← We Fixed It, You're Welcome
We Fixed It, You're Welcome
Southwest’s LUV Lost
00:51:56
Southwest Airlines is financially strong. Record revenues. Stock price near multi-year highs. Yet longtime customers are walking away angry. In this episode, we unpack the growing tension between Wall Street performance and customer loyalty at Southwest Airlines. Host Aaron Wolpoff sits down with brand strategist Rene Huey-Lipton, founder of The Dame Collective and former strategy lead on Southwest during its golden years. The question at the center of the conversation: How can a brand be winning financially while simultaneously losing its best customers? From controversial assigned seating to unpopular baggage fees to the triggering “Boarding Royale” Super Bowl campaign, we analyze how strategic shifts have taken the most beloved airline identity in America off course for many consumers. What We Cover 1️⃣ The Core Problem: Financial Success vs Brand EquitySouthwest reported record revenue, yet load factors are decliningLoyal flyers publicly declaring they are leavingThe emo...
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welcome to We Fixed it, you're welcome, the show where we take over companies. You come along for the ride and we try to put them back better than we found them. Southwest stock price is doing great. It's trading near the best levels it's seen in years. The company's revenues are up. If you follow their financials, it's quite a turnaround. And yet it does not feel like Southwest is back on top of A recent Reddit thread with 200 upvotes said, After 20 plus years of loyalty, I won't fly Southwest Airlines. Another said that Southwest has thrown away all their goodwill in an attempt to be like every other carrier. Another recent flyer said, this ain't the old Southwest. Another said, this is not what I signed up for. Another said, I've flown Southwest exclusively for 10 years. This may be my farewell. Check all the socials if the sentiment is the same. People, especially longtime flyers, are steaming mad. This is not just the Internet being the Internet. People are pushing back on Southwest because it's not what it used to be. And loyal customers are asking for exactly what they want and the company just isn't doing it. But they could, and we're going to give them a nudge in the right direction. We're going to try and close the gap between financial success and customer satisfaction. Because when you're losing your most loyal customers with no end in sight, something's gotta change. It's a big one. And Melissa and Chino are not here today. So I've Got to fix this myself, huh? Well, fortunately, I'm not flying solo. I've got a co pilot here. Me is Reni Huey Lipton, founder and chief strategy officer of the Dame Collective. Among other things, Rini was senior vice president and director of strategy and insight at the agency gsdnm where she led strategy on Southwest during some of its strongest years. She's an award winning strategist and speaker who's helped build global brands, guided presidential campaigns, and has won gold Effies and Gold Lions along with other distinctions. Over the course of her life and career, she's grown from a self described cringing, inauthentic poser. Those are her words, not mine. Into a woman whose mix of humor, grit and sharp strategy now helps others find their own unapologetic voices. Rini, welcome to the show. It's so great to have you. Please tell us more about yourself.
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Oh, no, I'm glad to be here. Glad to be here. Yeah. So, you know, I've done strategy for 30 years in this business, so it, like any strategist with those amount of years under their belt, there's just a lot of experiences to draw from, which I love in terms of being able to sort of cross pollinate and do this and ask what if? And help my clients sort of really see the possibilities. Right. Of what could be. And as we all know in the advertising industry, once you hit a certain age, they all think, you know, women over 45, you know, are wearing, you know, Crocs with socks and elasticized pants and we're totally out of touch. So I pivoted. And now, you know, with the Dame Collective, I do. I've written a book called My Authentic Voice, which is, you know, how to sort of really stop performing for, for the system. How to stop shrinking yourself to fit in and be yourself and say the thing. And I've also, you know, translated that into the work I do for brands. How to, how do brands be sort of authentic and get out of the sea of sameness we see in so many things? Which is one of the things we're talking about with Southwest Airlines today.
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B
Yeah, our friends at the, at the airline. Yeah.
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A
I was talking with someone just recently that we had worked on a project together for Mountain Dew, and they were saying, rini, and I am blowing smoke up my own ass here. Sorry, we should have listened to you. Because at the time, which was a couple years ago, I had said they were looking for a new creative direction, new platform. And I said, you really should lean into this whole anarchy thing that's going on with young folks. And I'm just thinking, it would have been so good today, right. They could have, like, just lit it up. So I'm a big brand of. A big fan of brands being bold, but also authentic, and that would have fit, you know, Mountain Dew perfectly, for sure, that. The idea of anarchy. So.
