A Top Airline Executive Explains The Southwest Airlines Meltdown

Southwest’s IT systems lag other airlines. Their phone systems can’t handle the load. And recovery from a situation where crew are out of place, where the airline doesn’t always even know where crew are, and where flight schedules and staffing have to be rebuilt manually is not only nearly impossible – it’s made harder by operational know-how with a hole in it coming out of the pandemic.

Add on that a lot of people were paid to retire early in 2020. Southwest hired about 16,000 people in 2022. Nearly 20% of their workforce is brand new this year. A lot of that is flight attendants, and other front line employees. But it’s ops people too.

Former JetBlue Senior Vice President and Chief Commercial Officer (and current LATAM Chief Commercial Officer) Marty St. George offered his take on Twitter, focusing on the IT issues and challenges rebuilding something at this scale for an airline.

St. George attributes more of this to weather than I think is fair. And he thinks this is getting more play because you don’t expect it from Southwest the way maybe the Spirit Airlines meltdown last summer did less to harm their brand. But he gets at a piece of this – which is that the airline lacked the tools to effectively rebuild once they lost control of the operation.

They didn’t know where crew were and had to rebuild everything manually and you can’t just do that on the fly.

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community InsideFlyer.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

More articles by Gary Leff »

Comments

  1. Under-investing for the long term — with regards to people, technology, processes and supplies — is a natural consequence of management and the “share`holders’” being overly-focused (and excessively rewarded) with short-term profits and wanting to pocket their profit wins sooner than later regardless of the longer term consequences of cannibalizing the company’s future/long-term outcomes.

    One way to make airlines more likely to better balance longer term results with management and the traders’ focus on pocketing money in the shorter term? Put in place something like EC 261/2004 regulations, as that will make shareholders and management more worried about operational risks hitting customers.

  2. The US (and maybe the whole world) has been chewing up and expending all of the design margin that had been carefully built into it’s collective systems and institutions for the last several decades. We are about to reap what we have sown.

    Southwest is only one of the latest examples. Consider the decline of robustness in the US electric power grid, where rolling blackouts are now common, or Boeing for another corporate example, who is now barely capable of successfully completing upgrades to existing models, and who’s CEO has said they are incapable of starting a completely new aircraft design within the next ten years.

    It also extends to the US government alphabet soup agencies, who have squandered their trust with the US citizens over their desire to engage in widespread partisan politics.

  3. I don’t see how you can conclude that this was other than gross negligence. It seems inevitable that there will be a mass of class action suits to follow. Weather events during the winter holiday rush are predictable. It’s grossly negligent to not be prepared to deal with them and end up canceling over 60% of your flights for days on end while other airlines are keeping cancelations below 10% under the same weather conditions. This is especially the case when you already have had episodes of system failure that should have made SWA realize they needed to downsize their flight numbers and/or change their routing practices until their systems could be upgraded to handle such shocks without becoming unstable. The only question I can see is whether SWA will remain viable given the reputational loss and inevitable payouts.

  4. No reason modern systems should take hours to run these simulations. With cloud based computing, results can come much faster.

