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Southwest Airlines, George Santos, Clear Secure

Happy holidays to everyone! I hope everybody survived. I hope that tons of snow (Buffalo, New York), bitterly cold wind chills, and subzero temperatures didn’t freeze out your holiday spirit.

Just before Christmas, a large cold front moved across the country. It brought severe winter weather to most of the country. Besides the freezing cold temperatures, wind gusts in the 40- to 50-miles-per-hour range made this a severe winter storm. On December 23, as winter storm Elliott hit the Midwest, over 4,500 flights were canceled. With Christmas just around the corner, this was disastrous for holiday plans. Over the next two days, Americans seemed to figure out how to get where they were going.

Unfortunately, that’s not true. Tens of thousands of Americans were stuck. They had no way to get to where they needed to go. While major air carriers like American Airlines, Delta Air Lines, and United Airlines managed to get their planes back on schedule relatively quickly, Southwest Airlines continued to struggle. A week later, Southwest Airlines continued to cancel more than 2,500 flights a day. Passengers were stranded hundreds of miles from home. Southwest had no answers for them. Why? Why was Southwest Airlines so out of step?

Let’s remember that we, the taxpayers, bailed out Southwest Airlines early in the pandemic. We handed them over $7 billion. Billion. This was done to prevent massive layoffs in the travel industry, which would have crippled our economy. So, I think that we should be able to ask Southwest for some customer service for our money.

A failed business model

Some of the problems lie in Southwest Airlines’ business model. Major air carriers like American Airlines, Delta Air Lines, and United Airlines use a hub and spoke model for their flights. For example, American Airlines has five or six major hubs throughout the United States. To get almost anywhere on American Airlines, you need to go through one of those hubs to connect to a remote location. For example, if you wanted to fly from Asheville, North Carolina, to Miami Beach, you have to fly into Charlotte, a major hub for American Airlines.

Southwest Airlines is different. They have a point-to-point model. For example, you can fly on Southwest Airlines from Oklahoma City directly to Phoenix. If you are flying on a major airline like American, to get to Phoenix, you would have to fly from Oklahoma City to Dallas (a major hub) and then Dallas to Phoenix. So, besides the cheaper fares, you also save time at the airport with Southwest.

The point-to-point model works great until you have a major weather event like winter storm Elliott. Now you have airplanes scattered all throughout the country, but they’re not in the right location at the right time. This makes logistics extremely difficult. One would figure that Southwest Airlines would have a sophisticated employee tracking system. This system would tell them where their pilots are as well as where their stewardesses (flight host/hostess) are located.

Unfortunately, they don’t. Southwest pilots have been sitting in airports waiting on assignments right beside angry passengers waiting on planes. To get this complicated system back online, Southwest Airlines must cancel thousands of flights to get their airplanes, pilots, and crew back in the right locations. It is still unclear to me why it takes nearly 10 days to make this happen. This is a huge failure of big business. The next time someone tells you about how great business is at efficient use of resources, point to Southwest Airlines.

By |2023-03-21T12:25:16-04:00March 21st, 2023|Business, Congress, Party Politics|Comments Off on Southwest Airlines, George Santos, Clear Secure

Vikram Pandit is out at Citi

Vikram Pandit came in as the Citigroup CEO back in 2007. Remember that there was a ton of stuff going on the financial world in 2007. It blew up. I have no idea whether or not Vikram Pandit was a good or bad CEO. All I know is that Citigroup is a huge company. I think it would be hard for any one person to get their arms around this company.

From WSJ:

Vikram Pandit, who was named chief executive of Citigroup Inc. C +1.61% on the eve of the financial crisis and led the bank through a bruising five-year stretch that included a $45 billion federal rescue, abruptly stepped down Tuesday. (more…)

By |2012-10-17T20:55:31-04:00October 16th, 2012|Economy|Comments Off on Vikram Pandit is out at Citi

A few thoughts – Tuesday Evening

Cry me a river

Someone get me a box of Kleenex. I think I’m gonna have a good cry. Bank of America is no longer the largest bank in the United States. As the American people are suffering, the folks in the financial sector are partying like it’s 1999. Higher profits all around – Citigroup, Wells Fargo and Bank of America have all reported higher profits.

From EPI:

-11.3%, -6.6%, -4.5%: The change in family income between 2007 and 2010 for the bottom 20 percent, middle 20 percent, and the top 20 percent, respectively
$6,298: The decline in median working-age household income from 2000 to 2010
$5,494: The decline in median African-American household income from 2000 to 2010
$4,235: The decline in median Hispanic household income from 2000 to 2010

By |2011-10-18T21:20:27-04:00October 18th, 2011|Economy|Comments Off on A few thoughts – Tuesday Evening
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