Is Southwest Airlines in trouble?

[Out of Steam]

When we lived in the Maryland suburbs of Washington, DC, our family often flew Southwest from Baltimore-Washington International. We were generally pleased with their service, though their limited food offerings and cabin layouts are less than comfortable beyond a four hour flight. We moved away shortly before the pandemic, and our local airport is dominated by Delta and American Airlines. I prefer Delta, but American seems to work for us more often. Local Southwest service is quite limited here and I've only flown on them once since moving--in 2022.

With a new CEO, charging for checked bags, the coming change to assigned seating, and delays in delivery of 737 MAX planes, recent stories about Southwest are very negative about its future. High labor costs associated with their workforce seniority, and the decline of budget airlines more generally, are also cited.

Since people here fly more often than I do, and have a better feel for investing, is this a real decline? If you fly them, have you experienced problems with Southwest's service?

 

[Ronstar]

We used to fly SWA a lot, maybe 15-18 flights a year. Service seems about the same now as before. But I did notice that as time goes on, I get worsening line assignments even though I check in exactly on time. Recently in the mid C line. I asked the gate desk about the cost of an upgrade to the mid A’s. IIRC, it was about $140 for the upgrade. Didn’t do it.

Our last flight encountered some mechanical problems taxiing out of the gate on departure, and we had to circle back and take a different plane. That was a first for us.

 

[Texas Proud]

I have not flown Southwest in decades... I flew them mostly between Houston and Dallas when working... they fly out of Hobby here which is much father than IAH... and they are not competitive for the flights we want.

I never did like their service... just a cattle car in the sky...

 

[Montecfo]

I do not mind flying them but rarely are they best or most convenient choice for me.

 

[Out of Steam]

I never did like their service... just a cattle car in the sky...

Their service seemed most suitable for flights of two hours or less. Our most frequent flights were Baltimore-Providence and Baltimore-Manchester, NH.

 

[CaliKid]

We fly a lot and fly Southwest the most. We really like them. Been companion pass holders for most of the last 15 years and it works for us. Living in the west they are great as they have so many flights. We'll see how the changes work out but it seems they will just be like every other airline starting Jan 27th. Time will tell if they come up with a new way to differentiate themselves from the pack.

 

[cathy63]

Southwest used to be a cheaper alternative for the short 1- to 1.5 hr flights between SAN, PHX, LAS, SFO, OAK. We do a lot of those trips, so we used to fly them a lot. They also won a contract with the government, so I had to fly them cross-country when I worked as a Fed contractor, which I didn't mind. I always liked choosing my own seat and thought their cabin crews were the nicest in the industry and the least regimented. Every once in a while you'd get a flight attendant who set the safety briefing to music or told jokes to get your attention.

Then about 10 years ago, their prices crept up to where they were the same or higher than United... then we retired and started driving to those destinations more often than flying... and now they're more expensive than everyone else and providing the same or worse service.

So yes, I do think their future doesn't look bright. I wouldn't invest in them unless they were a takeover target and stockholders might get a nice bump from a merger.

 

[Winemaker]

We fly them mostly because of short flight routes, direct flights from PIT to our favorite locations, and we qualify for the Companion Pass. We do fly other airlines as well. Unless one flies 1st class, ( I've never flown Business Class), you're on a meat wagon/cattle car.
DF was employee of a major airline when I was a kid. Flying was expensive for most, and when people flew they wore "church clothes". After deregulation in 1979, prices fell, airlines went to the hub and spoke system, and DF w*rked at a different airport for 15 years, until he got called back to PIT.
Southwest had some recent run-ins with a shareholder who demanded some money making changes, as assigned seats, and charging for bags. It has angered the loyal customer base somewhat, but we'll see when the next earnings report, if it's eventful.
It's the only airline where I can leave PIT 5AMish in the morning, and be sitting at one of my favorite California wineries at 11:30AM.

 

[Out of Steam]

We used to fly SWA a lot, maybe 15-18 flights a year. Service seems about the same now as before. But I did notice that as time goes on, I get worsening line assignments even though I check in exactly on time. Recently in the mid C line. I asked the gate desk about the cost of an upgrade to the mid A’s. IIRC, it was about $140 for the upgrade. Didn’t do it.

Good to hear that their service doesn't seem to be deteriorating. The worsening line assignments, and the need to instantly check in when it opened for a flight, were going on even before we stopped flying them in 2019.

 

[Dtail]

Didn't like the no seat assignment, but that is changing now.

 

[Lorenzo]

I have not flown Southwest in decades... I flew them mostly between Houston and Dallas when working... they fly out of Hobby here which is much father than IAH... and they are not competitive for the flights we want.

I never did like their service... just a cattle car in the sky...

Most US airlines are like that now--cattle cars in the sky. Southwest pretty much pioneered it. They became a victim of their own success as others followed their lead. What I like(d) about Southwest was that they rarely tinkered with their model and rules, while other airlines were constantly changing things--likely to cut costs. That, too, may be part of Southwest's undoing. Commendable but perhaps not sustainable in the long run against the competition.

 

[wrigley]

Didn't like the no seat assignment, but that is changing now.

And you will surely pay more!

 

[aja8888]

And you will surely pay more!

They are the last of the "everyone needs to pay up" crowd these days! Think about it, it's everywhere.

 

[athena53]

You got me curious so I checked the summary research score for the stock (LUV) on the Fidelity site. It's a weighted average of analyst opinions, weighted on how good their past track record is. LUV is at 2.2 out of a possible 10. Five analysts are Neutral, one Underperform, one Sell.

