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Comment from the Southwest Pilots Union...

>SWA has claimed that the immediate causes of this weekend’s meltdown were staffing at Jacksonville Center and weather in the southeast U.S., but what was a minor temporary event for other carriers devastated Southwest Airlines because our operation has become brittle and subject to massive failures under the slightest pressure. Our operation and our frontline employees have endured continuous and unending disruptions since the first time our airline made headlines in early June due to widespread IT failures. Our Pilots are tired and frustrated because our operation is running on empty due to a lack of support from the Company.

https://www.swapa.org/news/2021/swa-in-the-news/




> our operation has become brittle and subject to massive failures under the slightest pressure

I somehow notice a lot of this lately, in many different areas. I wonder if there isn't a common cause behind those. Is it just covid or something bigger?


It is large due to corporations taking on lean-business models from MBAs over the last decade+. When a business runs lean, it becomes more fragile to disruptions. Unfortunately due to our economic system, there is a semi-regular boon-bust cycle, so if it wasn't COVID, it would have been something else that kicks the stool out from under the legs of these corporations.

In the past this wasn't as big as an issue because the risk was spread out amongst a multitude of small to medium size corporations. But again, over the last few decades corporations have become mega-conglomerates through buyouts and mergers/etc... Too big to fail. All the eggs in fewer baskets. Again, in an attempt to keep growing, because in our current economic system and the culture promoted in it (partially by MBA's) is the idea that if your company isn't growing it's dying. And even if it's growing, if it's not growing by a large enough amount it is failing...

So you could have a 1,000 person corporations stabley making 100 million in revenue. Providing good benefits and salaries to all. But if its not growing, then it is viewed as failing ... It's truly an absurd mindset and culture.


As an MBA with BSEE/MSEE, this is exactly correct. Too many take the degree and training as a blindly followed cookbook rather than just "ideas to think about and think of trying". It SHOULD BE the latter!!

The "religion" of profit maximization and cost minimization has a price - it's NOT GLOBALLY OPTIMAL OVER TIME for the survival of the organization (profits, anti-fragility, etc.) nor for the larger system of a national or global economy.

Mathematically, flat, non-cycle economic systems are IMPOSSIBLE. You can never achieve it WITHOUT introducing systemic instability because you are eliminating ALL the information REQUIRED to maintain feedback control and you are removing agility of the system. Once the error signal goes to zero, the system is 100% out of control! It's open loop. Then any "environmental" change can tip the entire system over where that could be a competitor, other nation or "act of God" disruption.

And this is what happens when you profit maximize/cost minimize to its ultimate limit. And on the way to that extreme, you are increasingly make the system more brittle and the probabilities of failure increase.

Re having all people being "productive", the reality of things like Price's Law also make reliability worse as an organization (corporation, government, etc.) grows.

Price's Law says that the number of people who actually do most of the work is proportional to the square root of the organization size. In the case of supply chains, most of the people who are "assuring system reliability" actually aren't and generally are incapable of doing so anyway. It's a reality due to network effects (adverse ones but the same dynamic as the good ones - you can't control or differentiate the two).

Note you can take it to the other extreme: not worrying about profits is just as bad if not worse. Socialism/Collectivism doesn't work either for similar reasons actually.


Your anti-MBA, anti-profit-maximization rant misses one thing: Southwest is the only major US airline with zero bag fees (for the first 2), no business or first-class cabin, no seat upgrade charges, and until recently, the only one with no change fees (other airlines backed off change fees during the current pandemic). It doesn't chase major international routes, partner with 3rd party booking engines, or fly overnight/redeyes. LUV has consistently, for 40+ years, optimized its culture over profits.


>LUV has consistently, for 40+ years, optimized its culture over profits

Something has changed in the last 10 years - the last five in particular. I obtained my frequent flyer number from them in 1985 and have flown them hundreds, if not thousands of time so yeah, I have a LOT of experience to draw from.

A great overview of how they have optimized to the extreme to their detriment is by Juan Browne: https://www.youtube.com/watch?v=kO39nIcuPhQ

If HK were still alive I sincerely doubt they would be operating the way they are today :(

Luckily I'm getting ready to move back to the west coast and shouldn't have to fly regularly again - thank god!


HK = Herb Kelleher, founder and CEO of Southwest Airlines

He stepped down just a few years before his death, in 2019.

A colorful character and legendary driver of the culture at Southwest.


But isn't this the exact point of operation, controlling and finance in any large corporation wants to find? Extract from bottom to the top until it breaks and then hope to steer back a tiny little bit and keep operating in that state?

Finance never did produce, it's whole purpose is to extract.

Run a gasoline engine to lean and it will start to heat and stutter...

As for the growth, in a peaceful society you can grow as much as the amount of people you supply, so without war there will probably no other way than saying goodbye to growth.


No company wants it to break to the point of "meltdown". From a practical view, it loses too much money. From a (maybe, maybe not) cynical sense, it makes it too obvious how much they're extracting from the bottom and invites action from the government or workers.


I don't know about that, with P/E ratios as high as they are I think investors assume companies will have an infinite lifespan.


With P/E ratios as high as they are I think investors are desperate and don't have anywhere else to put their capital.


Naive finance works that way. Sophisticated finance prices-in downside risk.


Yes, but with finance based on transitory MBA executive suites job-hopping around the corporate world, the right play is to price in the risk during your term and a bit after, so the 10-year risk is ignored, but if you can strip everything out of redundancy, product development, etc., the numbers will look better for a while, you get your bonus package, and move to the next opportunity/victim.

When things have been built to last, there is a lot of "fat" that can be cut - for a while.

The numbers will always look better - until they don't.

When the music stops, the "lean" "financial engineers" will be long gone, and those still there will have not the slightest clue how to re-start a culture of serious product/service development or robust operations, and the corp falls into a death spiral.

If you are a trader, you DGAF.

If you are an investor, watch for numbers improving without product and operations improving, and new markets being opened.


