The One Decision That Tanked Southwest Airlines

How did one of the most beloved airlines take such a massive nosedive? We investigate the single decision that left Southwest Airlines saying, "We messed up," while uncovering the details behind Southwest's fall, from epic failures to surprising investments. What went wrong, and what lessons can we learn from their mistakes?

[gregg]

RIP Herb Kellerher. He was on a flight from Dallas to San Antonio back in the early 90’s and came by and said hello to every passenger. No one believes me when i tell them this but i was there. After he left service went into a downward spiral

[BillyL]

almost all of the time when a finance company takes charge, customer service and value goes down hill

[johnh]

SWA, with their low-cost fares, used to be my airline of choice for leisure travel but now, they're just as expensive as Delta, United or American.

[af]

Free bags, no ticket change fees, no expiration dates on unused flight credits still make Southwest my first choice.

[Mat-Ellis]

I was a certified SouthWest fanboi, companion pass holder for 15 years. Within 5 years of Herb’s departure I had switched my main airline. He seemed to keep out the worst habits of the majors, and when he was gone they seemed to take over. More FAs seemed to be ex-major employees and had the attitude to prove it. Even the new CEO, who was a southwest lifer, seemed to just do what the other airlines did. Sad to see. I hope they can come back but I doubt it.

[TheKcrellin]

Computer failures were Southwesr's main problem in 2022. But the worst disaster was losing their way after Kelleher retired. As a flier on SW since 1997, I can confidently say that as soon as he retired you could see lots of little decisions shifting them away from Kelleher's vision. My main concern now is their possible move to assigning seats. Once that happens everything that made SW unique (and the best) will be gone, and at that point all airlines will be equally bad.

[d.carter]

Disappointed to see the focus shift immediately back to shareholders and profits and NOT the customers or the employees.

[ecuador]

I used to fly SWA 100%. Had a friend that worked for SWA for over 35 years retired during the pandemic. After the pandemic the “non-stop” flight I really enjoyed was “discontinued.” I now fly JetBlue that offers the non-stop SWA once offered. Bye-bye- SWA.

Sad. I actually liked SWA’s open seating and SWA priority boarding was easy to get (for a small upgrade in price). SWA had a much simpler pricing strategy.

[yukon]

Southwest had a bad day in Florida. Every airline has them. It's a tough business, unlike Monday morning quarterbacking on the internet. Those pilots who predicted it now make more than the President of the United States. Think that has anything to do with losses? The Southwest business model worked great for 52 years. To scrap it in favor of a system that caused hundreds of airline failures in past years is ludicrous.

Herb said don't go to Hawaii, it's a blooddbath, don't buy big planes, don't hub and spoke. Now a hedge fund is going to fix it? I doubt it.

[Carl-vf]

I too retired from SWA in 2020 after over 30 years of service. I had the great pleasure as did many SWA employees to be personally acquainted with Herb and Colleen. When they retired it did not take long for the new “Leadership” to start making poor choices. Hawaii inter island service, flights to third world countries, embracing DEI WOLK ideology, brow beating Boeing to deliver a new 737 that would not require a new pilot type rating, stonewalling labor in contract negotiations, in my particular case costing me 10’s of thousands in potential retirement investment gains, to name just a few. Now they think emulating their legacy competitors will be an answer to their badly lagging performance. The executives will move on comfortably even wildly wealthy. The working core in the trenches will bear the brunt of the fallout. RIP Herb and Colleen.

[saladlamp]

Kelly's focus on shareholders and paying dividends led SW to the state it's in now. And now Elliot Management (one of its major shareholders) is forcing it to focus on profitability. share price. Seems to me they need to focus on technology, equipment, processes, and procedures. RIP Southwest.

[scpatlnow]

The problem with point to point is if you fly from say DAL to MCI to STL to ATL to MCO with the same plane if something goes wrong in say STL, you dont have a plane (or a maintenance facility) to get everyone back in the air, and if you have a crew change in ATL then they are stuck too as well as the crew in STL that was supposed to be in ATL at the end of the day...now multiply that by thousands of flights and you get an idea of how difficult this type system is to manage.

[emichin]

Southwest Airlines ticket prices are now HIGHER than their competitors. Keep it up Southwest, bankruptcy is on the horizon.

[jerkytoo]

My first experience with SWA was during my early college years when I'd fly back and forth between SF & LA. In the mid-90s SWA and United had a price war and at one point I was getting one-way tickets for $19. It's a crazy-low price now and was a crazy-low price then.

[matthunter]

You gloss over so many things here. One of the biggest tailwinds for SWA was the fact that they hedged fuel prices in the late 90s. Locking in low fuel prices before the huge fuel price increases in the 2000s. When the agreements expired, they lost one of their huge advantages.

[gtobob]

I noticed a big shift in SW in 2020 and 2021. I flew quite frequently with them, 8-12 times a year for several years, and all of a sudden, the staff started treating customers with some distain. After 2022 the prices shot up through the roof and scheduling went into the toilet. As my wife and I are fortunate enough to own multiple homes I finally learned to travel light and just fly with Frontier.

[billyray]

I retired from Southwest after 17 years. Everything he said is true. The shareholders cried and moaned about more money and that’s when the company went downhill. They started micromanaging everything and stopped listening to the employees. It was becoming utter chaos and I took retirement. They are also about as woke as you can get.

[donniearmand]

the new management doesn't really understand the philosophy that make Southwest, a Southwest

[flyingdaytrader]

Assigned seating is a huge turn off for me with Southwest, if they make it so bags arent free anymore, probably wont ever fly them again, even if they are "cheaper". I'd rather fly with United or Delta. Southwest is losing its soul to investors.

[Warmachine_]

Another thing to mention is the lack of the 737 Max7. These are meant to replace the aging 737-700s, but have been delayed for 5 years now. This means Southwest has had to upgage flights to the larger Max8 or -800, increasing the cost of operating these flights without necessarily increasing profits.