The One Decision That Tanked Southwest Airlines
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- Опубликовано: 6 окт 2024
- 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?
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@@TheHustleChannel this information regarding South West’s involvement in rushing the launch of the Max came out in the Max crash investigation s. Yes Boeing was trying to infer that the Max was the same plane flying characteristics as the -8-and -9 to avoid the costly and timely retraining of pilots but Boeing had reservations on doing this It was only after South West put pressure on Boeing did Boeing go forward with the disception. Certainly Boeing is complicit in this cover up but hadn’t South West put the pressure on Boeing they may have taken a different and safer decision . You can Google South Wests involvement on the Max to get a more detailed report
almost all of the time when a finance company takes charge, customer service and value goes down hill
Free bags, no ticket change fees, no expiration dates on unused flight credits still make Southwest my first choice.
Disappointed to see the focus shift immediately back to shareholders and profits and NOT the customers or the employees.
I’m sick of the focus on stock holders! It’s heinous theft really!
That’s what happens when you have investors you don’t really control the company it becomes politics inside the business
What corporation’s purpose legally and ethically lay solely in creating shareholder value.
Gotta take care of the people that fund the operation or there would be no airline / employees / airplane for you to fly on
@@THELIFEOFPRICE but that's not his the stock market works. After the IPO, the company doesn't receive any money from the trading of shares on the stock market. Instead, the money is exchanged between investors.
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
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.
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.
Have you seen Obama’s house collection? They don’t make more than tbe president. They also have led Southwest to one of the best safety records in the world. That doesn’t come cheap.
No one is running southwest as a team, it is fragmented and the L does not know what the R is doing. The customer ethos is now long gone.
@@FlyingElf777 obamas house ? Wft?
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.
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.
the new management doesn't really understand the philosophy that make Southwest, a Southwest
How incredibly refreshing to hear a CEO say the words “I messed up, this is on me”. Accountability it just top!!
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.
@scpatl4now Thanks for the detailed explanation of the problems with point-to-point. I didn't understand from the video, which obviously can't go into greatvdetail on every point.
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.
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.
Not what Herb would've done...
Ya think?
Assigned seating will be a really horrific mistake.
Big time mistake.
How much you want to bet the will charge flyers for the ability to choose their own seats, and prices will be dependent on the location in the aircraft?
@@jasongable3521 Of course they will; they’ll also introduce a variation of a first class cabin.
@@hughofIreland and charging for bags will be next.
I prefer knowing where I’m going to sit. Why would somebody prefer NOT to?
Point to point was how EVERY airline operated with a kiss of hub to hub…
I flew multiple times weekly in the 1999 to the 2005 era to variable destinations and Southwest was always my first choice. Two years ago started flying again to Chicago on a quarterly basis and initially went back to Southwest. After two round trip flights I’m done with them. I understand mistakes but have no tolerance for rudeness.
very professional video
One issue nit mentioned was in the fact that is was South West that forced Boeing to hide the MCAS so that you didn’t have to loose time training pilots on the new 737 MAX and get the new variant into the air quickly. Since South West was the biggest customer for the 737 Max Boeing acquiesced to South West. The two crashes was partly due to South West.
And where did you see that? Boeing was the one that wanted to advertise that it was “almost the same plane” as the previous 737s so they didn’t train the pilots about the mcas. Southwest didn’t to anything.
@@SupremeCakeVR I have to second that Southwest was, and is toying with adding Airbus to the fleet. Boeing does not want that to happen as almost all lost cost carrier switch to Airbus over time. Also Airbus was also to blame as they had doing things behind the scenes to trick Boeing into not building a 737 replacement.
@@SupremeCakeVRSouthwest negotiated a deal with Boeing on the MAX that required a $1m per plane refund if it didn’t stay on the same type rating or required additional simulator training. That was part of the financial pressure on Boeing to slip MCAS in without fully disclosing the ramifications. A contributing factor from the same root cause was MCAS being driven by only one angle of attack sensor, when there should have been redundancy.
I wasn't aware that SW made the Boeing aircraft or flight manuals.
@@passthetunaporfavor let’s try to be somewhat rational South west put financial pressure van on Boeing. It is Boeing who made the wrong decisions but they were driven by South West insistence on getting the Max certified quickly
The issue that broke them for me was their insistence on shading the truth. With a plane delay as I sat at the gate in early 2023, the departure kept getting pushed back by ten minutes, every ten minutes. It turns out the plane I was to board hadn't even left its previous airport and they had no idea when it would leave. All the gate agent could say is, "This is our best guess. When it leaves that airport, we'll be able to tell you more accurately." It wasn't a weather issue. It apparently wasn't a mechanical issue. They just didn't know. So instead of saying they didn't know and giving us food vouchers or whatever, they just pushed back the expected departure every 10 minutes. For hours, every 10 minutes they pushed back the departure by 10 minutes. No more for me.