I was not disagreeing. The biggest problems come where finance is not sophisticated and management is seduced by cost cutting. Those often go hand in hand.


Sure that's the theory. But how do you accurately price in risk for rare events? The uncertainty is so large that any price you set is effectively just a guess.


Insurance and derivatives are supposed to find prices for rare events. And if an organization can't insure or securitize a risk it should make them think real hard about mitigation.


You guess based on data and do your best, that is more or less how all expert opinion works. An actuarial table also doesn't tell you anything about what will happen, but it allows you to do your best.


> But if its not growing, then it is viewed as failing

I’ve only seen this in wealth generation instruments. Outside of those, I haven’t seen much of the “culture“ you’re referring to. In that framing, I think it makes sense and is anything but absurd.

The company is dual purpose at this point: part original mission (airline) part communal investment. Being a great airline that is comfortable with its current market definition isn’t sufficient for its second purpose. The commune’s investment expects growth in the abstract sense. They aren’t interested in Airlines, they’re interested in purchasing a piece of future growth.

Your Vanguard mutual fund’s performance depends on exponential growth - healthy retirement strategies live primarily off of growth, not principal, during the retirement phase. Maintaining value (~+2% on paper growth) doesn’t earn your company a place in society’s communal pool of assets.


Take a look at earnings reports...a company that doesn't grow from last quarter is considered a failure. A company that grows but doesn't hit goals from last quarter is considered a failure.


> take a look at earning reports

Aye, I think that’s the point I’m making. Earning reports are for public companies. The company is part of society’s communal wealth if it’s publishing a quarterly earning report. Check out the companies not posting quarterly earning reports - because they aren’t publicly traded - and not building towards a public offering; I don’t think you’d find this same “culture.”

In your scenarios, the public communally purchased shares of future growth, priced in against the stated goals - and the public’s confidence the company would reach those goals.

What other outcome would you expect? If you think this is the market being irrational, you -personally- can buy at the “failure” price. If you’re right, you’ll do well over a long time horizon.


"Lean" is an idea that worked so well at first that it transitioned from being a brilliant insight into finding "stale" capital hiding in in-process inventory and parts to being a management fad, applied to things that do not actually benefit from the approach. It's not the only thing that went that way.


"Car Guys vs. Bean Counters: The Battle For the Soul of American Business"[1] by Bob Lutz tells this story really well, from Lutz' vantage point trying to salvage General Motors from the clutches of an army of MBAs.

There's a decent summary of the book (and the general problem) in the 2012 Time article "Driven off the Road by MBAs"[2] as well.

[1] - https://www.amazon.com/Car-Guys-vs-Bean-Counters-ebook/dp/B0...

[2] - http://content.time.com/time/magazine/article/0,9171,2081930...


Your opening statement impresses me as a rather gross generalization. Kind of pro-union, anti-big business.

Nothing wrong with making an effort to lean out an organization, which is simply meant to make it more efficient and more competitive. It's not specifically just cutting staff, it's a lot of things. The trick is to not confuse leaning out with cannibalization. Like Musk says, if you aren't having to add stuff back in, then you aren't deleting enough.

The airline industry is under insane pressure given the environment, and this stuff is bound to happen. Safety may even be unintentionally sacrificed. This space is far from thermodynamically sound right now. If somebody has an easy answer for it, that would be some fat consulting stacks for the BTC fund.

I'll counter your generalization with my own: F250's are hammered with middle-management baggage. MM makes shitty decisions, and still causes tons of wait states. Having consulted for five F500's now, my observation so far is that the 250-500 range are much more incentivized to do what it takes to become more competitive. OTOH, the F20's I've consulted for severely need some waves of boomer (my gen) retirements.

BTW, the general reason M&A activity increases is because the associated market space has contraction pressure on it. What else are you supposed to do? The beginning of the end for markets, governments, empires. That's just the way us humans do things.


Your hate of MBAs is unfounded and unproven. Their COO has worked there since 1993, and doesn’t have an MBA: https://www.swamedia.com/pages/michael-van-de-ven


MBA here. Does not sound like hate but statement of fact. In my experience the US MBA and general management management teaching is very dollar-based in stark contrast to, say European management education. This will lead to extreme efficiencies and the M&A boom of the past few decades is probably linked to it as well. And it does not have to be the CEO: most practical daily decisions cutting all buffers for maximum efficiency are made by mid to upper management.


It's not really MBAs, more like "business rules cult". MBAs are just the primary vehicle through which these viral rules of operation have spread. For example, when I worked in semiconductor manufacturing in the 90s you'd constantly hear at management training seminars "reduce inventory because it costs money". Also "offshore because it's cheaper" and "outsource activities that aren't core to the business". Every single one of these things has a downside, often not visible until "bad stuff happens".

These trite rules get repeated so often they become like The Mandalorian "This is the way".

I think every industry is full of this kind of nonsense. Some closer to home examples : everything needs to be in the cloud; immutability is good; use 3rd party SaaS services for everything; code comments are bad; ...


> use 3rd party SaaS services for everything

OTOH didn't Facebook just demonstrate why building everything in-house is dangerous?


Dangerous is a word that doesn't actively justify trade-offs. With SaaS offerings, you're trading opex costs to save on capex costs, which can mean a really big difference in terms of opportunity costs. You also are paying for the expertise that you'd need to develop internally otherwise. These aren't simple black and white choices. Operating at FB level scale means that saving 2% on your cost of revenue is billions of dollars. If this is the only "Big" outage FB has for the next 2 years, and it's saved them billions of dollars, isn't the fairly small risk of a single point of failure worth it?

You have to accept some risk, and it's often hard to compare risks on the business side vs risks on the technical side.


If you use a saas for login, one for business process A, one for business process B, C, D,... if just one of these fail, you might be at risk of losing business and huge amount of money for something you have no control on.

You are lowering you cost but by doing so, you are increasing your risk.

Furthermore, by using external saas, some business will have a tendency to get rid of some IT people to "really" save on cost which means you'll lose manpower for when something happens.

