Southwest Airlines dominates Sacramento travel. What’s behind its recent meltdown?

The systemwide breakdown at Southwest Airlines over Columbus Day weekend left tens of thousands of travelers stranded after their flights were canceled at airports across the nation, including at Sacramento International Airport where it dominates the market.

The long lines and canceled flights were a startling scene for an airline known just a decade ago as one of America’s most admired companies, tops in customer satisfaction while making strong profits.

Now the company is struggling with tense employee relations and and a growing inability to get travelers to their destination in a timely manner. It also hasn’t made a quarterly profit since the pandemic began.

Airline management blamed the Columbus Day weekend mess on weather issues in Florida and a shortage of air traffic controllers at a tower in Jacksonville that caused a cascade of disruptions through its system. However, aviation analysts say operational issues may be the primary culprit for the airline’s problems.

The analysts noted a high number of cancellations and late flights in June. The airline blamed weather issues again along with an IT failure, which it said was due to human error. Other major airlines mainly went through the two periods in June and October without the service issues that occurred at Southwest.

Southwest’s recent problems with flight cancellations show the airline does not have a solid plan in place when weather or other issues occur, said aviation consultant Henry Harteveldt, president of Atmosphere Research Group.

“The airline has absolutely no sense of strategy when it comes to anticipating and planning for disruptive events,” he said. “Southwest has a very weak operational bench.”

The airline also has the worst on-time arrival record of any major U.S. airline from January to July. In July, only 67.9% of Southwest flights arrived within 15 minutes or less of their scheduled arrival time, according to the U.S. Bureau of Transportation Statistics.

Southwest’s problems come as the heavily-traveled Thanksgiving and Christmas periods are ahead, which could provide a crucial test for the short-staffed airline. The airline said it has hired 2,500 of the 5,000 people it plans to employ by the end of the year to replace workers who agreed to buy-out packages after COVID-19 struck and demand for travel evaporated.

Whether Southwest can reroute itself is of key concern to passengers flying out of Sacramento International Airport. It’s the dominant carrier at the airport by far, controlling 46% of departures, according to aviation data provider OAG.

That’s 75 daily departures on average in October compared to Delta Air Lines, the next biggest carrier, with 14% or 20 flights a day, OAG said.

Southwest leads Sacramento air travel, by far

Southwest is often the only carrier out of the Sacramento airport if you want a nonstop flight. This is particularly true flying to Southern California outside of Los Angeles International and San Diego International Airport.

No other airline has frequent direct departures between Sacramento and Southern California airports in Santa Ana, Burbank, Long Beach, Ontario and Palm Springs, routes relied on by state lawmakers, officials, business people and leisure travelers.

San Francisco-based analyst Harteveldt said he’s surprised that the airline named its Chief Operating Officer Mike Van de Ven last month as its new president, noting that Van de Ven was in charge when the June cancellations and late flights occurred.

Harteveldt said one problem at Southwest that resulted in “the complete meltdown of the airline” during the Columbus Day period was an inadequate number of pilots who could be used as a backup.

Airline analysts also say part of Southwest’s recent problem with cancellations is its primarily point-to-point flight system that can leave pilots scattered in different cities throughout the U.S when bad weather or other operational problems occur.

American, United and Delta have many hub cities where passengers connect and pilots and flight attendants are concentrated. This means they can recover easier, for example, from adverse weather.

Southwest officials have issued an apology to customers for the mass cancellations and lateness that occurred in the Columbus Day holiday period.

During the airline’s second-quarter earnings call in July, officials said the June cancellations and delays were also due to weather issues. They also cited an IT problem that they say was the result of human error. They did not go into detail.

The operational issues raise concerns about what happens during the coming holiday period when Southwest runs its largest schedules on a daily basis, said Peter McNally, an analyst at Third Bridge, a financial research firm in New York.

“If they are having problems now, it’s hard to see how things get solved when demand is higher,” he said.

Southwest pilots deny there was a secret walkout

The Southwest pilots union — which also pointed to the airline’s operational reliability as a reason for the rash of cancellations and late flights — is already at loggerheads with airline management over mandatory vaccine requirements for employees. The union is suing the airline in federal court to stop the vaccine requirements.

