During that time, he took our Company from being known for our personality and agility to becoming a classic technocrat’s dream with an explosion of stove-piped vice-presidential fiefdoms that all communicate vertically with little-to-no horizontal integration. Gary’s vision was to become the darling of the investment community while building an insulated and vertical hierarchical structure where all decision-making authority was slowly stripped from front line experts with the most situational awareness and moved further up the cubicle chain in Dallas far removed from line operations. However, the culture that Gary Kelly ushered in with his ascension to the throne was the exact opposite. Herb’s legacy and the culture he built from the ground up was centered on his employees and empowering them to make proactive decisions at the lowest level possible. If the saying that “insanity is doing the same thing over and over again while expecting different results” is true, then what is it when the same people are allowed to do the same thing over and over again? Supreme insanity, perhaps?
Second, there has never been any real accountability for the decision-makers as a result of any of these fiascos, or the numerous smaller ones in between. From the original Midway Meltdown (and then the second larger one ) to destroying our on-time-performance with the added “virtual airframes” experiment to the “router brownout” (2016) to the “Jacksonville Center debacle” (Columbus Day weekend, October 2021) to what we are experiencing today, there are two common threads that bind each of these incidents together.įirst, they were all results of conscious operational, manpower, or tech infrastructure investment decisions made at the senior levels of our Company. Systemwide meltdowns at Southwest Airlines have been increasing in frequency and magnitude over the past 15 years. It is time to have a frank discussion about the root cause of the quagmire that we find ourselves in today. That fix is actual and tangible accountability above the front-line worker level for the first time in our recent history. And these messages obfuscate the actual corrective action that is absolutely necessary to pull out of this graveyard spiral that our Company’s so-called leaders have placed us in. While we continue to receive saccharine corporate-communications-department-written and legal-counsel-reviewed “we’re sorry” and “I love you” meaningless and generic messages from SWA corporate executives, they obscure a genuine cancer within our Company that has been an ever-growing existential threat that must be excised before it becomes terminal. Actually, in our case, it’s three words: Lack of leadership.
How did we get here? How did we go from the most stable and profitable airline in history to the greatest meltdown in airline history? As with most organizations, the answer can be distilled down to one word: Leadership. “Arguably, our shareholders have suffered for a long time when it comes to getting a return and our employees have been very well taken care of.” Ultimately, it’s shareholder value that you’re producing.” So there’s no constituency at war with any other constituency. If you truly treat your employees that way, they will treat your customers well, your customers will come back, and that’s what makes your shareholders happy. Only it doesn’t do that, quite the opposite! It may mislead investors for a time into thinking that the business will run on lower costs, but the investment deficit will need to be made up, and the year-end debacle at Southwest will cost the airline hundreds of millions in lost revenue and in traveler reimbursements. In doing so he tries to connect choosing to underinvest in technology as a way to increase shareholder return. However he also goes down the rabbit hole of stock buybacks, repeating the incorrect trope that buybacks increase share price.
Tom Nekouei, 2nd Vice President of SWAPA, mostly dumps on former CEO Gary Kelly, who retired early in 2022, and correctly flags that the company has deferred technology investment for decades. It’s a mix of correct analysis and hobby horses. The Southwest Airlines pilot union sent its members a note in the aftermath of their airline’s meltdown, diagnosing the core issues and challenges at the company.
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