Is Southwest Airlines Actually Broken?
On Tuesday, U.S. Secretary of Transportation Pete Buttigieg appeared on the PBS Newshour, where he vowed to hold Southwest accountable for what has been…
December 28, 2022 at 10:20 AM
6 minute read
CommentaryOn Tuesday, U.S. Secretary of Transportation Pete Buttigieg appeared on the PBS Newshour, where he vowed to hold Southwest accountable for what has been a highly disruptive string of flight delays and cancellations over the peak Christmas travel period.
Southwest's meltdown has been historically bad and continued past Christmas into this week. 2,507 more flights were canceled for Wednesday, and close to 2,400 have been canceled for Thursday.
Buttigieg commented on PBS, "It's a meltdown for sure – this is an unacceptable situation. Most of the other airlines are in the low single digits for flight cancellation rates. Southwest is at 70%."
In a video statement, Southwest CEO Bob Jordan vowed that this wouldn't happen again "Please also hear that I'm truly sorry. Southwest has the largest schedule in the country because we have built our schedule around communities and not hubs."
This is the real issue here, and no amount of apologies or government threats is going to change it because the issue is a structural one. Southwest has become such a successful airline by staying away from the hub system, opting instead for flying to more cities without banks of planes and crew based in hubs.
The other major airlines operate on a hub system. Major airline hubs such as Delta's Atlanta, United's Newark, and American's Dallas-Fort Worth are among the busiest home bases of the airlines, where flights are routed to and from. When there is a catastrophic weather issue, as we've seen over the Christmas travel season, it is easier to keep or return planes and crews to the hubs. With a flight schedule that involves more communities than hub cities, such as that used by Southwest, it can take a fair amount of time to get things running normally after a significant interruption – and that's what we're seeing now.
Of course, airlines are private companies and want the government to stay out of their business. That is, until they reach out to the government for subsidies and other types of help. Then the government takes public money and bails out the airline.
Case in point, Southwest posted a $116 million profit in 2021 following a massive $25 billion pandemic-related airline industry bailout earlier that year.
Once passengers, the government, and the media are out of the intensity of the moment and less exorcised about these thousands of canceled flights, we all need to consider whether trying to force Southwest to change its business model actually makes sense.
The ultimate solution here is legislation that does what rules in other jurisdictions do – protect the passenger.
A close read of the U.S. airline passenger rules is an exercise in frustration. It's full of "possibly," and "maybe," even when it comes to such basic questions as whether you can get placed on a different flight after an extensive delay.
West Palm Beach lawyer, Adriana Gonzalez, points out that "In the European Union, for example, there is legislation that compensates passengers for interruptions to each flight segment Yet, here in the U.S., airlines are not required to compensate passengers when flights are delayed or canceled."
In the EU, it's automatic. Having lived in Europe and been a frequent flier, on many occasions, I received compensation for a delayed or canceled flight automatically, on the same day. The airlines are well aware of their legal obligations, just as passengers are acutely aware of their rights. It really is a smooth process. I have even purchased tickets and, for whatever reason, chosen not to take the flight – and still record a same-day refund for a canceled or badly delayed light.
Does the U.S. flying population really benefit from forcing Southwest to adopt a hub model, following the lead of the other major airlines? Because, as someone who has own over three million miles and understands how airlines work, that's the only surefire way to ensure that Southwest doesn't have a similar system failure in the future. Airlines that operate out of hubs are simply far, far easier to reset than an airline that keeps planes and crews all over the country. But the hub system comes with a serious downside that begins with the fact that where an airline has control of a hub, it's easier for them to set high prices for specific routes.
This excellent YouTube series by a pilot is a great explainer. He is a "Newark-based" pilot but actually lives in Minneapolis. His videos shed light on how the hub system works in practical terms.
So while individual passengers aren't going to be compensated for their canceled flights over Christmas, Southwest might be facing enough of a public groundswell this week to make them nervous. But there's probably no quick solution here. By framing Southwest's business model as a commitment to American communities, Southwest's CEO has proven one thing definitively – that Southwest has an excellent crisis management team.
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