Lets think way back for a minute. Back before I was born. Back before many of you were born. In 1971 a little Texas based airline was founded. Its name was Southwest. In less than 50 years it has gone from being a tiny Texan start up with a handful of regional routes to a 700 aircraft nationwide behemoth. That’s a problem.
Southwest has become an icon in the American skies known for their low fares, free checked bags and exclusive use of the 737. They’ve always done things a little different. When all of the airlines were moving to Dallas Fort Worth Airport they stayed at Dallas Love Field. When other airlines began to charge for bags Southwest kept them free. When legacy airlines began to order shiny new Airbus aircraft Southwest stuck with the 737. It may be old but it’s reliable and it works for them. It seems that for the first 35-40 years of their existence Southwest was great because it was simple. Flights were on time, bags always made it to their destinations and service always came with a smile. What is happening now?
Southwest has had a rough year and an especially rough summer. Their on time record has been mediocre at best and their stock price is low. This has been due to many operational issues at the airline or as I prefer to call them growing pains. See, Southwest can’t do things the way they used to. Operating 100 737s isn’t near as difficult as operating 700 737s and it shows. Southwest is dealing with these issues in an interesting way. They are turning into a legacy carrier.
For those who fly frequently the writing has been on the wall for a few years now. United, Delta and American are often cheaper than Southwest. Simple as that. Even with the baggage fees one can often find a better deal at a traditional carrier. It may make sense for some to fly with Southwest regardless of the high fares if they offered a better product but they simply don’t. Southwest is selling a low cost carrier product at legacy carrier product prices. The legacies serve better food and drinks and include amenities such as reserved seating. Many aircraft at the legacies are also equipped with power ports and free in-flight entertainment. All you get at Southwest is a small cup of soda, a tiny pack of peanuts, a seat with no power and limited free content in terms of in-flight entertainment. People will often blindly book with Southwest without realizing that there are other options in the same price range however, this won’t go on forever and eventually Southwest will have to improve their service to stay competitive. Reserved seating anyone?
As Southwest becomes bigger and bigger it’s staff wants more and more money which brings us to my next point. The recent pilots contract. The airline now has the right to code-share with regional airlines to serve certain routes. Don’t think it will happen? Think again. The airline business relies on growth and there are only so many cities in the United States that are big enough for 737 service. Eventually to continue growth Southwest will have to begin to tap into smaller markets which will necessitate regional jets. Whether they are flown by Southwest or annother carrier doing code-share work the addition of regional jets will be a HUGE step towards being just like the other airlines.
Southwest needs to continue to differentiate itself in order to keep its extremely loyal following. If passengers can get a product that is the same or better at a better price they will and that is what competitors like American and Delta are offering. Southwest has always been the fun little low cost carrier but sooner rather than later they will be just like any other major U.S. airline. Boring and overpriced.