The year 2022 was rough for travelers. According to Department of Transportation data<\/a>, the nation\u2019s 17 largest carriers canceled more than three percent of their flights in the first half of the year. That\u2019s nearly twice as many canceled flights compared to 2021.<\/p>\n However, those statistics don\u2019t include the very end of 2022, when Southwest Airlines experienced a catastrophic holiday meltdown. While a nationwide disruptive winter storm triggered Southwest\u2019s problems and staffing shortages didn\u2019t help, those factors were not the only reason behind the airline\u2019s cancellation of 16,000 flights<\/a> that left hundreds of thousands<\/a> stranded in airports.<\/p>\n Southwest now estimates<\/a> the cost of the cancellations comes to at least $725 million and could rise to $825 million, more than half of which is from lost ticket revenue alone. Additional costs also include Department of Transportation fines to costs of upgrading computers and software. The longer-term cost to the company\u2019s brand is harder to estimate, but also significant, as future customers think twice about choosing the airline.<\/p>\n While it\u2019s not realistic to expect no cancellations, especially during major weather events, Southwest\u2019s experience shows the necessity of implementing an ongoing modernization program that aligns with the voice of the customer (VOC). Failure to do so can be disastrous.<\/p>\n In 2017, Southwest migrated to a new passenger service system, Amadeus Alt\u00e9a, one of the top two industry-standard platforms. But they forgot one fundamental truth about technology \u2013 it\u2019s like a garden. It needs constant tending to ensure it is healthy and able to thrive. Their predicament wasn\u2019t a matter of if failure will happen, but when.<\/p>\n It\u2019s clear the company has a problem \u2013 a lack of an ongoing modernization program. In a letter<\/a>, Mike Santoro, a captain and vice president of the Southwest Airlines Pilots Association (SWAPA), stated that there were \u201cclear and constant signals that . . . aspects of our operation . . . were in desperate need of significant investment and upgrade.\u201d Santoro noted further that SWAPA had been calling for improvements \u201cfor nearly a decade.\u201d<\/p>\n Even Southwest CEO Bob Jordan acknowledged the issues in an email to employees. According to CNN, Jordan said, “Part of what we’re suffering is a lack of tools. We’ve talked an awful lot about modernizing the operation, and the need to do that.”<\/p>\n However, it\u2019s important to note that neither Southwest nor the airline industry itself are alone. Most companies don\u2019t have application modernization<\/a> and maintenance programs.<\/strong> They don\u2019t set aside a budget for simple housekeeping. They assume technology is in a steady state and will run as long as there isn\u2019t a disturbance, which is a reactive strategy and induces a lot of unnecessary risk in today\u2019s modern digital world.<\/p>\n Southwest\u2019s crisis in December 2022 is only the most recent case study.<\/p>\n Like other lower-cost carriers, Southwest operates on a point-to-point model<\/a> instead of a hub strategy. Point-to-point is a regional airline model where flights go directly from their departure point to their destination instead of passing through a centralized hub. As a result, tracking flights in a point-to-point system puts more pressure on resource planning because the airline has more flights and more connections.<\/p>\n Normally, a system like Amadeus Alt\u00e9a can handle the pressure, especially if they are up-to-date. But during December\u2019s storm, the pressure became too great, making it harder to isolate and fix problems \u2014 and to meet their brand promise.<\/strong><\/p>\n Again, Southwest is not alone in its struggles to keep systems up-to-date and ready for any contingency. I have said many times that CIO stands for Chief Interim Officer and CTO stands for Chief Temporary Officer. That\u2019s because many people in those positions struggle to implement modern systems and often lack robust modernization programs. Simply buying or implementing the latest technology only provides benefits for so long before needing maintenance. This is where most organizations stop \u2014 and they shouldn\u2019t.<\/p>\n The solution is not to abandon the point-to-point system. It serves Southwest well in its promise to keep fares low. Instead, the solution is to keep systems upgraded to meet the additional demands of a point-to-point model, so Southwest and other airlines can fulfill their promises to customers.<\/p>\n Southwest values empathy and transparency. After all, it is an employee-owned airline that even has hearts on the underbelly of its jets. Unfortunately, failure to modernize puts the company\u2019s values at risk.<\/p>\n Modern companies demonstrate empathy and transparency when they are unwilling to sacrifice competence for profitability. When passengers hear about $14.7 billion in liquidity and large dividend payouts as they are stuck in a strange airport over the holidays, they rightly question what\u2019s most important to the organization. Does \u201clow fare\u201d now mean \u201cat my expense?\u201d Am I important? Do I matter?<\/p>\nHow Did It Get Here?<\/h2>\n
What Should It Do?<\/h2>\n
How Does It Include the Customer?<\/h2>\n