Business Wars: Can Southwest Airlines Survive? | Bumpy Skies Ahead | Episode 3 | August 21, 2025

Podcast: Business Wars
Host: David Brown
Guests: Joe Gwinto (business journalist and longtime Southwest Airlines reporter), Benet Wilson (Bankrate reporter, “The Aviation Queen”)

Overview

In this episode, host David Brown investigates the turbulence Southwest Airlines is currently experiencing. Once beloved for its customer-friendly policies and quirky culture, the airline is facing backlash after major changes—shifting to assigned seating and charging for checked bags, a major pivot from its traditions. Brown is joined by journalist Joe Gwinto, who brings decades of insight and firsthand anecdotes, and later by the renowned aviation journalist "Aviation Queen" Benet Wilson, who sheds light on flight pricing, airline culture, and travel strategy.

Key Discussion Points & Insights

Southwest’s Cultural DNA and Its Legendary Leader

[04:23–11:45]: Conversation with Joe Gwinto

• Herb Kelleher’s Legacy

  • Kelleher, founder and long-time CEO, built Southwest's unique culture—“employees first, customers second.”

    “He must have said probably every time I ever talked to him that employees came first at Southwest...if you take care of your employees, they’ll take care of your customers.”—Joe Gwinto [06:26]

  • Kelleher’s charisma and hands-on style made him a legend, blending strategic brilliance and people skills.

• Southwest’s Homegrown Image

  • The “Love Airline” branding (from Dallas Love Field) and Texas identity made customers feel a personal bond with the airline.

• Continuity at the Top

  • Current CEO Bob Jordan, a 30-year Southwest veteran, maintains some old traditions like personally helping flight crews and interacting with staff.
  • Anecdote: Gwinto encountered Jordan cleaning the plane, emulating the founder’s hands-on approach.

    “Apparently Bob decided he was going to clean up the whole plane for them.”—Joe Gwinto [09:47]

Major Policy Shifts and Public Backlash

[13:40–16:57]: Southwest’s Policy Changes

• Open Seating Ends, Bags No Longer Fly Free

  • Open seating ends in January 2026; assigned seating is being phased in.
  • Free checked bags now mostly gone, generating significant customer discontent.
  • Internal studies showed that while charging for bags could make $1.5B/year, it could also cost $1.8B/year from angry customers leaving.

    “That was something...it’s harder to make a case for the fact that customers wanted it.”—Joe Gwinto, on ending free bags [15:21]

• Reputation Risks

  • Social media comments overwhelmingly negative.

    “There is not a single positive comment in these comment section.”—David Brown [01:21]

  • Customers feel Southwest is becoming just another budget airline—and possibly a pricier version of Spirit or Frontier.

    “This is frontier, but expensive. This is spirit on steroids.”—TikTok commenter [14:47]

Industry Headwinds, System Failures, and Internal Challenges

[20:15–27:08]: Legacy Systems and Labor Issues

• Operational Systems

  • Southwest clung to outdated scheduling systems, leading to massive holiday meltdowns in 2022 and 2021, which stranded millions.

    “We're just one big storm system away from the whole network falling over. And that is exactly what happened in Christmas of 2022.”—Joe Gwinto [22:21]

• Employee Relations

  • Longtime employee-centric culture eroding; contract disputes and lack of communication during crises hurt morale.
  • Despite profitable quarters, Southwest recently executed its first mass layoffs—about 1,100 jobs, 15% of the Dallas HQ staff.

    “I think 1100 people being cut was a shock to a lot of the employees...because they counted on Southwest to have that employee first mentality.”—Joe Gwinto [26:28]

• Activist Investor Pressure

  • Elliott Investment Management entered in 2024, demanding leadership and board changes to boost profits.
  • CEO Jordan survived, but with an overhauled board, signaling a new, more profit-driven era.

Is the Low-Cost Airline Model History?

[16:57–18:16]: Industry Context

• Competition Pressures

  • Major carriers (United, Delta, American) now mimic low-cost carriers’ fares but can offer premium products, squeezing standalones like Southwest.
  • United’s CEO: “The low cost model is dead.”

    "He said...the Spirit Airlines type model, the Frontiers—they're not going to be able to succeed anymore."—Joe Gwinto [17:12]

• Potential Decline of Southwest’s Unique Offer

  • Southwest may become indistinguishable from other carriers, losing the very culture that built its customer loyalty.