Software development has changed in the last decade and now everybody knows that they have to take failure into account when building software. Chaos Monkey opened the eyes of a lot of It people.

There should be some "MBA" level chaos monkey solution.


Your statement shows lack of understanding of how the modern corporation works.

The COO may have been there 30 years, and may lack an MBA, but increasingly it is this type of CxO that has been reyling upon MBAs and other consultants (operations research) to restructure the organization into an optimized-but-fragile state.

It is the rare old-hand that can standup to younguns talking tech and math, subjects he does not feel comfortable with.


Such a bizarre statement to imply that old people don't understand math, and all but destroys any credibility for the rest of your comment.


Not disagreeing, but also I don't think it's even necessary for any MBAs to be involved (although such a corporate structure would be very unlikely). All that's needed is a set of incentives that reward a certain style of business to the detriment of others. Based on our total set of economic policies, the US has those incentives in many (most?) sectors of the economy.


> a set of incentives

money, responsibility, prestige

> that reward a certain style of business

profitable, growing, innovative


Are you suggesting that old people uncomfortable with math and tech are the best people to be leading major corporations? Even Herb Kelleher was only 40 when he started Southwest.


Southwest is literally the poster child of low cost carriers. They started the whole business model, which consists of a few things:

* they operate literally one type of aircraft, and therefore only have to train their crew once, keep the specific set of parts, etc.

* they optimize the hell out of making sure their planes are in use carrying paying passengers for the maximum amount of time

* they fly a vast network of point to point using secondary airports, as opposed to coordinating at massive hubs

These are all things that would make recovering from a massive widespread disruption very hard, and Southwest has been doing it better and longer than anybody else.


How operating one type of plane makes recovering from disruption harder? I'd expect it to make it easier - you can replace any crew with any other crew, and any plane with any other plane. Same with secondary airports - I am not sure how it makes recovery harder. Distributed systems are usually more robust against disruption that centralized ones - if you can't fly in an out of the hub, then all your flights in that hub's vicinity are grounded, but if you just lost one secondary airport, there might be another close by. So I'm not sure I am convinced those particular qualities are detrimental to robustness, at least without a convincing argument.


well, as an example, when the 737MAX was grounded, many airlines had already started taking delivery of them and were operating them. Southwest was the largest recipient at that time.

Southwest had plenty of older 737s as well, but the new MAX planes both fly farther and have more seats, so while the grounding was in effect Southwest was essentially paying to keep the things on the ground while scrambling to reconfigure their flight network, and it affected them the most.


Single AC fleets mean an airline has somewhat of a single point of failure. If the issue at hand is caused by that point of failure, sure recovery will be harder. In most other cases it makes it actually easier, at least on paper. No need to get crews to certain planes, just a crew to a plane, as every crew is certified on any plane.


And people wonder why Boeing made such an effort to not need different pilot training for the MAX.


People don't really wonder that though. The potential for it to be beneficial to their customers is obvious.


I wondered always why people wondered. Airbus went to great length to make cross-certification of pilots possible for that very reason.


Nobody is wondering anything. Advantages are obvious. They were wondering why you’d prioritize that over the aircraft’s ability to stay in the air.


I've followed many 737MAX threads on HN, and they sure did dismiss this issue. It was always "why didn't they design a whole new airplane from the ground up".

> why you’d prioritize that over the aircraft’s ability to stay in the air.

This is an egregious misunderstanding. There was nothing wrong with the purpose of the the MCAS system nor the concept of it. What went wrong was its failure to follow the dual path design, and do a proper failure analysis of its design. There was a further problem with some pilots not understanding how to deal with stab trim runaway.

These problems have since been corrected, and MCAS is still on the 737MAX.


To be fair, there is more than one way to skin a cat, though it wouldn’t have worked for Southwest.

They could’ve made a small sized aircraft that had commonality with the 787 rather than the 737.


IIRC a few 737MAXs fell out of the sky. Clearly there being nothing wrong with the purpose nor concept of MCAS wasn't sufficient to keep the airplane from crashing.


MCAS in itself doesn't seem to have been the problem. The fact that MCAS relied on a single sensor (no idea how that got certified in the first place) and that pilot were not aware of MCAS and how it worked were the problems. The latter was due to Boeing trying to avoid re-training and re-certification of air crew.


> pilot were not aware of MCAS and how it worked were the problems

If the pilots followed runaway trim procedure, which is how the MCAS failure manifested, they would have been fine. In fact, that's what the other unmentioned crew of a 737MAX did that survived MCAS malfunction and landed without incident.

Boeing issued an Emergency Airworthiness Directive about the procedure, which the Egyptian Air pilots didn't follow, either.


I thought there were some conditions in which manually adjusting trim became physically impossible (or at least extremely difficult).


If the wheels fall off your car, is the problem with the purpose or concept of wheels, or is the problem with weak axles?


Errr... I never said anything at all was wrong with MCAS.


The utilization rate is so high that specific planes and crew are needed in specific times and places.

If plane going from A -> B is late it cannot become flight B -> C. If crew for this plane are stuck in the ground long enough, they have to wait til the next day to fly as they‘re only allowed to be awake and work for so long.


> Distributed systems are usually more robust against disruption that centralized ones

Distributed systems can also be more complex to re-converge after a major disruption.

I'd imagine it's non-trivial to re-plan a network, given equipment and crew limitations.

And as context, we're talking about 24 hours later, now?


Yeah. Part of Southwest‘s high utilization rate is their ability to turn around planes and crew quickly.

In the event of widespread disruption, planes will not make it to their next airport to become a different flight, nor will their crew. Crew can also only be awake and working for a limit of time, so if the disruption causes a crew to go over that limit they are not going out until the next day, etc.

With cloud computing, it‘s a bit different because which host you‘re using in a region doesn‘t really matter, but for airline a specific plane with specific people need to be in a specific time and place.


