Southwest Airlines (LUV) – Get a Free Report there was a high-profile collapse over the holidays that left tens of thousands of passengers stranded. The airline has since repeatedly responded to these issues.
First, Southwest blamed the weather — and while the storms caused the problem, it was clear from how other airlines operated that something deeper had gone wrong. Southwest then dropped the ball on apologizing and compensating its passengers who were stranded, had to rent hotel rooms or find another way to get home during the busy holiday season.
It was a series of mistakes that angered customers and made them question whether they trusted the airline. This is a big challenge for a company that has built its reputation on being honest and transparent with its passengers.
In fact, people only have so many options when it comes to air travel. This means that even if people are wary of flying Southwest, the combination of the airline’s cost and the fact that it flies to so many destinations will probably make them do it.
That’s good news for Southwest, but the airline has a problem that goes deeper than software. Southwest’s pilots are angry with the airline and are being very vocal about it.
Southwest Airlines has a pilot problem
The Southwest Airlines Pilots Association (SWAPA) released a scathing letter that began by sharing two quotes, one addressing the philosophy on which Southwest was founded and the other addressing where it is now. The first was from the airline’s founder, Herb Kelleher.
“You put your employees first. If you really treat your employees this way, they will treat your customers well, your customers will come back, and that’s what makes your shareholders happy. That is, there is no constituency that is at war with any other constituency. Ultimately, what you produce is shareholder value,” said the company’s founder and former CEO, who died in 2019.
The second quote came from current chairman and former CEO Gary Kelly.
“It’s arguable that our shareholders have been suffering from returns for a long time, and our employees have been very well taken care of,” Kelly said.
The airline’s pilots clearly do not believe that the company will continue to implement these ideas. SWAPA’s leaked letter dealt a bold blow to the current administration.
“How did we get here? How did we go from the most stable and profitable airline in history to the biggest collapse in airline history? As with most organizations, the answer can be summed up in one word: Leadership. In fact, in our case, it’s three words: Lack of Leadership.” – said the association.
Southwest knew a meltdown was coming
SWAPA shared that while the latest crash was a major incident, it is not the first technology-based service outage the airline has experienced.
“Over the past 15 years, system-wide meltdowns at Southwest Airlines have been increasing in frequency and magnitude. From the original Midway Meltdown (and then the second, larger one on 1/3/2014) to destroying our on-time performance with an additional “virtual” “router break” of airframes ( 2016) with the ‘collapse of Jacksonville Center’ (Columbus Day weekend, October 2021) with what we are experiencing today,” the letter reads.
The pilots association believes that these problems are predictable and preventable.
“As a result of any of these fiascos, or the many smaller fiascos in between, there has been no real accountability for those who made the decisions. If there is a saying ‘insanity is doing the same thing over and over again expecting different results.'” Well, then let the same people do the same thing over and over what is that given? The ultimate insanity, perhaps?” the letter continued
The pilots clearly believe the airline has lost its way and Kelly has decided to focus on increasing shareholder value at the expense of employees.
Herb’s legacy and the culture he built from the ground up focused on his employees and empowered them to make proactive decisions at the lowest possible level. But the culture that Gary Kelly started with his ascension to the throne was quite the opposite. Gary’s vision was to become the darling of the investment community while building an insulated and vertically hierarchical structure where all decision-making authority was slowly removed from front-line experts with the most situational awareness and far removed from the cubicle chain in Dallas. line operations.
That’s actually kind language in a letter that comes at a time when the general airline industry is facing a pilot shortage. That could solve the problems, as the pilots’ association believes the airline chose to return billions to shareholders in stock buybacks while boosting executive pay instead of investing in technology.
“As CEO, Gary Kelly made a conscious decision to invest less than necessary in technological improvements in favor of increasing shareholder returns because ‘our technology has worked well for 20 years.'” While Gary’s financial prowess cannot be debated, his poor operational management and his judgment has been demonstrated time and time again with each failure and finally laid bare by the current situation we find ourselves in,” the pilots added.