  5. A much more cogent explan ation than the one in the story…
    ====================================================================
    Larry Lonero
    9h
    ·
    What happened to Southwest Airlines?
    I’ve been a pilot for Southwest Airlines for over 35 years. I’ve given my heart and soul to Southwest Airlines during those years. And quite honestly Southwest Airlines has given its heart and soul to me and my family.
    Many of you have asked what caused this epic meltdown. Unfortunately, the frontline employees have been watching this meltdown coming like a slow motion train wreck for sometime. And we’ve been begging our leadership to make much needed changes in order to avoid it. What happened yesterday started two decades ago.
    Herb Kelleher was the brilliant CEO of SWA until 2004. He was a very operationally oriented leader. Herb spent lots of time on the front line. 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. When Herb retired in 2004 Gary Kelly became the new CEO.
    Gary was an accountant by education and his style leading Southwest Airlines became more focused on finances and less on operations. He did not spend much time on the front lines. He didn’t engage front line employees much. When the CEO doesn’t get out in the trenches the neither do the lower levels of leadership.
    Gary named another accountant to be Chief Operating Officer (the person responsible for day to day operations). The new COO had little or no operational background. This trickled down through the lower levels of leadership, as well.
    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 8 years because we were still riding the strong wave that Herb had built.
    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. As we saw more and more deterioration in our operation our asks turned to pleas. Our pleas turned to dire warnings. But they went unheeded. After all, the stock price was up so what could be wrong?
    We were a motivated, willing and proud employee group wanting to serve our customers and uphold the tradition of our beloved airline, the airline we built and the airline that the traveling public grew to cheer for and luv. But we were watching in frustration and disbelief as our once amazing airline was becoming a house of cards.
    A half dozen small scale meltdowns occurred during the mid to late 2010’s. With each mini meltdown Leadership continued to ignore the pleas and warnings of the employees in the trenches. We were still operating with 1990’s technology. We didn’t have the tools we needed on the line to operate the sophisticated and large airline we had become. We could see that the wheels were about ready to fall off the bus. But no one in leadership would heed our pleas.
    When COVID happened SWA scaled back considerably (as did all of the airlines) for about two years. This helped conceal the serious problems in technology, infrastructure and staffing that were occurring and being ignored. But as we ramped back up the lack of attention to the operation was waiting to show its ugly head.
    Gary Kelly retired as CEO in early 2022. Bob Jordan was named CEO. He was a more operationally oriented leader. He replaced our Chief Operating Officer with a very smart man and they announced their priority would be to upgrade our airline’s technology and provide the frontline employees the operational tools we needed to care for our customers and employees. Finally, someone acknowledged the elephant in the room.
    But two decades of neglect takes several years to overcome. And, unfortunately to our horror, our house of cards came tumbling down this week as a routine winter storm broke our 1990’s operating system.
    The frontline employees were ready and on station. We were properly staffed. We were at the airports. Hell, we were ON the airplanes. But our antiquated software systems failed coupled with a decades old system of having to manage 20,000 frontline employees by phone calls. No automation had been developed to run this sophisticated machine.
    We had a routine winter storm across the Midwest last Thursday. A larger than normal number flights were cancelled as a result. But what should have been one minor inconvenient day of travel turned into this nightmare. After all, American, United, Delta and the other airlines operated with only minor flight disruptions.
    The two decades of neglect by SWA leadership caused the airline to lose track of all its crews. ALL of us. We were there. With our customers. At the jet. Ready to go. But there was no way to assign us. To confirm us. To release us to fly the flight. And we watched as our customers got stranded without their luggage missing their Christmas holiday.
    I believe that our new CEO Bob Jordan inherited a MESS. This meltdown was not his failure but the failure of those before him. I believe he has the right priorities. But it will take time to right this ship. A few years at a minimum. Old leaders need to be replaced. Operationally oriented managers need to be brought in. I hope and pray Bob can execute on his promises to fix our once proud airline. Time will tell.
    It’s been a punch in the gut for us frontline employees. We care for the traveling public. We have spent our entire careers serving you. Safely. Efficiently. With luv and pride. We are horrified. We are sorry. We are sorry for the chaos, inconvenience and frustration our airline caused you. We are angry. We are embarrassed. We are sad. Like you, the traveling public, we have been let down by our own leaders.
    Herb once said the the biggest threat to Southwest Airlines will come from within. Not from other airlines. What a visionary he was. I miss Herb now more than ever.

  6. @GUWonder: ” Put in place something like EC 261/2004 regulations”

    Don’t labor under the illusion that things are better in the EU. You know absolutely nothing about the situation there.

    What we need is more competition here.

  7. There’s a much simpler explanation: US citizens aren’t owed anything when airlines screw them over, so airlines manage their business to the bare bones.

    This is just the latest example of the high costs of deregulation.

