The End Is Nigh for Southwest Airlines

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Intro - 0:00
Southwest’s History of Success - 2:19
External Problems - 3:45
Internal Problems - 4:56
A tricky path forward - 7:03
Shaking Things Up - 8:28
A Daunting Challenge On The Horizon - 9:49
Closing Thoughts - 12:49

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Everyone loves Southwest. In a world where many airlines nickel and dime their passengers, this quirky carrier has done things different. They offer a consistent and pleasant on-board experience, all without charging the kind of hidden fees that have permeated the airline business. It’s no wonder, then, that they’ve built such a loyal following.

But do you know who doesn’t love Southwest? Its investors. There was a time when Southwest was a money-printing machine. But over the past 5 years, its profits have tanked. So, what’s going on? Why is Southwest - this industry darling - struggling so much? And, more importantly, is there anything they can do to turn things around? Let me explain…

#southwest #swa #aviation #boeing #737max

[bryanspringsteen]

Thx Southwest for NOT jumping on that "let's squeeze every penny for everything out of the people"-wagon!!!👋🏻👋🏻👋🏻

[yugeno]

I fly Southwest for a reason. If they get rid of all the things that make them 'Southwest', then it's hard to see the result being anything other than a race to the bottom.

[ksegg_ffs]

So Southwest is failing because they refused to be greedy?

We live in weird times.

[PerhapsNoodle]

Loyalists don't fly Southwest because it's cheaper (it's really not). I want to be treated fairly.

Coby was wearing a Costco hoodie in the video. Southwest is the Costco of the skies. Not the cheapest, but they are fair and they stand behind what they sell. I can book, cancel a flight up to 10 minutes before, and rebook online without any fees or "phoning the call center".

Several times I was proactively refunded for my onboard WiFi when Southwest detected it "didn't work well" on my flight. I can't think of another single company that operates this way.

[SI-lgvp]

I'm a retired SWA captain and enjoyed a great career there. What is missing is Herb Kelleher. Herb was loved by all, and he could motivate all for any objective for the company. Look back at the Tripel Crown Award, and all the major carriers SW look a likes we did battle with. He motivated the employees with a simple promise when we achieved 5 years of the award he would dedicate a plane with everyone's name on it. Herb's culture influenced everything at the airline, and made working there fun, and making it a great airline. Gone are the days of the meaning of Herb's Red Belly Warbirds.

[maxon]

Imagine living in a time where acceptable customer service is considered “quirky” and “antiquated.”

[Erik_The_Viking]

Two words: private equity. They destroy everything they touch.

[chellem]

I flew on Southwest for the first time visiting my daughter in Louisiana during the Thanksgiving holiday, and I really enjoyed the ride and the hospitality of the flight attendants. The free bag policy is a definite perk for me. Although they don't assign seats, I brought an early bird check-in position. That gives me the option to pick a good seat. The experience was great going and coming back. The Captain was very pleasant he told all those on the left side of the plane to look out the window and see the Freedom tower and the Statue of Liberty on my way back home to N.Y. I thought that was very nice for those who was new visitors. I definitely will be flying Southwest again.

[retiredgamer]

6:55 "Southwest has failed to maximize its ancillary revenue" That's a poor way to phrase it. You make it sound like it's a bad thing that Southwest maintained decency by not penny-pinching ripping off passengers for every cent they can out of what used to be complimentary standard services before the likes of spirit and AA unleashed the plague upon air travel. The day Southwest starts charging baggage fees is the day I cash out and close out my Southwest account.

[arthuralford]

The real villains here are Elliott, who will tear the guts out of Southwest in the name of "profitability." You're right, people have a loyalty to Southwest-I do. Two bags free, seating choices that you don't have to pay extra for, staff who are consistently the best and a good on-time status-things that matter to me. If they become another airline that charges for bags and seating and lowers the quality of service in the name of profits, then it becomes a matter of which bad experience among the airlines is the cheapest?

And I doubt Elliott will spend the millions to integrate Airbus into their fleet-they'd rather use it to pay their managers fat bonuses

[dodleboper]

Southwest was profitable for 46 years straight with open seating, no business class, and no baggage fees, so maybe that isn’t their problem. Maybe the problem is that the one type of jet they use finally bit the dust and they ruined their reputation when they couldn’t schedule flights after a snowstorm.

[sgbuses]

The moment SWA starts charging for bags and seats, they might well as repaint their planes yellow (and perhaps buy their planes) because it would be no different from any other budget airline.

[BADonnelly]

I work for a large US legacy carrier and remember as a new hire in 1996, management describing Southwest as a niche player and not really being a competitor. Over the years after Herb Kelleher’s retirement, I thought that SWA would be profitable if they maintained Herb’s discipline with point to point, no frills service to second tier domestic airports. However, SWA decided to move into the legacy carrier’s full service international routes out of first tier (costlier) airports. If SWA returned to the formula that made them domestic leisure traveler powerhouse, I think they could withstand whatever transition pain inevitably will happen as 737s phase out. That could be way into the future so they have time to plan.

[sdstreiker]

No, they HAVE had control over Boeing's strategy. They have forced Boeing to stay with old outdated systems on 73 to avoid the necessity of a new type rating.

[hensonk]

It's becoming a pattern for large companies to treat CEO and shareholders super well but paying customers as a garbage

[PJWestfield]

A large part of Southwest's previous profitability was their purchasing of long term fuel contracts to offset rising fuel costs. That is no longer the case.

[ryanwilliams]

My girlfriend and I took four flights with SWA this year across the states. BUF - BWI, BWI- BNA, BNA - LAS, LAS - LAX. Only one of the planes was full and the other three were less than 50% full. Great for us as passengers, terrible for SWA. Super nice crews and vibe to the airline, but I can see why they're struggling.

[thedownwardmachine]

If customers love your company, but investors hate it, then maybe the customers need to become the investors. Like a customer-owned co-op.

Maybe it sounds crazy, but there aren't any other customer-owned co-op airlines, so we really don't know if it will work.

[amigajoe]

I’m a loyal Southwest customer. I think it would be reasonable for them to switch to a one free bag instead of two policy.

[jandnoc]

I agree. Just cause everbody else does things one way, doesnt mean its a good strategy. SW has a niche and specific customer base who are very loyal to them BECAUSE they dared to use a different stratagey. The shareholders are short sighted and only care about the moment. But if for 20-30 years before covid, every. single. yea., they made profit, they were obviously doing something right....