Solution to Airline Flight Cancellations

Investment Analysis Clubs Macro Economic Trends and Risks
1

The Solution to the Airline Flight Cancellation Fiasco is Easy, Do Nothing - Mish Talk - Global Economic Trend Analysis

The Solution to the Airline Flight Cancellation Fiasco is Easy, Do Nothing

Inadequate technology systems offer one explanation why a brutal winter storm turned into a debacle. Amazingly, Paul Krugman gets things mostly right.

Share of Flights Canceled
Share of Flights Canceled1200Ă—827 174 KB

Southwest Cancels Another 4,800 Flights

NPR reports Southwest Cancels Another 4,800 Flights as its Reduced Schedule Continues.

After canceling roughly 13,000 flights in the last few days, the airline is planning to remain on a reduced flying schedule for a few more days, its CEO said in a statement late Tuesday.

All domestic airlines have returned to pre-storm delay and cancellation levels after being knocked off-kilter late last week by a severe winter storm. Yet Southwest Airlines, plagued by staffing shortages and an outdated scheduling system, is still paralyzed.

Understanding the Meltdown

The Wall Street Journal explains How Southwest Airlines Melted Down.

When Southwest Airlines Co. reassigns crews after flight disruptions, it typically relies on a system called SkySolver. This Christmas, SkySolver not only didn’t solve much, it also helped create the worst industry meltdown in recent memory.

SkySolver was overwhelmed by the scale of the task of sorting out which pilots and flight attendants could work which flights, Southwest executives said. Crew schedulers instead had to comb through records by hand.

Some shared screenshots on social media that showed hold times of eight hours or more—which meant they could wait a full workday for instructions while flights were stuck for the lack of a crew. The airline was scrambling just to figure out where its crew members were located, union leaders said.

It canceled more than 13,000 flights since Thursday, stranded passengers and bags across the country, snarled Southwest’s crew members and drew fire from federal officials.

Southwest’s pilots union for years complained that SkySolver often spits out fixes that don’t make much sense, sending crews on circuitous journeys around the country as passengers to meet flights, a practice known as “deadheading.”

By Monday, Southwest executives realized they needed a full reboot. In an effort to get pilots, flight attendants and planes into position, the airline took more draconian measures. It canceled close to two-thirds of its planned flights for multiple days, and locked up seat inventory on its website so customers couldn’t buy tickets for a flight that might ultimately be canceled.

Unlike many rival airlines, Southwest’s planes generally hop from one city to another, rather than orbiting a major hub. That approach lets Southwest maximize use of its planes and crew, but the daisy chain structure also makes its network more delicate—problems in one corner of the country can be difficult to contain, said Samuel Engel, senior vice president of aviation at consulting firm ICF International Inc.

Do nothing. Let the market sort it out.
What a concept.
Unpleasant for those caught up in the here and now, but one of Southwest’s attractions is low cost.
Works most of the time but the downside is that occasionally duds occur.

4 Likes
2

Here’s another angle from a SW Pilot. Cutting and Pasting here for those that don’t look at FB.

https://www.facebook.com/photo/?fbid=623662526427797&set=a.296185345842185

Voices From The Line: Larry Lonero
What happened to Southwest Airlines?

