It is possible, but unlikely. Managing costs doesn’t mean short term planning. Managing costs means making massive investments now, so that they don’t bite you later. For example the fuel hedge.

The ADs are comparatively cheap for them to manage properly. IMHO it just doesn’t make sense that they elect to “manage” that way.

One interesting thing to note was how fast everything was dealt with though once the accusations were made, very quick turnaround and minimal disruption to service.

That alone speaks volumes of their ethic and culture. (I’ll try and find the Gary Kelly piece it was good.. and addressed the FAA thing.)

But having worked with the Feds for many years, I can tell you that what they say in person may not always be what they tell their bosses, especially if someone is in trouble.

Of course, info on the Southwest or American issues I’m getting purely second hand.

A well timed and amazing post. The confluence of the timing on your post and the increasing tenor of the Jet-A cry babies has my attention.

The fuel whining (whether you are hedged or not) is actually the biggest load of s–t I’ve seen in awhile. The air taxi industry is beginning to separate it out of their cost altogether.. and the passengers just pay for fuel on a separate line item. The airlines will have to do this too.. it is just a cost that is part of the ticket price, albeit a large part.

It is not a reason to lay people off, it can’t be blamed for shrinking your profit, it is simply evidence that you SUCK AT PLANNING.

Admittedly, in the air taxi world anyway, the line item is vague, marked up, and in many cases has more to do with the greed of the FBO or fuel wholesaler than the user or provider of the commodity. Remember, when Exxon moves it out of the war torn jungle to your local pump, they are doing it at a price that is governed by what people will pay, not some arbitrary secret enrichment formula, that is why it is called a COMMODITY.

The trend on Jet-A prices will probably shrink soon (slow economy, more resources being found, increased refining capacity, etc…) In a parallel universe, I used seriously worry about the Canadian dollar going into the stratosphere (we operate out of Canada too) and just when people started saying “oh my God.. it will go to $2 to the USD!!!” it went back to being on par. In other words, when chicken little hits the street, you know that the storm has passed.

The lesson here is simple: RUN A SOLID COMPANY THAT GENERATES CASH AND YOU WILL CRUSH EVERYONE ELSE.
When you have money you can:
a) think
b) plan
c) rest
d) hedge when necessary
e) wait to see if you need to hedge again
f) build hydrogen engines that can be slapped on the ole 737 by STC!
(of… f) is stretch)

Having money in your pocket and not being hostage to short term thinking, politics or policy makes for great enterprise. Herb and the gang knew that from day one and they built the foundation accordingly.

Curious: Steve, you sound bitter. What happened? Are you ex-Southwest? No company, as Rob says, is perfect, but phazing out “the older folks” is done by the State Police in Maine (and just about every other State I know.) I am sure there are some heartless moments in policy shaping at Southwest, but remember, you have to pick the “lesser of the two evils” when looking at companies or airlines.

Southwest earns my respect daily for that reason, they create a living, vibrant and thriving model for future entrepreneurs to point to and say … hey .. look we CAN make money too. And with an airplane for f–k’s sake!

The price that passengers and employees pay in order to keep shareholders happy is what this post was all about.

Is Southwest perfect? I doubt it. But of course, what would perfect mean anyway?

Realize that you as an employee are going to see the company much differently than those of us on the outside.

The American Customer Satisfaction Index released the other day shows Southwest nearly 20 points ahead of other airlines in terms of what those of us in the back think.

Again, that’s how we measure it.

For you though, I’m curious what kind of things are happening that are making SWA such a bad experience.

Even the flight attendants union gave old Herb a big cheer the other day.

Those actions make it just like every other company in corporate America: gluttonous to make even more profit to fatten the short-term company need and to h*ll with the folks that’ve committed years to helping SWA get there.

Your point is well taken, whether it is people or planes or fuel. Everything has to come together in the right proportions to make an airline successful.

No one believes it is simply luck at Southwest.

What I do strongly believe though is that when you have good employees pulling together, an airline has a much greater opportunity to succeed than when the employees are just along for the ride.

For me at least, even when the Southwest people make me mad for a late flight – which out of Midway isn’t often I must admit – they make me laugh too.

That’s one of those intangible pieces of Southwest culture that’s tough to show on the balance sheet, but it has quite a bit to do with their success.