Southwest’s Holiday Meltdown And The Myth That It’s A Point-To-Point Airline

In the media coverage of Southwest Airline’s holiday disaster, there have been all sorts of prognostications regarding the reasons for the meltdown which stranded and delayed millions of consumers, and what the airline must do to avoid a recurrence.

One is the suggestion that Southwest’s point-to-point route system — i.e., that it carries more passengers who don’t need to make an intermediate connection — was a contributor to the complexity of the operational collapse. But the rationale given that this was a major factor in the meltdown still isn’t particularly strong.

That’s because Southwest isn’t really a point-to-point carrier. Nope. Southwest actually depends on connecting (“flow”) traffic as a major part of its revenue generation.

Let’s look at Southwest’s traffic mix – passengers traveling with a connection compared to those on a direct flight – at six of Southwest’s largest operations for the 12 months ended in the third quarter of 2022:

At these airports, the passengers simply connecting from one Southwest flight to another are a significant and very critical component of the Southwest revenue passenger mix.

Underscoring this is the column on the right. It indicates the percentage of seats that would have been filled at each airport without the connect traffic. In short, Southwest is operating these airports as connect hubs.

Southwest may or may not actually schedule its flights to optimize connections as American, Delta and United do, in specific arrival and departure time-banks. But nevertheless Southwest is in business to aggregate traffic across their system, i.e., connect passengers at specific intermediate airports.

In the real world, that’s called a hub operation.

Actually, Delta Airlines Is More Point-to-Point Than Southwest. Here’s where the facts get in the way of a lot of accepted thinking. Take a look at how Southwest ranks v other airlines in regard to percentage of passengers taking a connecting itinerary as opposed to a single point-to-point routing.

The data are clear. The Southwest system is essentially as connect-focused as are American, Delta and United, and if international traffic flows were culled out, it’s likely all four are neck-and-neck in regard to the percentages of connecting passengers.

Not to be missed is that Delta actually has a larger percentage of point-to-point traffic than does Southwest.

To be clear, however, there is a difference – generally – in how Southwest schedules its flights. While American and Delta and United tend to bounce their aircraft into and between their connecting hub airports, Southwest moves flights in a linear flow, often hitting two or more smaller intermediate airports between their large de facto connecting hub operations.

That approach does indeed make Southwest appear to be more of a point-to-point airline system, but the fact remains that the system does feed its connecting operations at these large airports.

Post-Meltdown Shifts? There is a lot of conjecture about how Southwest may change operations in the aftermath of the holiday fiasco.

Probably not much, if at all.

It needs to be kept in mind that the cause was not their route system but a crew scheduling program that could not keep up with the massive operational issues caused by a 100-year weather event flummoxing most of the nation.

That was the problem. That is the solution. Implementing IT systems that are sufficiently robust to accommodate the size and growth at Southwest is likely job #1 at the Dallas headquarters. From all indications, this was in progress before the event, and will naturally accelerate.

At this juncture, the projection at Boyd Group International is that there won’t be any major reductions in flying or in destinations served by Southwest.

But you can take a Southwest flight to ‘Vegas and make book that the airline’s internal systems will be massively different six months from now.