• Future Uncertain

  • Gwinto: The next two years could see Southwest transformed beyond recognition; only time will tell if passengers will stick around.

    "When you take a free perk away from customers who counted on you...there's a lot to make up for."—Joe Gwinto [28:12]

The Golden Age of Flying and Why Prices FEEL So High

[30:31–42:44]: Conversation with Benet Wilson (“Aviation Queen”)

• Why Benet Loves Southwest

  • Customer focus and fun, friendly culture cited as reasons for her loyalty.

    “They've always made me feel like they appreciate my business....The flight attendants are always very welcoming, and...just kind, warm, generous people.”—Benet Wilson [32:31]

• Airline Deregulation Changed the Market

  • Flying was once a luxury: her grandmother paid $483 for a ticket in 1972 (equivalent to $6–7k today).
  • Deregulation in 1978 opened up affordability and flexibility.

    “Back then, we couldn't have been on that plane if the military was not paying for us to be on that plane. Now, anybody...can go on a flight for a pretty reasonable price.”—Benet Wilson [33:58]

• Modern Ticket Pricing Realities

  • Today’s fares, despite feeling high, are historically much cheaper.
  • Pricing varies by route due to “yield management”—airlines adjust fares dynamically to maximize profit.

• Tactics for Beating High Prices

  • Use incognito, bargain sites like Secret Flying for mistake or discount fares.
  • Book quickly to capitalize on short-lived deals.

    “If you don't, I don't know if you heard...people were getting flights for like $200.”—Benet Wilson [38:08]

• Are The Airlines Watching You?

  • Yes. Airlines track searches and may send alerts to create urgency.

    “The airlines are watching you watch them.”—David Brown [38:12]

Credit Card Strategies for Travelers

[39:22–41:57]

• Benet’s Recommendations
  • Capital One Venture: Simple, 2 miles per dollar on everything.
  • Chase Sapphire Preferred: Higher points on travel and dining.
  • For those loyal to a specific airline, branded cards are handy, but general travel cards offer flexibility to transfer points.

Notable Quotes & Memorable Moments

• “I literally feel like I was cheated on. I've always had a good experience on Southwest, but this is probably going to make me change my mind with who I'm flying.” — Southwest customer [01:02]
• “Any other airline can go out and they get the same 737s that we fly, but they can't get our people.” — Herb Kelleher, as recalled by Joe Gwinto [06:26]
• “Southwest literally made that state feel smaller.” — Joe Gwinto on Southwest's impact on Texas [13:14]
• “If you take care of your employees, they'll take care of your customers. And if the customers are happy, that will make the shareholders happy.” — Joe Gwinto, quoting Kelleher’s philosophy [06:26]
• “The low cost model is dead. It's a crappy model.” — United CEO (quoted by Gwinto) [17:10]
• “Is this about meeting shareholder expectations? Is that what this reflects?” “Yeah, it's certainly what a lot of people are arguing out there.” — David Brown & Joe Gwinto discuss activist investor pressures [27:08]
• “Pack your patience and be kind...Yelling at a ticket agent, a gate agent, a flight attendant...does nothing. They're doing the very best that they can.” — Benet Wilson’s advice to travelers [42:13]

Key Timestamps

• 00:07–04:23: Introduction; Southwest’s current crisis and guest intro
• 04:23–11:45: Southwest’s history; Herb Kelleher and the airline’s unique culture
• 13:40–16:57: Explanation of Southwest’s recent policy changes and blowback
• 16:57–18:16: Debate over the viability of the low-cost carrier model in 2025
• 20:15–27:08: Technical failures, internal communication breakdowns, layoffs, and activist investor demands
• 30:31–33:58: Benet Wilson discusses the real cost of flying today and nostalgia for aviation’s “golden age”
• 37:10–39:22: How flight prices are calculated, and how to beat the algorithms
• 39:22–42:13: Best credit cards and practical tips for travelers
• 42:13–42:44: Final travel advice from Benet Wilson

Conclusion

This episode traces Southwest's journey from a beloved Texas upstart to an embattled airline at a crossroads. Through personal storytelling, candid expert analysis, and practical travel tips, listeners gain a nuanced portrait of an industry—and a company—struggling to hold on to its soul in a rapidly changing world. The fate of Southwest’s culture, business model, and customer loyalty is now up to “what the passengers think”—and, perhaps, whether airline travel itself can stay fun, affordable, and kind.