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B
Absolutely. Well, it's great to have you here. I'm. I'm grounded in strategy myself. And, you know, you have those conversations with brands and you try to save them from themselves or point out something that's, you know, just on the surface that they haven't picked up on. And sometimes they say yes, and you're lucky, and sometimes they say no, and there's nothing you can do about it except talk about them on a podcast. Which is what we're going to do here.
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A
Exactly. Sometimes they look at you like you're crazy, but is okay, which is why
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B
I love this show, because we get to tell them what to do, and that's exactly what we're going to do today. And I know you've been. You know, you've had a few things to say about Southwest recently on LinkedIn and elsewhere, and so we're just going to get into it.
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A
Okay?
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B
All right. So let's. Let's ground our conversation a little bit. For those of you who are longtime listeners of our show, you'll know that we covered Southwest all the way back in season one, and we basically told them what to do back then, too. If you're going to modernize your business, which you do need to, because you have to make profit, you have to do it in a way that doesn't alienate your best customers. Because Southwest's advantage was never just price. It was trust. So you have to listen to your customers who trust you, be responsive to their feedback, and keep evolving while making sure that your loyalists stay on board. At the end of that episode, we congratulated ourselves on a job well done. We fixed it. You're welcome. But Southwest must have had some meetings without us, because they didn't stay fixed.
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A
Silly, Silly.
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B
I mean, right? Over the last six months, Southwest has moved from a big transformation narrative to a very public erasing of who they used to be. So now there's a signed seat. You pay more for the good ones. They didn't walk back. The baggage fees, all these changes at once are creating confusion and resentment. The problem isn't that Southwest is changing. Things have to change. The problem is that the fixes that customers keep begging for are obvious. Bring back Some of the things we like to value, and we'll come back, and Southwest keeps not doing them. And this all came to a head, right, with the super bowl campaign, which we've seen called Boarding Royale. Southwest pre released it the week before and then aired it during the big game. And the ad portrays open seating. Remember when you could choose your own seats? And we all kind of like that as they portrayed it as a jungle survival scramble. People, you know, fighting in each other's faces. And ends with the on screen text that was wild. And then followed by, don't, don't worry. Assigned seating is here. Oh, good. Thank you.
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A
Right. Because you've had 50 years, you know, and now you're gaslighting us all into believing that we were wrong.
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B
For critics rightfully called it tone deaf because it made fun of a feature a lot of customers, probably us included, actually liked. And sure, there were boarding groups and a little bit of hierarchy like A and B, but, you know, you could just choose an open seat. You walk onto the plane. It's easy and efficient. I'll take that one. And now you pay more for something you used to get for free. And consumers were supposed to applaud after that ad. Right. Thank you for saving us from ourselves. And it didn't feel like a self aware moment or even turning a griped about problem into a shared cultural moment of diffusion. Right. It felt like a joke at everyone's expense.
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A
Right. I mean, the thing about Southwest always, you know, the wellspring of love really came from this idea of we're all in this together. There's no hierarchy, really. People understood that you wanted to. You could pay, what, $15 more to be an A list. But. But that wasn't first class. It was all, you know, class. And it was really interesting. The Harvard Business School and the University of Toronto did this huge study and found that air rage is 3.84 more times likely to happen in planes where there is a first class. So class distinction creates this air rage. And we already know that, you know, the crew of Southwest is now facing. You know, they were. They're. They were hosts. They were warm and welcoming and funny. But now they're referees, right? You know, they try to be neutral. And they are on the front line of this anger and confusion. And even, you know, a lot of the social media was talking about how the crew seemed confused or angry or sad or upset. And I think that's really heartbreaking for the people who fly Southwest because the clapping and the jokes and, you know, I know that I've sort of rolled my eyes a couple times flying them when you know a joke. But we still all laugh together.