But not using the same plane would not make it any better, neither would using a hub - that's my point. This is a common problem, but the properties outlined in the parent post which are supposedly specific to SW do not make the problem worse.


Maybe it's the same effect as happens with monoculture (https://en.wikipedia.org/wiki/Monoculture#Risks): more efficient, but more fragile/risky?


They used to be a low-cost carrier but they're pretty average now in terms of cost. They've been replaced at the lower-end by Spirit.


They're no longer low cost because of service erosion at the main carriers (squeezing more seats in, getting rid of baggage allowances, etc.). As a result of that erosion and southwest's holding the line, they are now one of the higher quality carriers (and some would say one of the best!). An interesting course of events to get us here...


Spirit & Frontier (and Ryanair in Europe among others) are actually classed as ULCC's (ultra low cost), where everything is nickel and dimed.

At the higher end, it certainly isn't necessarily the best any more, but I do think that's mostly because Southwest has kept to its two free checked bags, whereas the major carriers now make significant revenues from checked bag fees.


It took one trip for Spirit to go onto my personal No Fly list.

While Southwest remains my favorite airline.


I took my first and last Spirit flight ~7 years ago to fly cross-country. It honestly felt at some points like the plane was going to fall out of the sky.


And Frontier. They're the first one that comes to mind when I think "cheap".


This is only “a failure” if the loss from this is worse than all of the money they have saved over the years by running so lean.

This type of event is the obvious possible downside that is well known when you structure a company this way. It’s not that events like this aren’t expected, it’s that prepping for them costs more than the loss from not being able to absorb them.


I‘m sure you‘re just describing what is, but...

The human element doesn’t matter at all? Their workers are fed up.

This tunnel visioning on financial metrics is so superficial and narrow that it makes me angry. A company is a community of interacting, real people, not a video game.


Going out of business doesn't help the workers, either.


My point is: "If you only look at financial statements, you lose the big picture" and not "don't look at financial statements".


Southwest is one of the better carriers in terms of customer satisfaction and not racing to the lowest fare.


The money they earned in the past are already spent and forgotten. The failure is now. So for the people who got the bonuses in the past it may be worth it (that's probably why they did it), but for the company as an ongoing concern it certainly isn't. It's like eating a lot of unhealthy foods and later getting sick - maybe some people consider it worth it, but most people kinda regret it when they get sick.


The thing is, a company isn't a person. In fact, LTDs were effectively invented in order to dissociate company lifecycles from human ones.

So, from a purely rational perspective, if the company makes $100m profit over 10 years then gets "sick", well, job done - you just start another one and carry on. Money doesn't care for future consequences; if anything, inflation puts pressure on disposing of profits quickly while postponing losses (and risk), even if doing so will eventually kill the company.

Extreme "financialization" of our ways of production has given us great rates of efficiency and innovation, at the expense of long-term stability.


> So, from a purely rational perspective, if the company makes $100m profit over 10 years then gets "sick", well, job done - you just start another one and carry on. Money doesn't care for future consequences; if anything, inflation puts pressure on disposing of profits quickly while postponing losses (and risk), even if doing so will eventually kill the company.

This is a purely financial take, not necessarily a purely rational one. I say that because it's pretty easy to dismiss all the human aspect of a company dying, all the suffering it creates as something to not be taken "rationally" but what it actually means is to push the human-factor into the statistics field and be done with it.

I don't agree with this worldview.


A company around for 100 years that returns 2% per year is worse than one that returns 100% per year for 5 years and then folds.

Companies shouldn’t exist for the sake of longevity.


Operating a business is a lot like flying an airline in one respect: It's not your average hight above the zero point that matters so much as never, ever going below it.

Failure to maintain altitude above ground level and failure to maintain solvency are in many ways equivalent.

Both domains involve taking risks, but with severe consequences when either risks are miscalculated or ground truths change. Financial bets can be hedged in ways flight profiles often cannot be, and Southwest are credited for doing this (with fuel purchase futures notably), but there's a sense in which businesses are arbitraging latent risks for present profits in ways which can prove catastrophic. (Venture start-ups are particularly prone to this IMO.)

Southwest's single-airframe fleet affords efficiencies, but also risks should faults arise with that airframe or subsystems of it (as with the 737 MAX scenario).


Wouldn't the relevant analogy be operating income?

It's usually not a problem for a business to incur a short term operating loss.


"Solvency", writ large, is ability to service debts.

It's not quite as simple as cash-on-hand, turnover, or profitability. Start-ups without revenues or net profits may be solvent if investment capital is available, premised on future profitability or a viable exit strategy. But it's fairly strongly related.


For a plane, solvency would be airworthiness, not altitude.


That's not the way I'm picturing it.

Airworthiness is more an overall assessment of risk.

A substantially compromised aircraft, with expert piloting and favourable weather, can still land successfully.

A fully-airworthy aircraft experiencing CFIT won't. Nor will one flown into unanticipated adverse conditions such as violent weather, volcanic ash, or wind shear.

And of course, a sufficiently crippled craft cannot be landed successfully no matter what.

(An additional case is of a landing with partial survival of passengers and crew. We'll omit that.)

Airworthiness increases he probability of a successful flight. It's neither strictly necessary, nor sufficient. It is part of the overall risk assessment, effectively a creditworthiness rating.

An airworthiness certificate is a specific certification of such airworthiness.


> This is only “a failure” if the loss from this is worse than all of the money they have saved over the years by running so lean.

Don't forget all of the future losses by losing the trust of both the customers and the employees.

> it’s that prepping for them costs more than the loss from not being able to absorb them

This assumes that they can absorb these losses.


  > Don't forget all of the future losses by losing the trust of both the customers and the employees.
Who's going to remember this? Even a large percentage of the stranded passengers are likely to fly Southwest again to save $36 on a flight.

  > This assumes that they can absorb these losses.
If they couldn't, then they could very very likely receive a bailout or other assistance. It is the existence of these safetynets that allows these businesses to operate so lean. The cynical might say that bailouts encourage the practice.


