Skift Take

Instead of heeding employee concerns, Southwest focused primarily on tech for customers, leading to a worst-case example of what can happen when modernizing operations is not a priority. May other airlines learn from Southwest’s mistake.

Southwest Airlines capped off its 2022 with the unenviable distinction of cancelling more than 15,000 flights in total during the week of Christmas, the result of a system failure caused by several issues that were exacerbated by a nationwide winter storm.

It was an unmitigated disaster for the Dallas-based airline, with the story leading news sites and network TV news broadcasts day after day, a public relations disaster that showcased its deficiencies in keeping its technology up to date.

As the debacle was being scrutinized heavily in the media each step of the way, the airline’s CEO, Bob Jordan, made several statements and appearances in an attempt to get ahead of the unfolding crisis and improve public perception.

Southwest Incoming CEO Bob Jordan
Southwest Airlines CEO Bob Jordan (R) speaking at Skift Global Forum in New York City on September 23, 2021.

Meanwhile, the issues that other airlines faced during the storm were quickly remedied, no system shutdown needed. 

The primary reason for the major issue at Southwest was its outdated optimization technology, which the airline has outgrown over the past couple of decades. Company executives have admitted to prioritizing other things over investing in technology for operations, despite warnings from staff and some close calls previously. Paired with a staff shortage, the issue became too much for Southwest’s system to handle.

“This one clearly pushed it over the cliff,” said Robert Mann, airline industry veteran and president of aviation consultancy R.W. Mann & Co. “While they’re working this problem out, they’ve got to be absolutely certain that this never happens again.”

But whether this can happen again is a legitimate question for the entire airline industry.

Being behind technologically is a common criticism experts make of the aviation industry. Will it result in other meltdowns similar to Southwest’s?

The airline’s disaster over the holidays should serve as a reminder for other carriers to take stock of their operations to ensure nothing like this happens again, and when it comes to looking where to cut costs, leave the technology alone.

Now the question is what Southwest will do next. 

What went wrong with the technology?

There is always a backlog of updates that need to happen in the airline industry, but they get pushed aside in a system where safety and regulatory issues are paramount 

It appears that was the case for Southwest — to the extreme. 

Unions said they had been warning Southwest of tech inadequacies for years and that the problem could have been avoided if the company would have invested in its own operations. Southwest had invested in some new technology, mostly customer-facing applications like self-service capabilities, as outlined in a public filing in early 2022. The filing also said the company had deferred a “significant number of technology projects” during the pandemic, though it did finish the “long-awaited milestone” of establishing a single system for all aircraft maintenance and record-keeping.

Jordan told employees in a memo obtained by CNN that the airline has a lack of tools, and there has been talk internally about the need to modernize further. 

The main piece of failing tech was the airline optimization software called SkySolver, which is supposed to assign crew to flights using a complicated mathematical system. Southwest has grown beyond the capabilities of that old technology, which it began using when it was much smaller. 

On top of that, the airline flight crew has no front-end technology to input its whereabouts into that system, meaning the crew has to call a crew scheduler on the phone to share that information.  

The shortcomings of that system and its inability to catch up with the problem snowballed into the mass cancellation, which was needed to allow the system to reset. 

“As good as these companies are, as good as their brand halos seem to be, they all have warts that maybe people don’t see every day, but boy, they become pretty clear when you have a problem that involves them,” Mann said.

How did an employee shortage contribute to the problem?

Hand-in-hand with the tech issues, Southwest had a lack of workers that led to the CEO declaring a company state of operational emergency in Denver. 

The airline has been relying on employee overtime to staff operations. The union representing ground workers at Southwest said many of the employees had worked up to 18-hour days during the holiday season, and some experienced frostbite. 

The company sent a memo to its Denver ramp agents on Dec. 21 threatening their jobs if they did not comply with the operational emergency rules.

“Looking particularly at that memo to the Denver staff, I think that’s illustrative of a serious cultural failure,” Mann said.

During a time when the entire industry is facing a worker shortage, he believes that approach was counteractive. 

“This should have been done the way many other carriers did it, particularly after last summer. A lot of them decided to use a carrot, not a stick. They would be able to offer incentives for peak demand,” Mann said. “They don’t actually pay very much on those incentives, but at the end of the day, they get people to volunteer for work on their vacation days. The result is you take the stress level right out of the airline, and you get better results.

What solutions will Southwest make?

An immediate solution to keep a backlog from occurring would be to put a front end on the optimization system so employees don’t have to use the phone to update their whereabouts. Long term, the company would need to either build or contract an optimization system that it can grow into over its next phase of development, not one that it will outgrow again. 

It would likely take months to implement a new system. 

Southwest said in an emailed statement on New Year’s Eve: 

“It’s too soon to share a look ahead (beyond what’s been posted to SWAMedia.com) as we focus on our Operation over the holiday weekend. That work and analysis is a priority, and will be done in the coming weeks and months ahead.” 

Southwest posted some comments on Dec. 31 that it said were made by Jordan to employees, including, “We’ll move forward with lessons learned here, as we always do. We have plans to invest in tools and technology and processes, but there will be immediate work to understand what happened.”

The airline will also need a plan to have more staff on hand.

In response to a question about employee attraction and retention, the airline stated, “We’re proud to be an employer of choice and hired more than 17,000 new employees in 2022 with more hiring planned in 2023.”

What’s at stake if Southwest gets this wrong again, or another airline stumbles?

The federal government including the department of transportation has already said it is investigating the issue.  

Financially, Southwest is a stable company. It had said in December that it was going to start paying dividends to investors again, the first to do so post-pandemic. 

So, a financial failure likely isn’t the immediate concern, but it could be if business goes bad. The public typically has a short memory, even in situations like this, so Southwest has that going for it.

“The brand damage has been done here in a big way. And so developing the trust of your employees, developing the trust of your customers, is going to be important, and you cannot afford another lost ship kind of moment with either of them.”

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Tags: airline innovation, airline technology, airlines, labor shortages, southwest airlines, workforce

Photo credit: Southwest Airlines canceled more than 15,000 flights during the week of Christmas. Synthex / Abode

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