Over the Columbus Day weekend, as Southwest canceled more and more flights, rumors spread that Southwest pilots were involved in a secret walkout over the vaccine requirements. But the Southwest pilots have strongly denied that cancellations and delays were intentional.

In an op-ed piece in USA Today on Oct. 16, Capital Michael Santoro, the vice-president of the Southwest Airlines Pilots Association, said pilots were also stranded in various locations across the U.S. by Southwest’s latest problems during the Columbus Day holiday weekend.

Santoro blamed the Southwest IT system for the flight disruptions.

“Southwest Airlines management has consistently failed to invest in IT improvements that enhance stability and efficiency into the schedule,” he said. “This eventually contributed to many out-of-position pilots sitting unused in hotels while Southwest searched for more pilot volunteers to cover hundreds of flights that no longer had flight crews.”

Southwest officials have not discussed IT issues as being a cause of the recent cancellations and delays. They said the weather and control tower issues in Florida had a major effect on their flight issues because around 50 percent of its planes land in Florida on a given day. This causes a concentration of planes in the state.

Southwest officials had promised back in July during the earnings conference call with financial analysts that a key priority was to focus on “flight reliability” to avoid a repeat of the June problems.

How the pandemic is affecting the airline

The COVID-19 vaccine issue is another potential problem that could impact the airline’s workers going forward, potentially creating more staffing issues. Southwest as a federal contractor must meet Biden administration rules that all employees are vaccinated by Dec. 8, unless they qualify for medical or religious exemptions.

In an attempt to defuse the situation, Southwest sent a letter to employees on Oct. 8 stating that it would not put workers on unpaid leave on Dec. 8, if their exemption applications were still pending.

Neither Southwest nor the pilot’s union will say how many pilots are vaccinated. The union warns that if Southwest management carries out its threat to prevent pilots from working, shortages will increase leading to more flight cancellations and delays.

Part of Southwest’s problem —one affecting many other businesses during the pandemic — is how to ramp up operations again with customer demand coming back, but with staffing not back to normal.

Passenger demand for air travel is up to more than 80 percent of pre-pandemic 2019 levels nationwide. It’s a huge improvement from earlier this year when passenger levels were often in the 30% range on average.

The increased demand helped Southwest narrow its financial losses in the third quarter 2021. The airline reported Thursday a loss for the three-month period ending Sept. 30 of $135 million compared to more than $1 billion in the same quarter a year earlier.

Chief Executive Officer Gary Kelly addressed Southwest’s reliability issues in an earnings release.

“We were aggressive with our capacity plans for third quarter 2021, coming close to pre-pandemic third quarter 2019 available seat miles,” he said. “Our active (versus inactive) and available staffing fell below plan and, along with other factors, caused us to miss our operational on-time performance targets, and that created additional cost headwind.”

On Thursday afternoon in a call with financial advisors, Kelly was even blunt.

“I pushed a little too hard there in the third quarter with capacity,” he said.

He said the airline was reducing capacity by 8% in December and will continue reductions for 2022 to meet “more conservation staffing assumptions.”

Kelly did offer optimism for the airline’s financial performance saying pent-up travel demand by leisure travelers and a decline in COVID- 19 cases is resulting in bookings for the 2021 holiday season to be on par with pre-pandemic 2019 levels.

The passenger comeback has increased the tension between pilots and flight attendants and management who are being asked to work longer hours. Pilots and flight attendants say it’s an already tough environment in which they are being asked to enforce mandatory masking rules on planes.

The contrast between the rocky employee relations and the Southwest Airlines of the decade before couldn’t be greater.

The airline’s philosophy was to put its employees first, creating a loving atmosphere that would then rub off on customers who were then treated well. Ultimately, in a plan that worked for years, a trickle-down benefited company shareholders, who reaped the financial rewards from investing in the public company.

At least that’s how the financial equation worked prior to COVID-19 when the company made a profit every quarter for three decades.

The financial rewards to shareholders have disappeared since the beginning of the pandemic when Southwest began seeing its first losses in its 30-year history.

A history of operational expertise

Southwest, founded in 1971, initially only flew within Texas, and just to three cities: Dallas, Houston and San Antonio.