> Who's going to remember this? Even a large percentage of the stranded passengers are likely to fly Southwest again to save $36 on a flight.

You can see how this is a problem, right? This essentially means the market is not working as it should - instead of improving quality of service, it makes people absorb the bad experience, ad infinitum. The market is not able to deliver feedback to the companies, who instead rely on some degree of "capacity for suck" in their customers, and the fact that there's a new sucker born every minute - by the time they burn out a cohort of their clients, a new population of naive, hopeful people shows up to replace them.


> This essentially means the market is not working as it should

Actually the market works just fine: it transfers price pressures efficiently across all participants - including human beings. It's society that doesn't work anymore, because it has now lost any meaning of 'value' beyond monetary terms for most of the population. Most consumers now cannot choose not to minimize expenditure: either because they cannot afford it, or because they simply don't know how to look at experiences through a lens different from "what is the price".


Well, some people are OK with getting shitty service once in a while in exchange for drastically lower prices. The thing is, I don't see Southwest prices being drastically lower - I had been checking it for a while when travelling and at least where I go, their price level is no different from their competition - they occasionally have a good deal, but so do the competitors, and their regular prices aren't that different otherwise in my experience. Maybe statistically it's not true but anecdotally for me I'm not sure there's even minimizing expenditure that much...


>Most consumers now cannot choose not to minimize expenditure:

Leaving aside flying private--which is a whole different magnitude of cost--consumers can absolutely choose to pay more to insulate themselves from much of the unpleasantness of flying. Doesn't help much when flights are canceled or delayed of course but you have Pre-Check, airline lounges, business class seating, etc. which do generally improve the experience.

But, yes, society in the aggregate does not value the better experience at what it would cost to deliver--certainly not to the point of effectively excluding a significant segment of the population from routine flying but, in the process, making it a more pleasant experience for others.


“I don’t like what people prefer” is not “the market has failed”.

If people want cheap flights, they will keep flying southwest and deal with the occasional problems that come with dancing on a razors edge.


  > You can see how this is a problem, right?
Without a doubt. I am among the cynical.


You're underestimating the price sensitivity of many consumers.

It's the market working exactly as intended.


I don't think people will be as forgiving of this as GP thinks. I will certainly not book with them for my next N flights unless I hear that they have massively changed their tune.


Optimisation culture. Cut x cost by y%? Promotion! Everything collapses a few years later because there’s no buffers for anything? Who cares, those managers are already at their next job so it’s someone else’s fault!


That's also "I want it cheap and I don't want to consider complexity" culture; if an airline were consistently more expensive but claimed "hey you know that once a decade issue that happened to Southwest last year? it will never happen to us", maybe some businesses with particularly critical flights would go for it, but not only would most people go for the cheaper flight given the option... I bet almost no one would be able to tell you what the benefit of the more expensive airline was as they probably just don't care enough to learn or research (which is different from then deciding the difference didn't matter).


this is the price we pay for rewarding "efficiencies" up and down the entire chain, leaving no slack whatsoever. with large companies or operations these efficiencies can be over really minor things as well because it means bonus for someone. the root cause of all of this is "short-termism". everyone is only worried about the next quarter, not the next 5 let alone 20-40 years.


The US commercial air transport industry is an absolute marvel. Millions of people moved thousands of miles every single day, mostly at extremely affordable fares. And tons of cargo moved as well. All with an excellent safety record, especially in the past decade.

If "the price we pay" is a day or two of one airline (not any of the others) grounding most of its fleet, most likely due to a controversial internal HR policy, it's an exceptionally low price.


You make it sound as if it was impossible to have such a marvelous industry without this deep degree of over-optimization. I disagree. The way I see it, with a bit more buffering here and there, it would be mostly the same - perhaps with less bullshit flights that could've been just as well taken by trains (which would be in a better condition, having more business flowing through them), and less middle-men everywhere sucking up the savings from all that optimization.

This is the thing with markets: whatever optimization you make, you won't reap the fruits of it for long. Someone - either competitors or adjacent third parties - will show up to suck out your margin, leaving you mostly as you were, but locking that optimization in as a permanent fixture in the industry. This means that when companies over-optimize, shoot past the optimum "value to profits" ratio and aim for higher margins still, they make the industry permanently (well, until next collapse) worse for everyone.


>The US commercial air transport industry is an absolute marvel. Millions of people moved thousands of miles every single day, mostly at extremely affordable fares. And tons of cargo moved as well

As opposed to...? tons of cargo and millions of people are being moved around everywhere, welcome to the modern world. The US commercial flight industry sucks in the grand scheme of things mostly due to a lack of competition. Flying in the US is expensive compared to Europe/Asia.


I don't claim to know all the price/cost dynamics, but it's mostly the regional low-cost carriers (which people seem to generally hate except for their cheapness) that are cheap in Europe and Asia. Otherwise airfares are pretty similar to the US.


if you remove all checks and balances, all forms of redundancy and run the system at 99% capacity.. even a simple unforeseen event can disrupt everything and grind it to halt.

Just imagine that most businesses are equivalent to running your whole stack on a single, self hosted at home, RPI. Including the git repository, and no backups.


According to this substack[1], it was a pilot walkout/"sickout" due to vaccine mandates. It's actually happening in more companies/industries than widely reported. I imagine it's also picked up steam since last weeks revelation from leaked internal Pfizer emails[2] that they used cells from aborted fetuses while testing the RDNA vaccine (testing - it's not in the vaccine), but have publicly stated otherwise. It was also pretty clear that they did not want the public to know from the text. And a lot of "religious exemptions" are being turned down. This would be a bit like taking a staunch vegan and forcing them to eat something (via threatening career) that was tested on animals while they said otherwise.

> The pilot emailed following the first Southwest post today (and provided his SWA ID to prove his identity). He asked that I paraphrase the email.

> Essentially, the union cannot organize or even acknowledge the sickout, because doing so would make it an illegal job action. Years ago, Southwest and its pilots had a rough negotiation, and the union would not even let the pilots internally discuss the possibility of working-to-rule (which would have slowed Southwest to a crawl).