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B
True. Yeah. We had moments together because we were. Like you said, there's not this hierarchy of class system. There's not this, you're better than me. There's not walking through that first cabin where everyone's just sitting a little straighter and a little happier. You know, we're all, yeah, we're all flying Southwest. And it's also, it wasn't the ultra budget carrier. It's not Frontier, it's not Spirit. We've talked about Spirit elsewhere. It's for the people.
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A
It was an economy airline, and they won the customer satisfaction award for the last four years running from JD Power for the economy airline. And I wonder if that stuck in their craw, right, that, oh, yeah, we won it. But for the economy airline, who cares who you win it for? You are the ultimate in this one place, and that should be good enough.
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B
Well, here's the problem. We could just say, we could say, walk it back. Okay, you had something good going. But the twist, the twist to all this is financially, Southwest has been showing strong signals. So the changes they've been implementing from a pocketbook perspective, they've been working. Right. So they reported record revenue of 28.1 billion in 2025. But with that, the load factor, like the how packed the planes are, fell down to 77.2%, and it's down from 80% a couple years back, meaning the planes were, on average, less full. The drop off might seem, that percentage might seem small, but it's a downward trend year after year, and it doesn't seem to be reversing. So, I mean, that's really, really, that's the, that's the core tension is that Southwest can make more money at the moment temporarily by losing customers and charging more for the customers that stay with them.
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A
Exactly. It's classic Wall street optimization. You know, you're extracting more per customer, but how long will that last? Given the fact that with a lot of Southwest flights, you're having to stop, you know, there's very few nonstops, comparatively to the other airlines. Price wise, people are saying, oh, I can do an American or United or Delta for basically the same price.
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B
Yeah, if there's price parity. Yeah. Why wouldn't you?
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A
Exactly. And the people are hearing the Southwest flow, you know, fanatics narrating, they're leaving. It's not just a stranger saying, oh, I'm never going to fly it again. It's people, you know, who have defended Southwest Airlines for 20, 30 years and are now narrating their leaving in the sense of, well, you know, I just can't justify the cost. They're not this, they're not that. And that is the type of negative feedback that swells, you know, that really makes an impact over just some random, on a, on a lot, you know, on a social media.
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B
Right. Absolutely. It's not just a little bit of market fluctuation. Okay, A little bit here, a little bit there. These are the most loyal customers, not just quietly saying, okay, you're you, you separated from what I, what I wanted from you. It's, they're standing, they're standing up on a table and saying, southwest, you suck. You know, and everyone's got to listen to that. You know, everyone except Southwest seems to be listening. You know, when you see people with phones with cracked screens and you think, whoops, they weren't careful, well, that's something you can see on the outside. But what you can't see is how careful they're being with their online data. Because whenever someone goes online without ExpressVPN, it could mean trouble, like passwords and logins, all out in the open. If a screen cracks, you can fix it, but once your personal data's out there, it's out there. You can protect your own data with ExpressVPN and feel great about it. ExpressVPN creates a secure, encrypted tunnel between your device and the Internet. You can use it on your phone, tablet, and laptop at its lowest price ever, with plans starting at around 12 cents a day. It matters to me that your data is protected. I love fixing problems, and this one's easy to solve, and it's rated number one by top tech reviewers like CNET and the Verge. Secure your online data today by visiting expressvpn.com fixed that's expresvpn.com fixed to find out how you can get up to four extra months. Expressvpn.com fixed
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Call 1-800-GRAINGER visit grainger.com or just stop by Grainger for the ones who get it done. Yeah, I mean, Kyle Potter from Thrifty Traveler said, we're talking about one of the most beloved brands of all time, and they just completely nuked it over a course of the last 11 months. And they have, I mean, even the assigned seating, you can't switch seats. Right. Once you're assigned because they want to keep those. I don't know why the plane's taken off. You can't switch seats. Heaven forbid somebody moves two rows up and to the left and gets, you know, a $39 seat versus the $15 one or whatever it is.
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B
Right.
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A
And people are used to being able to sort of switch seats on an airplane. So even that, it feels like they've done more constrictive.
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B
They created another tension point that didn't used to be there.
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A
Exactly.
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B
And they're churning customers, their most loyal customers. They're hanging on to the base level of customers. And it's diminishing. In software, you'd call that a legacy model. Right?
