JUST WHO IS #southwestairlines? (January 2023)

In no way do my views represent those of any professional relationship I have. They are mine alone and are already somewhere in the public domain.

SO, WHO IS SOUTHWEST CIRCA 2023?

I hesitated writing or saying anything about the unfortunate place that America's most LUVed airline finds itself. This story feels a bit like an airline accident story when many, especially competitors, do not talk about it because they could be next.

But I just read a quote from a long-time industry veteran that suggested the airline will not/does not need to change anything or something like that. Really? Sounds like a consultant looking for work. Doing nothing is not/should not be an option. Period. And that message is for both internal and external audiences. Internal is more important.

The industry sage I quote often, Mike Levine, made this observation: "LCCs can be successful, but they face major challenges in growth. A large LCC tends to be more vulnerable to labor cost pressures and must also compromise its commitment to point-to-point service to grow past the limits that route density places on those airlines".

That prescient view is 30 years old.

Before I begin this post in earnest, Levine made reference to point-to-point. Industry watchers have made clear that Southwest is no longer that. Rather, they connect traffic at various nodes around their system.

I lost any credibility I might have had last week. Confession, yep, Southwest does connect traffic.

On 12/27/2022, I spent some time talking to #MarkBelko at the #PittsburgPostGazette as the story was in its infancy. I said some things that were not intended to mislead the reader, but rather be true to my understanding of the business, like:

- “I just believe their issues are a lot deeper than a snowstorm”

- “Their network is designed very differently. They had people stuck in places [where there were no airplanes]. It’s going to take them much longer than a hub-and-spoke network to regroup”

- “It’s one thing to be a 300-plane company. It’s another thing to be a 700-plane company. Growth is good. But I think they outgrew their ability to deliver the product they promised,”

- “My fear is that they have outgrown who they were. They are going to need to do some introspection on what needs to be fixed in order to make them what they were”

- “I don’t think these problems just began today. They’ve been showing up for some period of time,” adding that the latest “really exposed the weaknesses that are in place at Southwest.”

The #AirlinesConfidential podcast asked me about the next 10 years, and I said the story would be Southwest - wondering if it would be the same disruptor, it had been over the last 40 years. Did not see this coming.

In my last MIT lecture in June '22, my ranked list of 10 issues to watch included things ranging from the economy to the consumer to business traffic. I ranked workforce and Southwest as tied for #1.

Watch this space.