> But at the moment the pilots don’t even have to talk to each other about what they’re doing. The anger internally - not just among pilots but other Southwest workers - is enormous. The tough prior negotiations notwithstanding, Southwest has a history of decent labor relations, and workers believe the company should stand up for them against the mandate. Telling pilots in particular to comply or face termination has backfired.

[1] https://alexberenson.substack.com/p/urgent-a-southwest-airli...

[2] https://www.youtube.com/watch?v=FUXGB5FzhPc


> And a lot of "religious exemptions" are being turned down. This would be a bit like taking a staunch vegan and forcing them to eat something (via threatening career) that was tested on animals while they said otherwise.

Considering all of the other household items that are also commonly tested using fetal cell lines (including acetaminophen, aspirin, ibuprofen, albuterol, pseudoephidrine), the analogy doesn't apply.


Heh, incidentally, there was a hospital that (reportedly) said, "okay sure, if you're swearing off all those other things you can claim a vaccine exemption":

https://arstechnica.com/science/2021/09/hospital-staff-must-...


Many (most?) of those medicines are quite old and were developed before widespread legalization of abortion, let alone use of fetal stem cells in drug development.


Nevertheless, human cell culture testing has become a fundamental part of the safe production of many common drugs. FDA regulation and approval extends not just to the chemistry of a drug but also to how it is manufactured, to ensure that the delivered product is safe.


Old medicines are still evaluated for ongoing safety profiles, including interactions with new classes of drugs that may come on the market. Users of these medicines benefit from this.

As an example, here's a 2018 study on Tylenol using the HEK 293 line: https://pubmed.ncbi.nlm.nih.gov/29273526/


Just to clarify this YouTube link: HEK293 cells are used in TONS of research, yes they are derived from fetal cell lines in the 70s. When I say tons, I mean if you say "HEK cells" to someone who does any cell culture they know what you're talking about. It is completely noncontroversial, and cancer/bioenergetic research utilizes them.

I don't appreciate this YouTube channel doing what they are doing, it is pouring fuel on a giant nothingburger.

https://en.wikipedia.org/wiki/HEK_293_cells


> I don't appreciate this YouTube channel doing what they are doing, it is pouring fuel on a giant nothingburger.

That's their MO.

https://en.wikipedia.org/wiki/Project_Veritas


Wikipedia says about using wikipedia:

> Wikipedia can be a great tool for learning and researching information. However, as with all reference works, Wikipedia is not considered to be a reliable source as not everything in Wikipedia is accurate, comprehensive, or unbiased.

So, there's also that to consider.

https://en.wikipedia.org/wiki/Wikipedia:Researching_with_Wik...


That's why you can (and should!) scroll to the bottom of an article and consult the references, if you're unsure.

https://en.wikipedia.org/wiki/Project_Veritas#References


I have worked with HEK cells and linked to Wikipedia as it is generalized enough for public consumption.

Here's a Nature Communications paper on HEK293 containing a brief history with an impact factor ~13. https://www.nature.com/articles/ncomms5767

Above 10 is considered of significant worth.

If that's not good enough for you, stick to whatever it is you're good at, and stop citing trash.


> I imagine it's also picked up steam since last weeks revelation from leaked internal Pfizer emails[2] that they used cells from aborted fetuses while testing the RDNA vaccine (testing - it's not in the vaccine), but have publicly stated otherwise.

The fact that fetal cells are used in testing has been public for a long time.

This article dates back to last December, for example: https://www.nebraskamed.com/COVID/you-asked-we-answered-do-t... (and here's me citing it two months ago, in case you want to claim a ninja-edit "last week": https://www.reddit.com/r/bestoflegaladvice/comments/p6f6yl/l...)

The “it’s the vaccine mandates!” argument has to figure out a way to explain why all the other airlines weren’t similarly affected when they instituted theirs.

Alex Berenson is… not a reputable source. https://www.theatlantic.com/ideas/archive/2021/04/pandemics-...



It is a good thing that employers are rejecting made-up religious objections that have no basis in consistent and longstanding practice. If they don't, it will come back to bite them over and over and result in endless litigation.


It's telling that this is downvoted, even though it presents actual evidence from an actual SWA employee vs the random speculation found elsewhere in the thread. The cause isn't leanness or MBAs, its pilots protesting against vaccine mandates, by the testimony of an actual pilot who works there.


That is because it goes agaist the narrative that the only people that oppose mandates are backwater rednecks that have no education.

It can not be that high skilled professionals oppose having their body autonomy revoked... it can not be that "my body my choice" should extend to more medical choices than 1...

no no. this can not be allowed


If fetuses were infectious - if you could stand by a pregnant person at the bus stop or grocery store or school, and suddenly find yourself pregnant by breathing the same air - "my body, my choice" would not be the reproductive rights slogan.


That is both a weak and dangerous argument if you place any value at all on individual freedom. As a vaccinated person I have a MUCH MUCH greater risk of dying in a car accident on the way to the grocery store than I do of contracting a deadly case of COVID.

Before the vaccine was widely available you may have had a case but once you become vaccinated your risk level drops to well below other risks we already accept as part of having a free society.


Our society has always balanced individual freedoms versus the impacts exercising them have on others.

I cannot have murder, child porn, or heroin use be a part of my religious ceremonies. I cannot have libel be a part of my free speech and expression. I cannot be Typhoid Mary and spread disease around. I cannot open a restaurant that skips hand washing. I cannot go to public school unvaccinated for measles and a number of other diseases in most states. I cannot drive drunk, despite research showing doing so actually improves my chances of surviving an accident (https://www.scientificamerican.com/podcast/episode/odds-favo...).

Immunocompromised people exist. Tens of millions of children aren't yet eligible for the vaccines. I'm inclined to consider their individual freedoms not to be needlessly infected by a pandemic disease as important, too.