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Right.
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We're just going to keep people trapped and charge them more until there's no company anymore.
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A
Exactly. And there's precedents for this, not only outside the airline industry with like, Harley and Livewire. Right. Harley didn't, you know, didn't want to sort of screw up their, you know, the Harley lore and legacy of so many years. And yes, it's slow to start, but they turned their electric bike into a different brand, into Livewire. Right. And their whole theme was don't mock the rumble to sell the silence, which is exactly what Southwest has done. They've mocked their legacy of we're all in this together, basically.
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B
Right. And they, with that super bowl commercial, they didn't do it at their own expense. They did it at our expense.
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No, exactly right. We were the punchline.
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B
We were the punchline.
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A
Yeah.
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Yeah.
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A
And that does not feel good. That doesn't feel good.
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B
No.
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A
Well, I'll say the whole time when we get to doing like what would we do?
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B
Yeah, yeah, yeah, that's, that'll, that'll come. But yeah, we, we have to earn our way there. But you know, that's what, that's what we're fixing together is should Southwest keep doing what's financially beneficial, profitable for the moment, is that built to last? I don't think it is. Or is that going to be downfall? And if Southwest is actually doing better now and it got itself out of crisis mode, whew, we're on the other side of it. Can't they start doing changes to say thank you for bearing with us and, and can they win customers back loyalists and everybody else? Can it be more likable? Let's, you know, Rita, you and me, let's bring back the friendly skies together.
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A
Yeah. You know, the, on social media, a lot of people's complaints are we'd responded to with we're looking into that. But short of rolling things back, what can they do? Right. And their employees were always their best advertisement. Whether it was the, the, the people doing the bags or the, you know, flight attendants, you know, employees who are happy and, and people can see them loving their job, create this sense of trust and again, we're all in this together. You become friends. If you're flying Southwest, like a lot of a route that you do every week, you know, you start to know these people and then you see this happen and these people that you've come to know are now, well, a, for the past, what, four, seven years, they haven't got raises, they've been installed discussions and as part of this, you know, flight attendants were asked to sort of move their bags to sort of the back of the plane. And they said, you know, no, that's just going to make it harder for us to get our bags and make it to the next flight. And you know, we're all about on time takeoffs and stuff. So it's not just affecting the passengers. There is an internal strife now that can take down a brand faster than anything. My dad flew for Pan American and when that went under, you know, all the, I could hear, you know, pilots, my dad's pilots when he talk about it, all the old flight attendants from Pan American and when I say old, they were, they were probably women, you know, in my age 60 and above have now gone to United. And there was a huge brouhaha then because United had these young, younger flight attendants that were good looking. And now all of a sudden, you know, you're getting, you know, 68 year old Betty. I'm sort of hyped who's been doing this for 40 years and who's grumpy as hell, right?
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B
No, but you're absolutely right that Southwest, one of their biggest assets is, and they would say it themselves, their people, right? And they create the environment. Whether it's dad jokes when you first, you know, when they're showing how do you, how you buckle the seatbelt. But they, they make us all settle down and be complacent in a good way. Right? We're, yeah, we all know what we're here to do. We're all gonna write, be, be in this together for the duration of the ride. And it's, it's a, you know, it's more than a transactional experience and it creates the right environment. If you walked into a, a restaurant with singing waiters, you know, you're probably going to be in a good mood before long and you're probably not going to use that moment to break up with your significant other, right? So you get with the program. So up until recently that had been the vibe and now it's, you know, what you're saying and what we're hearing elsewhere, that's just not. Yeah. So that's part escalates the tension when it's not just your customers or are
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A
telling you pundits or Wall street, it's your employees.
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B
It's your employees and you get a sense they're not on board with all the changes. You know, they don't, they don't want to charge you more for the bag that, you know, you with these, the bag fees that have been initiated.
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A
And they don't want to be referees, they don't want to have to be the hard asses, right. To say, oh, now you know, put your bag here, you have to sit here. That, that's not what they've been doing for 15, 10, 20, 30 years.
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B
Right now the company line is, I'm sorry, no.
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A
Yeah, right.