I’ve been a pilot for Southwest Airlines for over 35 years. I’ve given my heart and soul to Southwest Airlines during those years. And quite honestly Southwest Airlines has given its heart and soul to me and my family.
Many of you have asked what caused this epic meltdown. Unfortunately, the frontline employees have been watching this meltdown coming like a slow motion train wreck for sometime. And we’ve been begging our leadership to make much needed changes in order to avoid it. What happened yesterday started two decades ago.
Herb Kelleher was the brilliant CEO of SWA until 2004. He was a very operationally oriented leader. Herb spent lots of time on the front line. He always had his pulse on the day to day operation and the people who ran it. That philosophy flowed down through the ranks of leadership to the front line managers. We were a tight operation from top to bottom. We had tools, leadership and employee buy in. Everything that was needed to run a first class operation. When Herb retired in 2004 Gary Kelly became the new CEO.
Gary was an accountant by education and his style leading Southwest Airlines became more focused on finances and less on operations. He did not spend much time on the front lines. He didn’t engage front line employees much. When the CEO doesn’t get out in the trenches the neither do the lower levels of leadership.
Gary named another accountant to be Chief Operating Officer (the person responsible for day to day operations). The new COO had little or no operational background. This trickled down through the lower levels of leadership, as well.
They all disengaged the operation, disengaged the employees and focused more on Return on Investment, stock buybacks and Wall Street. This approach worked for Gary’s first 8 years because we were still riding the strong wave that Herb had built.
But as time went on the operation began to deteriorate. There was little investment in upgrading technology (after all, how do you measure the return on investing in infrastructure?) or the tools we needed to operate efficiently and consistently. As the frontline employees began to see the deterioration in our operation we began to warn our leadership. We educated them, we informed them and we made suggestions to them. But to no avail. The focus was on finances not operations. As we saw more and more deterioration in our operation our asks turned to pleas. Our pleas turned to dire warnings. But they went unheeded. After all, the stock price was up so what could be wrong?
We were a motivated, willing and proud employee group wanting to serve our customers and uphold the tradition of our beloved airline, the airline we built and the airline that the traveling public grew to cheer for and luv. But we were watching in frustration and disbelief as our once amazing airline was becoming a house of cards.
A half dozen small scale meltdowns occurred during the mid to late 2010’s. With each mini meltdown Leadership continued to ignore the pleas and warnings of the employees in the trenches. We were still operating with 1990’s technology. We didn’t have the tools we needed on the line to operate the sophisticated and large airline we had become. We could see that the wheels were about ready to fall off the bus. But no one in leadership would heed our pleas.
When COVID happened SWA scaled back considerably (as did all of the airlines) for about two years. This helped conceal the serious problems in technology, infrastructure and staffing that were occurring and being ignored. But as we ramped back up the lack of attention to the operation was waiting to show its ugly head.
Gary Kelly retired as CEO in early 2022. Bob Jordan was named CEO. He was a more operationally oriented leader. He replaced our Chief Operating Officer with a very smart man and they announced their priority would be to upgrade our airline’s technology and provide the frontline employees the operational tools we needed to care for our customers and employees. Finally, someone acknowledged the elephant in the room.
But two decades of neglect takes several years to overcome. And, unfortunately to our horror, our house of cards came tumbling down this week as a routine winter storm broke our 1990’s operating system.
The frontline employees were ready and on station. We were properly staffed. We were at the airports. Hell, we were ON the airplanes. But our antiquated software systems failed coupled with a decades old system of having to manage 20,000 frontline employees by phone calls. No automation had been developed to run this sophisticated machine.
We had a routine winter storm across the Midwest last Thursday. A larger than normal number flights were cancelled as a result. But what should have been one minor inconvenient day of travel turned into this nightmare. After all, American, United, Delta and the other airlines operated with only minor flight disruptions.
The two decades of neglect by SWA leadership caused the airline to lose track of all its crews. ALL of us. We were there. With our customers. At the jet. Ready to go. But there was no way to assign us. To confirm us. To release us to fly the flight. And we watched as our customers got stranded without their luggage missing their Christmas holiday.
I believe that our new CEO Bob Jordan inherited a MESS. This meltdown was not his failure but the failure of those before him. I believe he has the right priorities. But it will take time to right this ship. A few years at a minimum. Old leaders need to be replaced. Operationally oriented managers need to be brought in. I hope and pray Bob can execute on his promises to fix our once proud airline. Time will tell.
It’s been a punch in the gut for us frontline employees. We care for the traveling public. We have spent our entire careers serving you. Safely. Efficiently. With luv and pride. We are horrified. We are sorry. We are sorry for the chaos, inconvenience and frustration our airline caused you. We are angry. We are embarrassed. We are sad. Like you, the traveling public, we have been let down by our own leaders.
Herb once said the the biggest threat to Southwest Airlines will come from within. Not from other airlines. What a visionary he was. I miss Herb now more than ever.

7 Likes
3

Ironically, I just returned from an international trip yesterday (12/28). Did hear about the US weather challenges & Southwest Airlines disaster - in India, In Tanzania, in Amsterdam (Holland), and after I touched down in the US. All I can say is, a 7.5 hr wait in Schipol airport for the direct flight was a reasonable trade-off to avoid logistical issues at intermediate stops in the US. Good luck to travelers out there

2 Likes
4

Southwest announces plan to correct its problems.

https://www.reuters.com/business/aerospace-defense/southwest-ceo-says-all-options-table-airline-looks-fix-operations-2023-01-12/?fbclid=IwAR2mbxbkhq_YS3652VGJvfyyDIuK0wM1wQjdEqsdIPzSMi9ATvKjSxCVuMY

5

Southwest has hired consultancy Oliver Wyman to investigate the disruption, Jordan told Reuters in an interview.

As luck would have it, I rewatched “Yes Minister” last week. I can hear the dulcet tones of Sir Humphrey now. “Appoint a special commission to investigate. We must not do anything precipitate, but give every option due consideration, and publish their recommendations in the fullness of time”.

Steve

1 Like