That is a very weak rebuttal and does nothing to address that fact that risk from COVID once you are vaccinated falls below the other accepted risks of society.

Care to address that or do you just want to keep building strawmen?


> once you are vaccinated

Again, this is fairly key. A large portion of the country is not yet eligible for the vaccines at this time.

> That is a very weak rebuttal

That is a very weak rebuttal.


2 Points

1. Vaccinated people still spread covid, Vaccination primary effect makes a person asymptomatic, this has been proven.

2. "Large portion" is false, it is children under 12, who have a lower chance of serious illness than a vaccinated person. That said if you as a parent feel that risk to do high then you as a parent can take measures to ensure you children only come in contact with vaccinated person, this however does not mean you can impose that desire via government. To be clear I am fine with parents advocating business require vaccinations of their own business policy, I am not fine with government telling a Bar that is for adults they also must require vaccinations. Government mandates bad, private business choices good.


> Vaccinated people still spread covid

Vaccinated people still spread COVID, but they're less likely to. https://www.nbcnews.com/health/health-news/vaccinated-people...

"When infected with the delta variant, a given contact was 65 percent less likely to test positive if the person from whom the exposure occurred was fully vaccinated with two doses of the Pfizer vaccine. With AstraZeneca, a given contact was 36 percent less likely to test positive if the person from whom the exposure occurred was fully vaccinated."

> "Large portion" is false, it is children under 12

That's about 50 million Americans, a number I consider fairly large. https://www.statista.com/statistics/457786/number-of-childre...


That's clearly not true given that the number of cases in highly vaccinated countries is as high or higher than before.

Firstly, NBC? They're not exactly going to give you a balanced view, are they. Anyway. The article is about an academic study. Those are near worthless: even theoretical studies with 100% external validity frequently come out too late to be informative. The real world data is what matters here. Perhaps someone who was literally just jabbed spreads it less, but if the protection lasts three months it's irrelevant and misleading to make a temporally unbounded claim "vaccinated people are less likely to spread COVID".


There is a concerted effort to eliminate autonomy and individual agency


The root cause is because "anti price gouging" laws are being enforced.

Previously, if there was a shortage of say plane brake discs, the wholesaler would jack the price up 10x for the last 3 sets. That would lead to one of the 4 customers who wanted to buy them to say "nah, it's too expensive, we don't need it that badly".

The person who wouldn't get a set was probably the guy restocking the spare parts shelf, while the people who really really needed those parts right now so a plane can takeoff got them.

In todays world, it's illegal to jack the price, one customer buys all the cheap stock (one to use, 2 as spares cos they heard about a shortage), and now 2 planes can't take off.

The same happens for thousands of other products all across the world. The end result is the people who really need goods can't get them, while others sit on piles of stock 'lucky we bought some just before they ran out!'. Endgame: The economy grinds to a halt over tiny shortages everywhere.

The proper solution is to allow and encourage price gouging again, and have a PR campaign to explain to the public how changing this law really is in their interests, even if it appears on the surface that paying $100 for a flashlight in an emergency can't be good for anyone.


Careful: you're letting ideology get in the way of the facts.

Price gouging laws are exclusively a local and state matter, and only apply at the retail level. Although there have been proposals for price-gouging laws at the federal level, none have been enacted. State laws don't generally apply to B2B interactions.


I'm not sure it matters...

Any goods wholesaler I know of goes straight from "in stock, the price is X" to "out of stock, even if you offer a million $ you can't have any". Nobody auto-increases prices as stock runs low.

Perhaps it isn't illegal to do so, but nobody does it, probably because businesses believe it's illegal to do so.


What an ignorant comment. Commercial suppliers are fully aware that there are no price gouging laws. They choose not to boost prices when stock runs low because they don't want to burn relationships with long standing customers.

Also as a practical matter the software they're running simply doesn't have the feature to dynamically change prices based on inventory and lead time. So someone would have to manually update all the parts prices, then lower them again later. Not worth the hassle.


Any major business is going to have an army of lawyers to look into any potential business practice. It would be trivial for them to shoot off an email to legal asking, "can we jack up the prices of our parts based on inventory levels?"

The answer might be affirmative, but that doesn't mean that doing so is a good business move. If you were in charge of sourcing at a company, and a supplier pulled that shit on you, you'd be finding a replacement supplier rightquick. If a supply will gouge you for this reason, you can be sure they will be looking for other reasons in the future.

TL;DR: price gouging, even if legal, is bad optics.


Think about how difficult systems engineering is. Then realize that everything is systems engineering. But, very few people making decisions are systems engineers.

Ad-hoc heuristic decision making + political in-fighting can get you off the ground, but it can't keep you reliably airborne.


The global economy is just one enormous JIT system now. Great for efficiency not so good for stability.


Over the last decades, capitalism was not regulated very much and, as a result, companies cut costs - and one of the easiest ways to do so is to cut resiliency measures like having a standby plane and crew at every major airport to cover for delays, technical problems or staff calling in sick.

Nowadays, no one runs with any sort of buffer if that isn't explicitly demanded by government or other regulations... and when the shit hits the proverbial fan, it hits hard as a result.


> Is it just covid or something bigger?

Vaccine mandates. All the staff have walked off the job rather than be jabbed.


Maybe there is something between the lines, but it really does not say much other than the obvious "our operations are worse than other carriers".


Im skeptical of a statement from the Union in this case. They may have ulterior motives to releasing a statement like this.


Maybe a symptom of trading efficiency for resiliency?


In my experience, efficiency usually results in an increased level of resilience. You can easily sacrifice both, jeopardizing profits. Every time I saw that happen, it turned out some department-specific KPI (it doesn't matter which department, finance, production, sales, logistics,..) looked really good while that happened. All other sucked, but nobody cared. IMHO, this over emphasis on one silo, at the expense of all the others, puts so much stress on those other functions that they only can crack if something external puts even more stress on them. I guess that is what Covid and all the resulting disruptions is doing. Some orgs crack earlier than others, every one does have its cracking point so. The question is if an organization can adapt before it reaches its breaking point.