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B
So. And these bag changes don't all make sense because, you know, now people don't have been trained. It's really hard to untrain behavior, right? So people have been trained for 50 years, however many years that you can bring your, you know, bags fly free, and now they don't. So you. You try to squeeze everything you own onto into a compact carrying a size bag, and you're crushing all your clothes. And you made it happen. And then what happens? Right. You get to the airport and they say, this flight's full. We're gonna go ahead. Complimentary. You can. You can check that bag. We'll take care of it for you.
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A
And it extends boarding time. One line of discussion I saw on Reddit was all these people, you know, 15 minutes to board. Yeah. It was like, bam, bam, bam.
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B
Right.
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A
People would go in, sit down. Now it's like 55 minutes because people are trying to figure out where to put their bags. There's not enough place to put their bags. You know, people who board early or, I mean, board late and all this sort of stuff have to, you know, and. Or maybe a group have to find place in the back for their bags. It's. It's a bit of a mess.
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B
Yeah. Yeah. We're hearing about boarding times that are 45 minutes to 55 minutes or more.
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A
Yeah.
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B
Simply because of the changes that have been implemented.
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A
Yeah.
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B
So. And are there. What other friction points are you seeing?
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A
Well, we talked about the seat stuff in terms of not being able to really change your seat after you've been on. Also, the loyalty program was really sort of. I'm not exactly sure how it is, but we do know that the loyalty program, the A list customers are losing. The people who are paying for that A list customer are losing basically their perks.
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B
Right.
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A
That they had under the old system bins and all that sort of stuff. So it is not as. It's becoming hierarchical again like everything else. And so between paying for seats, because I think there's four or five different seat hierarchies. You know, there's four or five different seats paying for bags. You know, the different. The longer boarding system. You know, what is there? The staff having to become referees or not as loose. What is there left, quite frankly, of the. Of the Southwest Airlines. Ding. You're free to move about the country. I mean, that whole line. You're free to move about the country. Wasn't just about fees. It was also about we're an economy airline, and you're free to move about emotionally. Well, right, right. You know, we would. When we were working on Bags Fly Free, we would joke about why, you know, oh, I'm going on vacation after, and I have to pay to bring my clothes with Me, it's like. It's antithetical. Right. But Southwest, that was one of the reasons I was in the room with a bunch of other great GSD Andmers when. With Gary Kelly, when, you know, it was decided, okay, we're not going to charge for bags and gsdm, you better make this work. You know, and we did, and it wasn't that hard because, a, the employees, the bad guys, the, you know, the guys, you know, you know, they made it fun. We. You. We utilize the people that make Southwest fantastic and Bags Fly Free. Done.
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B
Right.
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A
And at the time, that was when the airlines were really starting to nickel and dime everyone.
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B
It's interesting because companies aren't really known for restraint. You know, if there's a way to make another buck off a customer, they'll do it. So they. But Southwest came. Came to you all and said, we're going to do Bags Fly Free. Make this happen.
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A
Yeah. Because they were getting a lot of pressure from Wall street, you know, for not getting those incremental money. And the challenge was, okay, don't charge for bags, but how are you going to make up that money? Right, right. And 900 million in extra revenue because we didn't charge for bags where people were flying us because they could save a couple hundred dollars, you know, that was an extra hotel room or a nice night out for dinner, wherever they were going. So, yeah, we did. You know, we. GST and M& Southwest Airlines proved that you could, you know, make money by not charging.
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B
Right. Which is, yeah, like a great example of corporate restraint and pivoting. You know, saying we're bucking the trend. Get that Everywhere. Everywhere else is going to charge you. We're not. Um, but it's really interesting that that came with kind of like a client mandate. You know, we're doing something I love, bold moves. We're doing something bold, and this is going to be a seismic shakeup in the industry. Now tell people about it. That's. That's a cool place to be.
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A
Yeah.
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B
Are there other, you know, in your. In your experiences with cellplus and elsewhere, too? But are. Were there situations like that where there were maybe moves that were not the right ones or different types of approaches to get to what we ended up seeing coming out of, we'll say Southwest.
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A
Well, it's a small thing, but not too long ago, Southwest started teasing pistachios for, you know, a listers, which is, I mean, so antithetical to, you know, maybe Beer Nuts.
