The Failure of Southwest Airlines

Southwest Airlines Co., is one of the biggest airlines in the United States, having been established since 1967. The company has one of the largest low-cost carriers worldwide and generated $15.79 billion in revenue. Despite all of its success, Southwest is currently having problems, canceling thousands of flights. In this article, I will discuss what those problems are and how those problems are impacting the company.

Thousands of Canceled Flights

On December 21, 2022, Winter Storm Elliot hit two-thirds of the United States. The storm led to widespread cold temperatures and produced large gusts of wind. Many people lost power and more than 60% of the population was given some winter weather alert. This snowstorm had a significant impact on flights; more than 5,700 flights were canceled into or out of the U.S. Most airlines were able to recover from this incident quickly, but Southwest airlines were not able to.

Why did Southwest get Impacted this Badly?

Compared to other airlines, Southwest had inadequate computer systems. Executives and analysts have described this incident with Southwest to be “its biggest operational meltdown in its five-decade history.” Analysts also claim that Southwest has had problems lurking in the background since before the pandemic, and those problems caused the airline to be unprepared for this weather storm.

Another reason why Southwest was hit disproportionately is because the airline configures its network differently compared to Delta Airlines, American Airlines, or United Airlines. Southwest operates its carriers on a “point to point” approach where planes fly from place to place without returning to any main hub. This approach is different from the other airlines, as they utilize the “hub and spoke” approach. This approach requires the planes to return back to a designated main hub after flying out. Airlines that implement this method can close down specific routes in the case of bad weather. Southwest cannot do this without impeding the routes of multiple flights. While the “point to point” may be more efficient in normal circumstances, in emergency times like these, it is very ineffective, as we are seeing now.

Southwest Chief Operating Officer Andrew Watterson stated that he believes their outdated scheduling software is what led to all of the flight cancellations. This information was obtained from a transcript of a call by CNN. According to reports, Southwest has a widespread systemic issue with its technology. The phones and computers are outdated. The CEO of Southwest, Bob Jordan, believes they are “suffering from a lack of tools,” and that they have failed to “modernize their operations.” According to him, Southwest is now committed to fixing these issues.

The Effects on the Company

The federal government has begun to investigate what the issues are with Southwest. Two Senate Democrats have told Southwest that they need to provide significant compensation to all the stranded travelers affected by all the cancellations. The reputation of Southwest Airlines has been tarnished tremendously. Shares of Southwest stock sank by 6% on Tuesday, after canceling 63% of their flights. Significant changes need to be made to the company, and if they do not act quickly, it may be too late.