Southwest it seems reached it before others.


I have never seen a KPI that is sophisticated enough to not get gamed and not create perverse incentives.


That's why large enterprises typically use something like a balanced scorecard instead of individual KPIs.

https://hbr.org/1992/01/the-balanced-scorecard-measures-that...


Single KPIs definitely not. Good system come close enough, more often then not I think the issue is the culture that prioritizes one KPI over all others. Or one department's priority.


What more should leadership (or investors) need to hear?


I'm saying it doesn't add much to the news.


It adds the lack of another reason, i.e. there is no mention of for instance a pilot shortage or vaccination restrictions.


They also explicitly deny that a sickout is occuring:

> There are false claims of job actions by Southwest Pilots currently gaining traction on social media and making their way into mainstream news. I can say with certainty that there are no work slowdowns or sickouts either related to the recent mandatory vaccine mandate or otherwise. Under the RLA, our Union is forbidden from taking job action to resolve labor disputes under these circumstances. SWAPA has not authorized, and will not condone, any job action.


I think that's because it's technically illegal to do a walkout...

https://alexberenson.substack.com/p/urgent-a-southwest-airli...

In reality, a lot of pilots can just message each other on the side and say "f-it". Idk how many it takes to take down the system, but I suspect even 20% out sick could cause a cascading failure.


20%? That would mean they have 20% extra pilots on standby ready to take over for the sick. I think it is far lower than that, more like 5% or less. I suspect it might be closer to 2%, that there are no real backups. I bet that when someone is stick someone else is called in on their weekend. That would be the labor action: pilots refusing to work overtime/weekends when called to cover for someone.


My dad is a commercial pilot for a different carrier. The tl;dr is there are typically a subset of pilots on-call at any given time. Pilots who aren't on-call won't be asked to give up their weekends to cover flights.

Pilots either "sit reserve" or "hold a line" based on seniority/airframe and to a lesser degree rank (ie a pilot may choose to sit reserve as a captain when they could be a line holder as an FO). Line holders have a set schedule that they bid on (again based on seniority). If someone calls in sick, misses a flight, or if a flight goes unscheduled, scheduling contacts a pilot that is sitting reserve who then fills in the missing position.

When sitting reserve they get paid to hang out near the airport. Pilots are typically based out of some airport, reserve pilots need to be able to get to their airport within a set amount of time after being called (iirc 2 hours).

It's not that there aren't real reserve pilots, it's that there are exactly the number of backups that there needs to be under normal circumstances. Airlines don't like paying people to sit around and they've got scheduling down to a science. I think I was in high school the last time my dad sat reserve. It felt like he had to fly almost every time (but not every time!) he was on reserve.


>> there are exactly the number of backups that there needs to be under normal circumstances.

So, as I said, no redundancy for abnormal circumstances. If they are sitting on a reserve roster, but nearly always fly, then those aren't really a reserve pool. One or two extra people calling in sick and there won't be backups available.


Oh I agree, doesn't require a large number -- maybe 5% of pilots. To shut down all flights is likely still slightly higher.

What I suspect is actually happening is much larger.


alexberenson may have his own biases. But the situation is strange. From the opposite corner of the country, the ferry system in Puget Sound is already cancelling tens of crossing a day because of sick calls leading to "lack of Coast Guard documented crew". A vaccine mandate is looming for Oct 18 with 250 ferry employees still unvaccinated. "It wouldn't take much to cripple the system," said retired ferry Capt. Ken Burtness.

> Employee exodus could 'cripple' Washington ferry system as dozens of sailings canceled again Friday

> 'The new norm': Washington ferry workers call out sick in protest of COVID-19 vaccine mandate

https://www.king5.com/article/news/health/coronavirus/washin...


Doesn’t that just mean the union itself isn’t organizing a sickout?


Or at least not publicly admiting to it - which if the statement is to believed would be illegal, which sounds like a good motive to deny any knowledge.


>Under the RLA, our Union is forbidden from taking job action to resolve labor disputes under these circumstances

They couldn't admit it if that's what they're doing. They'd have to deny it either way. Even an "unofficial" unorganized sick out.

On the other hand- if a pilot knew he was getting fired in two weeks for not getting vaccinated, and he happened to have two weeks sick pay, well then the company policy did all the "organizing" that needed to be done.


Even if an employee is fired for cause the employer is required to pay out accrued vacation time.


Where I am, they pay out vacation time, but not sick time (unless it's a combined pool, in which case vacation takes precedence.) I don't know how common that situation is, but it certainly incentivizes getting "sick" right before you leave a job.


As a result, there are many companies (at least in the US) which will refuse to honor sick time taken through your final day without legal pressure - they'll take it out of your vacation time, and if not there your salary.


Heh, many are moving to a “it’s all one bucket” policy. Oh and it’s all one “unlimited” bucket which means they don’t have to pay out anything at all for vacation or sick time.


That depends on what state you are in. Not every state requires it. But I’m guessing the pilots union agreement includes it.


Indeed it does depend on the state. Surprisingly inconsistent in myriad ways across the US. https://www.paycor.com/resource-center/articles/pto-payout-l...


Being required to do a thing and actually doing a thing are two completely different things. Having the money to turn around and sue somebody for not disbursing your accrued vacation time is a third thing altogether.


No idea why parent is downvoted. The quote posted is on the official statement on union website linked.


That doesn’t match what I want to read, but I’m fine with that

Since there is still skepticism from the other commenters too, if the union was lying could someone explain their motives?

Like what benefit does would the union have to provide confidence to the nature of the disruption? Or to cover for their pilots/employees?

Otherwise their statement being the truth is cool too


Would it be in their interest to state this even if it wasn’t true?


Yes, in fact they would be required to make this statement.

>...our Union is forbidden from taking job action to resolve labor disputes under these circumstances...


It would be worth checking that a third party can confirm this, given that other comments are pointing out that the given excuses don't add up.




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