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B
That's what we all want, right?
- [26:23]
A
Exactly. But of Course they did. Pistachios. Which then not only created this sort of hierarchy again, but then it's like, hello, people are allergic to nuts. It felt again like no one's a Thinking about the brand, thinking about the passengers. And if you're not thinking about the brand and the passengers, that leaves Wall Street. And if you're only thinking about Wall street, that's not a brand that will. I don't believe it will be as strong in the long run as it could have been.
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B
Well, and that could have been a setup to fail scenario anyway. It could have been checks mix. And then people say weed allergy and you know.
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A
Right, exactly. Whatever.
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B
But. But even that, that's, you know, a token. You know, we took away so much. Let. Let's give you. Let's give you something token back.
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A
Let's give the token to the A
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B
list, to the A listers.
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A
Ah, heaven forbid the people not on A list who are. Could be sitting right next to you in 27C because that's where they choose to sit. You know, gets pistachios and you get the pretzels.
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B
Right.
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A
It's just like, what's going on. Yeah, it's a small thing, but it's. But it's. I think it's indicative of how they're thinking.
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B
There was a big pushback on that. But even if they said, okay, pistachios for the masses or. Or Chex mix or Australian licorice, whatever your elevated snack is, that's still a token. You know, let's do something to normalize our behavior.
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A
Right.
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B
And say we're all still cool.
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A
Right, Exactly.
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B
Here's a little something from us, you know, that doesn't diffuse the situation. That doesn't get us back to, oh, good, you're. You are. You are seeing our best interests in mind. No, I still paid for the bag and I still paid for my seat.
- [28:11]
A
Exactly. But hey, pistachios.
- [28:13]
B
Yeah.
- [28:13]
A
Now, they probably would have went with the red ones too. That got the red. All of your hands too. So I think, because they're cheaper, I think I saw them somewhere. But, you know, it's so interesting because it's like all of these things, it's like they've diagnosed a wound.
- [28:27]
B
Yeah.
- [28:27]
A
Sold you the band aid while hiding the knife behind their back. Right. Because they created the wound that they're selling you the band aid for. Selling you this sense of, you know, we'll fix it with whether it's pistachios or charging for bags or, you know, giving you, quote, unquote an easier way to, to board.
- [28:46]
B
Yeah, well, we'll get to our fix sooner or later. Not. But they could have used that moment. I mean, they could have won us back and said, it's not pistachios. You get, you get a kit, you know, a meal kit of pre, pre, pre market test products. You know, you get to try it before everyone else just from flying Southwest and do a. While you're there, while you're a captive audience, do a, do a, do a questionnaire.
- [29:11]
A
Help us, help us decide what you're going to read. That would have been so Southwest. You know, again, we're all in this together. We're trying these things out. Tell us what you think.
- [29:19]
B
Right?
- [29:19]
A
You know, write it on the napkins. We'll collect the napkins. You know, just like when they created the, you know, the legend is they were sitting in a bar and he put the, you know, the I'm going to fly from here to here to here on a napkin. And, and people love that story. People who love the brand tell that story. And they could have done something like that with, you know, with the napkin. It doesn't take much with a brand like Southwest, who has all these different cues for you to think to sort of evolve and make change not only fun, but again, we're all in this together. We, we helped do this, and it was the right thing to do for the brand.
- [30:01]
B
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- [31:15]
A
Like, aren't I special?
- [31:17]
B
Yeah, I'm winning. I came out ahead.
- [31:20]
A
We really need to change the definition of winning, don't we?
- [31:23]
B
I think we do, but you know, but we're wired that way. We. Okay, good. You gave us, you listened. You gave us something. You gave us something substantial at least that got us through the flight. Made it more pleasant. Yeah, maybe didn't even cost the company anything. These are pilot studies or market tests. Like.
- [31:39]
A
Right.
- [31:40]
B
Companies are going to walk up and pay for the, A sitting audience that has nothing but time on their hands to experiment, experience and grade their products, you know, and give market, give feedback.
- [31:52]
A
So yeah, and, and we know the Southwest passengers on the plane are interactive. We know that they interact with the jokes, they interact, you know, with what the pilot is saying. They clap when we land. You know, when they land. It is a very, they expect that interaction.