    If Southwest had to pay real money to US travelers it stranded, you bet it would not have deprioritized upgrading systems, skinning on training, firing too many workers, and all the other things it’s blaming for the mess.

    Economics 101 tells you regulation is a requirement to have competitive markets.

  8. L3,

    You’re really more clueless about me than VFTW. I’m more often posting comments to this blog while I’m in the EU than while I’m in the US. I’m a US citizen exempted from stay limits in the EU and fly intra-Europe more than I do WAS-ORD, WAS-MSP and WAS-NYC combined. I spent the majority of the pandemic flying back and forth between the US and Europe and within Europe. Whenever an EU/EEA carrier in the big 3 airline alliances cancels flights or delays me by hours within hours or even days of my originally scheduled departure, I start counting the money and know that I probably won’t need to tap travel insurance policies which I have both from my bank cards and from European home insurance policies which bundle in travel insurance. But everyone is free to continue to spout out of ignorance, so you keep doing you. And I’ll keep pushing for a US version of EC 261/2004 so my fellow Americans and other customers of US airlines get the consumer protections needed to put a systematic squeeze on airline management and the airline “investors” who fail to advance robust operations and customer-friendly policies and instead want to see the airlines’ operational failures become the customers’ financial headache.

  9. SWA has consistently pushed the envelope of keeping costs down and avoiding necessary investments in infrastructure. Their Hawaii operation is a good example. They have been trying to fly inter island and, safe to say, it’s a sketchy operation. In too many ways to list here they have been an embarrassment. Have to wonder how they can recover from this, they certainly can’t try and sell cheap tickets to lure customers back, too many passengers and not enough resources to deal with is what got them in trouble.

  10. I am a bit surprised by Marty’s comments and other opinions. Southwest integrated SkySYM by Optym‘s solution from Amadeus’ Sky Suite. It includes AI-based prescriptive recommendations and is faster than any other solution. Perhaps there was indeed a confluence of many organizational, not IT and weather issues.

  11. While the weather event wasn’t the cause of WN’s problems it’s the final straw that brought the whole thing down. From that point of view the storm is completely to blame. If it hadn’t been this storm it’d be one in the future. It sounds like WN missed a golden time to upgrade systems with lower pandemic loads on the system. What a shame for them

    As far as the EU compensation, I agree that if the US had similar legal obligations to pay customers it could force airlines to keep systems updated and less prone to problems.

  12. The fact that they didn’t, and don’t know where their crews are is the concerning bit. I worked for TWA when 9/11 happened. We knew where our crews were, and those were antiquated systems.

    I read where a 35 year SW captain chaulked all of this up to poor managment at the top not investing in the operation. Gary Kelly was from accounting as well as his COO. They were more interested in the bottom line than making sure the operation ran well. Herb was out there on the front lines paying attention to the operations, and let someone else figure out the money.

    That is what is happening with Transporation in general today, and corporate America. We have put MBA’s, accountants, marketing in charge of our corporations. At my company we are run by a bunch of marketing geniuses. We are no longer a railroad; we are a corporation that happens to be in the Transporation business that happens to run a railroad.

    Take a look at all of these other corporations that have been neglecting their operations and seeking efficiencies and cost savings instead focusing on their core mission. From Hertz to Marriott to American Airlines, and now Southwest. All are controlled and run by people that have no business running those companies that were hired as corporate trainees right out of college. They didn’t do the grunt work; they are above that. They “think” they know how to run an operation, but they never bothered to actually learn logistics through trial and error and from others. To know operations, you need to learn them from the ground up. But try telling that to someone that never did so, that graduated from college direct into an internship at the corporate HQ, then right into accounting. Oh sure, they get rotated into “operational” positions to get “experience”. But supervising the grunts for a couple of years can’t replace being a grunt for 5-10 years.

    This was avoidable for SW, its as simple as that. But here we have another company that valued profit over operations, and now those profits are disappearing as this meltdown continues. Failure to invest and re-invest in your operations will cost you more in the future. Short term returns at the cost of long terms expenses.

