Southwest Goes Sideways: Should CEO Resign? Benzinga Twitter Followers Chime In

Zinger Key Points
  • "Pride in their outdated processes and technology continues to drive the management," a Southwest union president said.
  • The Southwest mess could spur legislators to challenge the $7.6B deal between JetBlue and Spirit.

Southwest Airlines LUV CEO Robert Jordan should resign, according to a new Benzinga poll.

Of the more than 600 votes that were cast via Twitter, the reaction from a majority of respondents underscores the ever-growing frustration and ire directed at the Dallas-based carrier.

In just a few days, Southwest canceled more than 13,000 flights (and counting), leaving thousands of customers and its own employees stranded in airports. Read on to learn how one of America's largest domestic airlines landed itself in such a quagmire.

See Also: DOT Secretary Calls Southwest Schedule Chaos 'System Failure': Report



Carrier Consolidation

Jordan was previously running AirTran Airways when it was acquired by Southwest in 2011.

That deal was just one of many examples of airline M&A activity going rampant, resulting in just five carriers — Southwest, United Airlines Holdings Inc UAL, American Airlines Group Inc. AAL and Delta Air Lines Inc. DAL — making up 80% of passenger air traffic in the U.S. on any given day.

U.S. Sen. Elizabeth Warren, a Massachusetts Democrat who recently urged the Department of Justice to investigate Ticketmaster over its monopoly on live events, is now doing the same with the airline industry.



Observers of the Southwest mess should expect Warren and other legislators to now challenge the $7.6-billion deal between JetBlue Airways Corporation JBLU and Spirit Airlines Incorporated SAVE, which would form the fifth-largest U.S. airline.

See Also: American, JetBlue Tap Alliance Amid Antitrust Regulatory Opposition

Outdated Tech

Southwest, like Allegiant Travel Company ALGT, uses a point-to-point model.

It's a system that essentially works well for smaller airlines. Large ones? Not so much. For years, Southwest has grown faster than its infrastructure can handle, a pilot union VP told NBC News.

As a result, crews are scattered across the country and when a severe storm or other major delay happens, it causes a domino effect.

Meanwhile, other airlines like American Airlines and Delta use the hub-and-spoke route system — considered more modern and allows for multiple routes to connect to designated hub airports.

Southwest, while fully staffed, also has trouble connecting pilots to airplanes, another union rep said, blaming the company's reliance on the SkySolver program.

The outdated scheduling system is reportedly faulty and leads to "deadheading" — the act of bouncing pilots and crewmembers from city to city to make flights. In addition to running the risk of delaying flights, it's a safety issue because pilots often suffer from fatigue as a result.

Casey Murray, president of the Southwest Airlines Pilots Association (SWAPA), has addressed the issue before, pleading with Jordan to upgrade the airline's software.

"We all know that Southwest Airlines has buried its head in the sand regarding its operational processes and IT," he said in a letter. "And even though irrefutable analytics and data have been provided by us again and again, pride in their outdated processes and technology continues to drive the management."

Next: $1000 Invested In Southwest 10 Years Ago Would Be This Much Today

Image: Shutterstock.

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