- [32:08]
B
Well, I was going to say can, can you still. The tiered system, you know, like, we all like the A boarding, B boarding. It still was. There was a feeling of democracy about it, right?
- [32:19]
A
Oh yeah, because you could choose, you know, you said, okay, well, I'm going to get up five minutes before. I'm going to be on five minutes before I have to check in so I can get A or B or C. People who didn't care waited and checked in at C. They knew they were probably going to get a middle seat. They didn't care.
- [32:35]
B
Right. At a concert, you know, you go early and you wait to see your band and then you get in the, you stand up at the front because it's the standing room only area. You feel great about it because you planned ahead and did all those things. Things.
- [32:47]
A
Right.
- [32:48]
B
If your last, last one in. You get to the, you stand in the back and you, you that's. You still get to the concert.
- [32:54]
A
Exactly. Right.
- [32:55]
B
You know, but the minute they start introducing, you know, loge and, and balcony and all the, all those front row seats are super premiums.
- [33:05]
A
And then put barriers in front of those even. Okay, if you have this many points, you can do this or you can pay this for 9 more centimeters of space or you can pay this for 15 more centimeters of space.
- [33:16]
B
Right.
- [33:16]
A
Each of those barriers added a. Adds a conflict moment for the staff and the trickle down is then, is the staff going to be in the right frame of mind to keep creating that sense of warmth on the plane or is that going to go away too?
- [33:31]
B
Exactly. And then so one of the fundamental questions is, can you have that we're all one big family feeling? The minute you introduce tiered pricing or you paid for that seat, you didn't. You're. You're part of, part of the open fill in. You're a fill in, you know. Yeah. Can you have, yeah. Can you have a family type of feeling anymore?
- [33:55]
A
Yeah. I think that that study by University of Ontario and Harvard Business School really proved that you can't. That hierarchy, if it doesn't induce at least air rage, it still induces that feeling of either I'm better than or I'm lesser than or I'm not as important as. Which never existed before on, on Southwest.
- [34:17]
B
What are some other brands you've, you've worked on or maybe are seeing lately that have had similar or compare comparable situations where they change something? We see it, you know, like, we heard you, no more fees or what. What are some others that you're, you know, like, give us another example.
- [34:35]
A
One of the things when I was working on McDonald's, they were seriously talking about going cashless. And we were like the discussion in the room amongst, you know, because a lot of people at McDonald's brought it up. Well, but with the agency, it was, we have to remember who our customer is. Cashless means cards. A lot of them don't have that. They're unbanked or underbanked. They use cash. And that is a big, huge part of your customer. If we go cashless, you'll lose them. And it's not like there's a bunch of people waiting who, you know, only use cards to sort of come in and use them at, at a McDonald's that wasn't, you know, to make up for especially the people who cashless who eat there more often, you know, quantity of times. So something like that is again thinking. But they didn't do it. So that's thing other. Other brands that have done things. When I worked on, you know, General Motors, I was working on the Escalade, you know, in Asia, and it was like, okay, we're gonna take it to Japan. And we're like, it's not gonna fit on those roads. Right. It is too big for the streets of Japan. They weren't built for that.
- [35:46]
B
Sure.
- [35:46]
A
Korea, whose streets were built quite frankly for tanks, can, you know, have things. It's Somewhere decision making loses sight of reality. And I think we've seen that in various ads over the time. You know, the, the Pepsi ad with Kendall Jenner or of course now I'm losing all of them. I should have written them down. But there's a good history of, of ads that have really missed the mark in, in terms of either knowing their customer or denigrating. People are coming off as sort of not funny. A baby. Oh. Ah. A baby brand recently was selling all of its baby stuff with very overt. Is it a. No, it's American with very overt sexual puns. Right. And it was like, have you read the Room? Do you know what's going on in America? Let's not use sex and small children in the same.
- [36:46]
B
Let's not ever do that.
- [36:47]
A
Ever do that. But especially right now.