  13. The Southwest pilot’s comment here was an example of wonderful writing, a clear understanding of what happened to his company, and a healthy dose of sadness over the current mess. Thank you for putting it all together in one excellent email.

  14. Unions never take ownership for anything. It’s always management

    I would love to see how many pilots refused to come in because they had scheduled time off, how many employees called in sick after the holidays, unions never give up any personal benefits for company or customers. Why isn’t union demanding IT upgrades as part of their contract negotiations? Because it doesn’t put a penny in their pockets

  15. @Ricardo Pilon – Not knowing WN’s I.T. infrastructure, I’d posit – well…guess 😉 – that WN perhaps did not buy the application with full system functionality. A quick look at a Amadeus SkySuite brochure:

    https://amadeus.com/documents/en/airlines/product-sheet/sky-suite-by-optym.pdf

    seems to indicate that these applications can be purchased stand alone. If that scenarios occurred with WN, it’s possible (likely) that – though representing an I.T. upgrade over their legacy systems – there was still a logarithmic handicap that had not been anticipated.

    It’s been my airline industry experience that variations on certain I.T. applications are available, depending on price point for solutions sought.

  16. “No reason modern systems should take hours to run these simulations. With cloud based computing, results can come much faster.”

    Ah yes, the cloud. The cloud can do anything. Except process an entire store’s worth of transactions in less time than the humans did (https://robpegoraro.com/2022/07/08/amazon-fresh-first-look-just-walk-out-then-wait-for-the-receipt-and-hope-its-accurate/) or manage all the tasks involved in driving a car 24/7/365 without any human interaction needed. So there’s no reason to doubt that the cloud couldn’t also handle an entire day’s worth of crew and plane shuffling around weather and other unpredictable events. The cloud can do it all!

    I wonder why no airline yet has replaced its human schedulers with just The Cloud. It would be much cheaper. Perhaps the old maxim “garbage in, garbage out” still holds true. The processing time isn’t the problem, the sheer massiveness of the task(s) – complete with thousands of ever-changing input variables – is the problem.

  17. “I would love to see how many pilots refused to come in because they had scheduled time off, how many employees called in sick after the holidays, unions never give up any personal benefits for company or customers.”

    Yes. It’s employees’ responsibility to sacrifice their own happiness for the sake of their customers and employer. Did they not take vows of poverty and humility when they were first hired? The beatings need to continue until morale improves.

    I never work a minute beyond what my employer pays for, and I insist on taking my approved time off when I said I was going to take it. And why should I do any different? It’s just a job in which I take money in return for giving up my time and effort, and I’m under no false impression that my employer wouldn’t lay me off in a second if it meant more profits or future growth for themselves. Loyalty is a two way street; corporations can reap the distrust and animosity they sowed with their employees.

  18. Cloud computing?? Modern system?
    You can’t expect a system built before Y2K panic was a thing and clouds were what you flew the plane through.

    Just because Boeing still uses floppy disks to update software does not mean. You need to use them in your scheduling software. Probably use dot matrix printers too since you need em at the gate.

  19. I can guarantee you that the person who wrote this and the people commenting have never tried to replace a crew and ops system.

    I have done several and I have also been a part of some failures (ask JetBlue how many times they have tried to replace their legacy crew system).

    And what I can tell you is that it’s like doing a heart lung transplant while the patient is awake.

    And with large legacy airlines like WN there is no off the shelf solution that will meet their requirements.

    So you are looking at YEARS in duration and significant effort to build something that can manage the operation.

    And as far as a recovery tool goes…there is no magic bullet.

    No matter what tool an airline tries to use it will never flawlessly repair the operation.

    What I can

  20. The Southwest pilot’s comment is, I think, spot on. Especially the part about the new CEO inheriting an unholy mess. Unfortunately, he’ll probably take the fall and get ousted even though it’s not his fault, and likely be replaced by some other MBA weenie who chases short-term profits at the expense of long-term viability.

Comments are closed.