As a consumer- I've flown them a few times. I liked their cheerfully and unabashedly low-cost model, their genuine attitude that we were customers (not self-loading cargo) and their highly efficient boarding process. From what I can tell, none of these applies anymore.

It's unfortunate that the boarding process became a lot more cumbersome when more people started requesting wheel chairs and apparently the family members were either permitted to board early with them or the wheelchair passenger saved a bunch of seats. The vast majority of these passengers were miraculously healed upon landing. Since airlines aren't permitted to ask for verification that a passenger needs a wheel chair (for good reason), the policy was easily abused.

 

[MuirWannabe]

SW is still often cheaper than the big boys. But less often cheaper than in years past.
But judging by how full their flights are, they must be doing fine. No question the culture has changed as happens at many megacorps. I think a large shareholder really pretty a squeeze on them in the last couple years.

 

[sdawson]

I flew Southwest a lot from 1997 through today. From 1997 - 2020, I made 48 flights per year.. It has slowed down since then, but still 20 flights a year or so.

When I started, SW was hands down the best airline. But they have slowly at first, then finally ruined the experience. The people are still great, but the polices have made them just another airline.

To be clear, here is the degradation I have seen:

Seats used to be cushiony and comfortable. They are now equivalent to bus seats -- uncomfortable and horrible on myh back.

Bonus flights used to be based not on 'miles' which they manipulate, but fligths flown. 16 flights (8 round trips) == 1 free ticket. So I could get muliple free trips a year. They took that away and switched to the terrible 'miles' same as all the rest.

Seats were assigned on a first-come first serve basis at the check in counter. Folks waiting the longest at the airport had earlier access. That was switched to online checking time, and that was further limited so the best one can hope for with just a normal ticket is the mid B's.

Open seating made everyone equal. This is now going away, same as the rest, those who pay more get better seats.

Two free checked bags was a huge benefit. They are switching to charging for bags now.

Drink coupons were easy to earn (they just show up in the mail) and easy to use. Not anymore.

That is the progression of SW. Other than their people, who are still fantastic, SW has turned into just another airline -- same policies as all the others. They are not differentiated now, as they once were.

I still will use them -- if their flights fit my schedule and if the distandce is short and if they are the lowest price. But I used to just be able to use SW and know it was the right choice. Those days are gone. I expect they hope to make up in volume what they are losing in customer loyalty.

 

[USGrant1962]

I almost never find SW to be cheaper than the AA or UAL from the DC area.

 

[Out of Steam]

You got me curious so I checked the summary research score for the stock (LUV) on the Fidelity site. It's a weighted average of analyst opinions, weighted on how good their past track record is. LUV is at 2.2 out of a possible 10. Five analysts are Neutral, one Underperform, one Sell.

Stock analysts posting a Sell rating is quite rare.

 

[Out of Steam]

Seats used to be cushiony and comfortable. They are now equivalent to bus seats -- uncomfortable and horrible on myh back.

This seems to be the norm on newer narrowbody aircraft.

 

[MichaelB]

I think SW made a mistake changing their business model and will find it more difficult to compete. They were my go-to when booking a flight for my brother because I could change flights with no penalty and didn’t nickel and dime me. They had a service distinction that built a loyal customer base and now they’ve thrown it away.

I don’t see any advantage now when competing against AA/UA/Delta, and those 3 have very good loyalty programs.

I think in 10 years they will be a Harvard Business School case study on bad strategy.

 

[Flieger]

I don't fly them often just because the times are not convenient. I always look for the best times, then price.

I do know some that flew them almost exclusively and they are all upset about the bags change, etc. but fail to realize that since they ALREADY have the SWA credit card to accumulate even more points, they get free bags anyway. They now say they will fly other airlines just to make a point, but they will have the same with other airlines, so they gain nothing.

Flieger

 

[audreyh1]

I think SW made a mistake changing their business model and will find it more difficult to compete. They were my go-to when booking a flight for my brother because I could change flights with no penalty and didn’t nickel and dime me. They had a service distinction that build a loyal customer base and now they’ve thrown it away.

I don’t see any advantage now when competing against AA/UA/Delta, and those 3 have very good loyalty programs.

I think in 10 years they will be a Harvard Business School case study on bad strategy.

The founder probably would never have changed that business model which gave them a moat.

However the wheel chair shenanigans are super annoying. Why did that get so out of hand?

 

[Surewhitey]

I'd prefer them as their hub is 20 minutes from the house. Lack of direct flights & cost is the biggest problem for us. AA is the 900lb gorilla in DFW and plenty of others to choose from a much larger & diverse route option.

 

[tutan]

I like their open seating and “free” ckecked bags. Now they will be just another airline. I find it a good challenge to try to check in at exactly 24 hours before departure to get in the A boarding group.

 

[MichaelB]

However the wheel chair shenanigans are super annoying. Why did that get so out of hand?

Is wheelchair abuse more prevalent at SW than other major airlines?

When I fly UA or AA I see dozens of people board before group 1 is announced. It seems hard to believe it could be any worse at SW.

OTOH, with the other major airlines even when one abuses the early boarding process, seats are already assigned. With SW, the abusers get first pick of choice seats. It’s easy to see how that would make customers angry.

Airports are very stressful places. I would hope a major change by an airline or airport would lead to making travel a bit easier or less stressful in some way. The only advantage I see with this move by SouthWest is premium customers will now be able to reserve their preferred seat. Maybe, and for a price.