That's incredibly common with ATC disruptions, if you have ever been on a plane sitting on the taxi way waiting for takeoff but everything is slowed way down because of weather, then you know what it was like for the passengers on the plane that was inbound to take you on your trip. In Europe and other parts of the world, ATC has greater predictably to when a plane will take off, but the US is unique in our parrent of thunderstorm like no other country
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.
So are Delta and United. That doesn't leave me much choice. It's too far to drive.
Spot on
What does woke even mean? 🤡
You are great at explaining these things and do it in a very engaging way. Thank you.
Great video! I was a diehard Southwest fan but gave up on them in 2023. My angst or complaint was the open seating model. One of the biggest faults they have is those requiring assistance get on first. You'll see 50 people lined up with pre-board then group a then group B then group C. I have paid for the early boarding and wound up in the B group.......🙄
Magically, those 50 pre-borders walk off the plane without an issue. I wrote a very professional letter to them stating I'm giving up my program my miles to switch to Delta, which is less convenient, but affords me a dependable seat in economy, plus. I think the assigned seat is a huge upgrade for their company. I would consider going back to them with a pre-assigned seat. My understanding is they have premium seats which I will pay for as well.
The miracle at 30,000ft is a uniquely Southwest thing. Though the last Southwest flight I was on, they took 16 people off the plane in wheelchairs.
Love southwest. I was caught up in that Christmas meltdown in 2022. It just gave me more time to spend with my family and southwest gave me 25000 points which I used to fly back home to go on a family cruise. Southwest is the best airline out there, period, I hope these investors don’t ruin it.
I was traveling internationally during the 2022 Holiday season. I was extremely lucky that l didn't take Southwest 😅
Southwest Airlines ticket prices are now HIGHER than their competitors. Keep it up Southwest, bankruptcy is on the horizon.
Lamar Muse was CEO when profits were first reported in 73. No herb…. Lamar Muse was the starter of SW. Herb came in to fix the bankrupt starter Air Southwest…. Roland King and Lamar Muse bringing in Herb got the airline going.
Unfortunately for me, outside of three flights Southwest is the only airline that flies in/out of Long Beach, CA. Both JetBlue and Allegiant used to fly there, but got into hassles with the city over noise abatement and when they they left and SW took their spots.
It was worth the hassles for me to SW rather than deal with LAX. That time may be coming to a close due to their increased prices.
The problem was a change in management and not treating employees right, plus being more concerned about short term profits than upgrading software. The use of 737, point to point, and so on were/are not the problem. Of course the overriding downfall will be the new activist investor meddling and betrayal of what kept customers loyal.
I always liked the open seating because for example if there was a crying baby or someone I didn’t want to sit next to, I could go elsewhere
But if you're the last one to get on with the open boarding system and there's one seat left and it's beside the crying baby you got no choice of seats
Ever since I lived in Texas and flew Southworst twice i swore never to fly them again and haven't since. Don't miss them and don't care.
To call SWA “worst” is to deny the existence of Frontier, Spirit, Sun Country, or to pay the ridiculous United fares or sit in any of the many, many regional lines of Delta or American. I fly Southwest as often as possible because it offers the most direct flights of any airline from my non-hub city.
Well done.
They're still my first look when booking
Yes I will choose Southwest the next time I fly. I just took a trip with them last week and found the same great service they've given me for over 30 years. Southwest is how I get to work. There have been a few minor problems over 3 decades but they properly addressed every one of them. As I check a bag on every flight I've seen damage to a few bags. I can count the incidences on a hand and every single time SWA replaced my bag in a very simple and quick process. But if they go to assigned seating I might have to try United Business because if I can't choose who I sit next to I want a seat big enough to keep them on their side of the armrest.
There's a lot of people here criticizing focusing on profits. A lot of airlines struggled coming out of COVID. Spirit went from crazy profit to being on life support. Gone are the days we're you can just merge meaning, make money or go bankrupt
Unbelievable you have nail every situation that happened with such a great airline.
It gets to the point that for whatever reason companies by the time they evolve it’s almost too late…I wish them the very best and will do my best to continue doing business with them. It’s really was a meltdown and time will tell how they’ll bounce back .
Definitely assigned seating will be a major plus , people have been taking advantage of it for so many years, a minor change that will make a big difference.
I have NEVER liked Southwest. I do not like its open seating system. And I have never liked its customer service. The 2 times I flew Southwest were nightmares. And now there is the question of TRUST. Will I be stranded?
In 1977-78, the squezzed one more row of seats which was the beginning of the end for long tall Texans.
Thank you very much for such a thorough explanation! I am subscribing.
Nice info and very nice production value. Did I miss the 1 decision? Was it buybacks? Was it dividends? Tech?
Its a tech problem. Unfortunately enormous $1B “initiatives” in software are almost guaranteed to fail miserably. They are managed to death, not led, usually by executives who lack any experience brining a “geenfield” project to market, or worse (much worse) outsourced to some pasty old-school company that sounds reassuring to investors and executives but hasn’t had a major hit in decades (looking at you IBM, Accenture, CSC, …) Virtually all the great modern tech we use today came from small focused teams with a crystal clear vision and minimal management. But… that’s exactly how a “managed” company like Southwest will NOT do it.
