational issues.
While a massive winter storm was initially blamed for Southwest canceling an estimated 16,000 flights over a four-day period, the airline’s problems are much deeper, according to a Southwest pilot, who turned to Facebook to explain the meltdown that occurred last month, and an aviation expert, who has been tracking Southwest for decades.
“It’s really simple,” said Mike Boyd, president and CEO of Boyd Group International, an Evergreen, Colorado, aviation consultant. “They have a crew scheduling system that wasn’t adequate for the meltdown. Southwest could not manage its crews and its airplanes in this meltdown. That’s all there was to it.”
Boyd’s comments validate statements made by Southwest pilot Larry Lonero, whose social media post went into great detail about his theory on what happened.
“Many of you have asked what caused this epic meltdown,” Lonero said on Facebook. “Unfortunately, the frontline employees have been watching this meltdown coming like a slow-motion train wreck for some time. And we’ve been begging our leadership to make much needed changes in order to avoid it. What happened … started two decades ago.”
The good news from Boyd is that he’s not only optimistic but certain that Southwest will turn things around within two months. But it’s going to take hundreds of millions of dollars to fix the problem, he said.
Restoring customer trust
Sure enough, Southwest CEO Bob Jordan made a public announcement last week that the airline has begun efforts to restore its customers’ trust.
The first step is compensating customers for their losses and reuniting checked luggage with its owners. The next will be technological upgrades to Southwest’s operations software.
Southwest was co-founded by the legendary Herb Kelleher in 1967.
Kelleher, one of the most brilliant airline executives I’ve ever interviewed, was a hands-on operations guy. He’d spend time in the trenches with his frontline workers and earned their admiration and respect.
“He always had his pulse on the day-to-day operation and the people who ran it. That philosophy flowed down through the ranks of leadership to the front-line managers. We were a tight operation from top to bottom. We had tools, leadership and employee buy-in. Everything that was needed to run a first-class operation,” according to Lonero.
He said Kelleher would always say the biggest threat to Southwest would be from within and not from competitors.
When Kelleher retired as CEO in 2004, the reins were turned over to Gary Kelly, an accountant by training and a person more focused on the financial aspects of the airline than its operations.
“They all disengaged the operation, disengaged the employees and focused more on return on investment, stock buybacks and Wall Street. This approach worked for Gary’s first eight years because we were still riding the strong wave that Herb had built,” according to Lonero.
Kelly didn’t ignore operations but certainly gave more attention to keeping the airline’s stock — LUV, on the New York Stock Exchange — in a strong position.
Operational deterioration
Lonero explained in his post: “But as time went on the operation began to deteriorate. There was little investment in upgrading technology (after all, how do you measure the return on investing in infrastructure?) or the tools we needed to operate efficiently and consistently. As the frontline employees began to see the deterioration in our operation we began to warn our leadership. We educated them, we informed them and we made suggestions to them. But to no avail. The focus was on finances, not operations.”
After a few scrapes with operational problems in the late 2010s, some of the software inadequacies became apparent.
With the COVID-19 outbreak, airlines, including Southwest, scaled back operations to rescue it from a major meltdown. As travel started to come back, Southwest began growing, promising more flights than ever before at Harry Reid International Airport.
Kelly retired in 2022, turning the airline over to Jordan, a more operations-oriented leader. Jordan knew of the technological inadequacies facing the company and began strategizing how to fix them.
Boyd said he was impressed with the way Jordan got out in front of the meltdown mess.
Jordan’s statement last week referenced some of that strategy.
“Our leadership team is focused on a thorough review of the disruption with all the needed resources involved, and I expect that work to be completed swiftly,” Jordan said. “We’ve already taken immediate actions to mitigate the risk of this ever happening again, and the review work will inform additional actions and investment as well. We’ve asked our unions to participate in this review effort as well, and likewise we are in regular communication with our board of directors.
“As a company we spend about $1 billion a year on technology. And we will continue to upgrade the tools and processes our employees use to serve you, our valued customers, and make sure those items deliver on our mission: to connect people to what’s important in their lives through friendly, reliable and low-cost air travel. We have a proud 51-year history of doing just that, and I’m confident we’ll continue to deliver on this all-important promise.”
A big apology
Jordan adopted the all-important crisis communications strategy of telling the public how sorry the airline was to have failed the public.
In the meantime, it’s incumbent upon our local airport and Las Vegas Convention and Visitors Authority to continue to recruit additional service to compete with Southwest.
Frontier Airlines has taken steps in that direction, and Boyd says to keep an eye on JetBlue, which recently acquired the assets of Spirit Airlines and could bump up the competition.
As for Southwest, the nation will be watching to see if they deliver on their promises.
Maybe the airline should adopt a slightly-tweaked version of the “Love Story” movie catchphrase that was popular around the time Southwest was spreading its wings: “‘LUV’ means never having to say you’re sorry.”
Contact Richard N. Velotta at [email protected] or 702-477-3893. Follow @RickVelotta on Twitter.