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Southwest Becomes One Of America's Least Reliable Airlines-After One Bright Idea Backfired

Why brilliant strategies sometimes fail smart businesses

Kelly Main
A Southwest Airlines ticketing counter at Baltimore/Washington International Thurgood Marshall Airport. Photo: Getty Images

Southwest Airlines has had a number of great ideas. Free checked bags, flexible tickets and efficient route planning that kept planes in the sky--and its profit margins as high as possible. Amid the pandemic, it had another brilliant idea. And it backfired.

As competing airlines were downsizing routes and destinations, Southwest decided to expand. Its expansion strategy was a bold move that made it more convenient than ever.

By adding new destinations and routes, it was effectively meeting people where they were. But months later, the bold move is proving to be a bad move as the airline lacked one major thing every growing business needs: the infrastructure to support its growth.

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Now, Southwest is in a position no business wants to be in: its selling point is growing into a pain point, as it increasingly cancels and changes flights. And putting its customers in a position no one wants to be in, facing last-minute trip changes, cancellations, and the stress of rebooking-oftentimes with competing airlines and at much higher, same-day rates.

Keeping planes in the sky is keeping passengers on the ground

A major reason Southwest is canceling and changing flights on passengers is that it lacks the infrastructure and staff to uphold its flights should it face a hiccup in sourcing its scheduled plane and crew. In other words, its additional destinations and routes are diluting its ability to uphold its reliability as it holds onto old methods as it expands.

Most major airlines, like United or Delta, have hubs strategically placed throughout the country to give them quick and easy access to planes and staff on short notice. Southwest, on the other hand, does not. Or, at least not yet. Instead of using the industry's traditional "hub and spoke" system, Southwest uses a "point-to-point" system.

Southwest does not have large hubs with planes and crews on standby like other major carriers because it works to schedule flights more efficiently. This keeps planes flying as much as possible throughout the day, which increases revenue.

But when one plane gets held up on the other side of the country, Southwest doesn't always have the ability to locate a new plane and crew. In response, it might delay the flight significantly as it tries to locate an available aircraft, or it might simply cancel the flight.

Southwest now has the second-highest cancellation rate

Southwest was previously one of the most reliable carriers in the U.S. But in more recent months, it has become one of the least reliable with a high number of flight cancellations. For example:

• October: 2021: Southwest canceled over 1,000 flights in one weekend.
  
• November 2021: Southwest canceled 1,800 flights in a single weekend.
  
• December 2021: Southwest canceled over 2,200 flights in three days.
  
• January 2022: Southwest canceled nearly 1,200 flights in two days.
  
• February 2022: Southwest canceled over 1,000 flights in one day.
  
• March 2022: Southwest cut 14,500 scheduled flights for Spring 2022.
  
• April 2022: Southwest had about 1,000 flight cancellations in one weekend.
  

Keep in mind that these are just the mass cancellations that made headlines--not all of the cancellations that occurred throughout any of the months. When contacted, Southwest did not respond to requests for comment.

The most recent data tell us that out of all of the major U.S. airlines, Southwest has the second-highest cancellation rate, just behind Spirit Airlines. For perspective, recent data shows that, statistically, Southwest is seven times more likely to cancel a flight than Delta.

As Southwest seeks growth without change, passengers are seeking to change airlines

As Southwest increases its number of destinations, it's not budging on its "point-to-point" system. While it worked for the airline when it had a short roster of routes, it doesn't work for a growing number of routes and destinations. As it holds on to doing what has served it in the past, it's failing to serve its customers (and its employees) in the present.

Southwest's poorly-executed expansion strategy is damaging its reputation and its track record of reliability--and trust--as its flexible booking policy is turning bookings into a gamble. Canceled flights mean wasted time, added stress, missed meetings and lost opportunities. It doesn't work for those traveling for work or pleasure-and neither does offering something you can't uphold.

Even the most brilliant growth strategy will fail a business--and its customers--if it doesn't have the infrastructure required to support growth. Southwest is making the rookie mistake of holding onto what got it to where it is, not realizing that this won't get it to where it wants to be. In return, it is fumbling to deliver the value it sells, leaving customers running into the arms (or in this case, seats) of competitors.

e6bpilot

The headline misleads, but the article is pretty accurate. The business model isn't flawed. The leadership decided to cut to the bone during Covid and was slow to staff the airline during the travel rebound. It has nothing to do with PTP (which is largely gone these days anyway) or free checked bags.
Southwest bled bodies because their illustrious outgoing CEO thought the pandemic was the end of travel for many years to come. They used PSP money to buy out experienced employees, leaving the operation a sad skeleton of what was once a robust, well oiled machine.
It will take time, but current leadership has identified the problem and will get it turned back around. Southwest is a big ship with a little rudder, though, so it will take a while. In the meantime, they need to throw money at the personnel problem and just accept it as a cost of doing business in an inflationary environment. Based on recent hiring trends, I think they realize that too.

MatthewAMEL

It's a good article. However, I doubt anyone in DAL will pay attention. And even if they do, I feel like they will read 'infrastructure' as 'more middle management'.

Rolf

GK is the the worst thing that has happened to SWA so far. Sucked everything he could out of this place.

Zard

Good riddance to bad rubbish, too bad he’s still pulling the marionette strings. At least a corporate raider has the decency to tell you straight up how he’s going to leave a quivering pile of poo where a once solid company stood.

Profane Kahuna

Disagree.

The plan to cut expenses through early retirements and leave was brilliant. It saved Billions of dollars and the employees could be called back on 30 days notice to expand and win marketshare.

The execution however, was a complete failure. Waited too long to pull the trigger (even the Union told them) and didn't have enough instructors so there was a logjam bringing people back.

tallpilot

I have yet to see an article that points out the single biggest cause of cancellations is the elimination of 'legal to start, legal to finish' by FAR 117. This combined with understaffed airlines creating 'efficient' crew pairings (ie. close to maximum FDP) means any significant delay leads to a crew timing out. Combine that with Florida's airspace becoming as absurdly congested and ill-designed as the northeast corridor and it's a recipe for disaster.
More staff will certainly help but structural changes outside the airlines' control are also necessary. Perhaps those will be discussed at this upcoming meeting.

waterskisabersw

You have yet to see an article saying that because it has nothing to do with cancelations. Legal to start legal to finish was only ever for FLIGHT TIME not duty. You even duty in your example, which actually CAN be extended by two hours now. I am almost never bumping up on flight time issues, and even then it's usually cumulative issues instead of that day. I've only ever been rescheduled for single FDP flight time illegalalities once in seven years.

g1000pilot

Interesting read. SWA used to be where it was at.