I won’t be flying them anymore because I don’t like assigned seating. I don’t care about baggage.
Correction: Delta restored shareholder dividends.
Fantastic documentary! Been wondering about SWA and the Elliot Financial tebockal.
Hope you can investigate some of the other companies that Elliot has invaded (e.g. PayPal, TXN, Intel...).
Thanks again for the information and education!!!
Southwest was piled on and scapegoated on the tech crash in what amounts to a hostile takeover. One of the circumstances that created their profitability were fuel contracts signed at very fortunate low price periods on several occasions.
You got yourself a new subscriber 🎉
I no longer look at WN first, they are only considered if they have the only direct flight.
I fly SW out of CMH ALL the time unless flying somewhere they don't service. Never have had a problem.
Southwest did not invent the low cost intrastate airline. The 1949 Pacific Southwest Airlines operated as a California intrastate airline. PSA's early success as an intrastate airline served as a model for Southwest Airlines. PSA did not survive deregulation.
Yes they did, they got conglomerated into USAir
PSA
Poor Sailors Airline
I cannot even fly nonstop intra texas from hq to the valley. I go American.
Great video. Loved the host.
Great video! You have a new subscriber here!
Great video!
It’s still my favorite airline.
Like Southwest after Herb, FedEx is going down the same path after Fred Smith stepped down as CEO
I used to love Southwest, then they reduced the legroom and became like every other airline
Well I only liked Southwest back in the day for direct routes, free bags, and unassigned seating. Take that away and you don’t have anything worth while to sell.
Ghetto jet cheaper than a cab ride in Harlem!
Profitability-get as much out of the customers pockets for giving as little as possible
Nice job sir.
I actually flew on a 727 on Southwest once.
Nice job.
I’ve flown SWA about 30x
Never had a single problem
I'm a former non-disgruntled Southwest Ops Agent who took the Severance Package at the beginning of the pandemic and left. I haven't flown on Southwest in almost 4 years and have absolutely no desire to fly on them.
Swa paid 1.4 Billion to acquire Airtran they wanted into Atlanta so bad. The right move was to let Airtran fail and get it for dirt cheap but SWA didn't want to fight Delta for them Airtran scapes so they overpaid
Swa wishing they had that $1.4 billion now on balance sheet 😂🎉😊
Airtran wasn't doing that bad. They were actually profitable when Southwest bought them. Southwest also had to offload all the new 717s that Airtran had just acquired (bought by Delta)
@@scpatl4now And Delta would have easily just kept using them because they already had a huge number of that airframe, either 717's or actual MD-s and only got even more when the bought out North West. Delta got the Air Tran fleet at bargain basement prices because SW refused to use them
They have rebounded.
“Here’s the whole history of Southwest from the very beginning which you didn’t want to know, weren’t searching for, and is not baited in my vid title so I can pad my running time to hock more Doritos and Squarespace. Then I’ll give you a couple minutes of actual substantive content.” Tool.
They are losing a billion dollars a year just on providing inter island flights in Hawaii. They need to exit that market.
I don't fly on Boeing aircraft any more.
Great video....SWA if you are listening...I only fly SWA now but am totally against assigned seating. I don't care what your survey says; please don't change this!
Best customer service in 2024. Sounds like people are choosing SWA. Let’s hope the activist investors don’t ruin what originally made them great.
Southwest needs to buy Airbus Or Embarer Planes
I live in a city that is as close to a Southwest hub as you can get (BWI) but still I avoid them as much as possible. I hate the open seating, they are also constantly late.
R.I.P. S.W.
SWA will become like every other major airline, and its crews will be like others too. It will be miserable, painful, to fly on SWA...sadly. It is not the fault of the crews or gate agents either.
After the govt forced lockdowns were lifted, we saw customers who only flew on the bottom feeders (think Spirit, Frontier and Allegiant) travel on the likes of DAL, AA and UA cause of the free money. Same happened at hotels like Hilton, Marriott and Hyatt saw Motel 8 guests or other low-cost motels.
Now the travel industry is back to a state of normalization.
But not with SWA due to Elliott Investment.
Time will tell, but it is not happy times at SWA or for its dedicated followers.
I’ve never liked Southwest and found them off-putting the few times I’ve flown them. With their unassigned seating, you may as well be taking a crosstown bus, and I particularly cringe at some of their cabin crews making a joke of the safety announcements and demos. And, lastly, I do not want the flight attendants to try to coax passengers into a sing-along. I’ll gladly pay a premium to fly with an airline es that takes its job seriously instead of turning it into a big joke.
I will not use them even if they were giving flights away. I will not book with any company that flies the Boeing 737 Max.
Stawk promoters strike again.
This video is so over produced, it is distracting from the information being communicated.
Great video...i.e. the analogies of SW. Flew SW in the 70s, but my loyalty went away from them due to their open seating.
As you get older, to me, it's all about comfort, so business class is what's needed to keep me flying.
My loyalty went from United 1K status to British Airways Gold Status. Comfort is Priority One! ✈️💺🧳
👊respect👊