In the late 1980s and early 1990s, airline management expanded to California, picking cities like Sacramento, known for its limited service and high ticket prices.

Southwest featured no-frills: snacks only, no first class, not even an assigned seat, a practice that continues today.

But the airline charged low fares, waived change fees, and didn’t charge for baggage. Flight attendants and ticket agents were upbeat, winning customer support.

The airline was known for its operational expertise. Its personnel was able to load a plane in 20 minutes, beating other airlines by 10 minutes and allowing Southwest planes to spend several hours more each day in the air than other carriers, increasing profits.

Then there was Herb Kelleher. The airline’s co-founder was CEO until 1981 and chairman of the board of directors until 1987. Even after retiring, Kelleher remained a presence at the airline with a corporate office at its headquarters in Dallas. He regularly attended employee recognition dinners until he died in 2019 at the age of 87.

He was known for remembering the names of employees even as the carrier expanded to thousands of employees.

Kelleher was also known for his antics dressing up as Elvis Presley or settling a business dispute with a televised arm wrestling contest before the days of reality television.

In early January of this year, at the second year anniversary of Kelleher’s death, Southwest flight attendants were wearing buttons honoring Herb Kelleher.

Lyn Montgomery, president of Transport Workers Union local 556, which represents Southwest flight attendants, said the buttons had a dual purpose.

They were to honor Kelleher while expressing frustration at the airline’s current management who had overworked the attendants.

She said some of the family atmosphere fostered by Kelleher ran the airline was gone.

“People feel the culture is slipping away,” Montgomery said.

Southwest is a much bigger corporation than when Kelleher was in charge, said Austin Horowtiz, principal aviation consultant at consulting firm ICF.

He said it takes longer to load larger planes and operational challenges have increased as the airline has doubled the number of destinations it serves from 20 years ago.

Southwest currently has more than 54,000 employees, more than double the number when Kelleher was in charge. The bigness makes it hard to continue the positive family atmosphere, Horowitz said.

“I think as any organization grows larger, including an airline, the culture is something incredibly difficult to retain,” he said.

How the system broke down in Sacramento

There was no Southwest magic of old on Columbus Day at Sacramento International Airport’s Terminal B. Long lines formed to check bags at the Southwest counter for the lucky passengers who were flying that day. Others waited to talk to ticket agents about how they would get home after their flights were canceled.

Some passengers got the bad news as soon as they approached the ticket agent, who informed them that in some cases the earliest Southwest could fly them home was Thursday.

Some travelers hurried to Terminal A where they bought a second ticket, selling out every American, Delta, and United flight.

Between October 8 and 11, Southwest out of Sacramento International Airport canceled 16% of its 280 departures and 39% saw delays of 15 minutes or more, according to aviation data provider Cirium.

The worst days at Sacramento International Airport were Saturday, October 9 and Sunday, October 10. On each of those days, 27% of Southwest flights were canceled. Flight delays of 15 minutes or more amounted to 34% of Southwest departures on Saturday, increasing to 37% on Sunday.

Nationwide, Southwest canceled 1,000 of its 3,600 flights on Sunday, Oct.10 —the worst day — accounting for 28% of its entire flight schedule.

On Columbus Day, Oct. 11, flight cancellations at Sacramento International Airport were reduced to 12% of departing flights but flight delays increased to 52%

Even on Tuesday, the day after Columbus Day, the airline was still in recovery mode. Flight cancellations in Sacramento were down to three on that day, but more than 55% of flights were delayed.

Despite its problems, Southwest still has loyal fliers like Gary Grossman on its side.

Grossman spent eight hours at Sacramento International Airport on Columbus Day after his morning flight to Phoenix was canceled and he and his wife Jennifer were forced to wait for a new plane.

Grossman was not happy about the delay, but he’s a long-time Southwest user. He said the airline’s frequent departures from Phoenix and its pricing often beat other airlines.

Sure, he’s packed like cattle, like on other airlines, but Grossman noted that most Southwest flights are short hops.

Grossman said two $200 flight vouchers for him and Jennifer from Southwest to compensate for the delay were appreciated.

“That went a long way,” he said.

Grossman said he plans to remain a loyal Southwest customer because usually, the airline is reliable.