- [36:50]
B
Yeah, these are good examples. And we see, you know, we see companies that make mistakes in public and we see them sometimes go into apologetic mode and triage and say, we're doing it anyway, deal with it. And sometimes we say, you're right, you know, let's, let's undo all of it. And sometimes there's a middle ground. You know, I think that's what we're going to try to get to, is that, what's the middle ground like? Obviously, obviously you're a pro, you're a for profit company. You've got to, you've got to adapt, you've got to make industry changes. Maybe the problem was with the Bags Fly Free was it was such a great move. It boosted the company for so many years and it seemed like a forever promise.
- [37:31]
A
It should have been a forever promise. Yeah. Based on the purpose of the brand and the whole freedom, it should have been a forever promise.
- [37:37]
B
And the minute you take away something like that without messaging it right. And without getting your best customers on board and to say, you know, I just paid for a bag and it felt great. You know, I saw them handle it with more care and it came, it came with a sticker on it. Whatever, you know, whatever the exchange was, whatever it was.
- [37:54]
A
Yeah.
- [37:55]
B
It just didn't happen.
- [37:56]
A
There's a lot of like Ted from United or Song from Delta metrojet from US Airways. They all tried to create sort of these economy airlines, these different. But they all fail for operational reasons, not because there wasn't the need. But if you look at Qantas and Jetstar, that is a success story for the ages. It's a two brand strategy. Qantas for premium full service and then Jetstar for the economy. Service and they feed each other, right? Because for certain trips, people do buy down. For other trips, people buy up and you know, they are, they did it right. They, they kept the Qantas values. They kept the Qantas. What makes the brand, the brand, they, they kept it within Jetstar, just branded it differently and had different operational systems. And that's, I mean, duh, Right, right. It's not that hard, right? A new airline from scratch, what costs 10 to 50 million, right? That's a small regional one. You get a low cost with multiple aircraft, goes up to maybe 300 million. You know, JetBlue launched with 130 million in 2000. Virgin America launched with 300 million in 2007.
- [39:23]
B
Seems like nothing these days.
- [39:25]
A
Right? But Southwest wasn't starting from scratch. They already have, what, six 800 Boeing 737s. They have the, the manual, the maintenance infrastructure nationwide. They've created the partnerships with Icelandair, China Airlines, Condor, all those things. They have gate relationships at every. They had all the infrastructure. So for all the operational reasons that Ted and Song didn't have, they had the infrastructure in place to do something. Didn't. And they already spent massively in this transformation. They did make, right. Layoffs, the first layoffs in 53 years. 50% of corporate, like 1500 people. A corporate redesign of the structure, the booking system, the boarding process, the seats, all these things they spent money on. So if they were spending the money, why didn't they go to a dual brand strategy?
- [40:23]
B
And do you think that would work for Southwest? You think they could do. Because the budget carrier, they can't. You know, we, we've run into Spirit Airlines elsewhere, but the ultra low budget, build your fees back up way, they're in trouble too. Like, so is the model. If we did a two, two pronged approach, two tiered strata is the model we're looking at now. Is that the economy tier? And then, you know, we all have to live with that. And then there's a premium like how, how, walk me through it, how would that work?
- [40:53]
A
Yeah, Qantas and Jetstar did that. So they could do it either way. They could keep Southwest as the four year winning customer satisfaction economy airline. But then they could also create either a separate sub, you know, subsidiary or a sub brand that has. Because they want to start, you know, overseas. They want to start going to create, you know, that brand for the long haul trips. That makes complete sense to me because long haul trips, you do need a sort of a different experience on the plane.
- [41:27]
B
Right.
- [41:27]
A
For anything over you Know, five hours or whatever. And you know, Ted, which was a sub brand launched, it doesn't need any new certificates. It launched within three months. They've been working on this for a while. They've been spending money, you know, and while the sub brand and fasters and cheaper, the, the brands could blur if you go with a fully separate subsidiary subsidiary like Qantas and Jetstar, it takes a little more time, a little more money, but it gives you also more freedom, which is what Southwest Air is supposed to be all about.
- [41:55]
B
Yeah, no, and I wonder if that would help with operations to do those short hop flights under 1, 1 brand, 1 category and then do. Because they've, like you said, they've kind of bolstered their international partnerships and, and do the, do the long haul and the handoff flights as another, another side by side entity, you know.
- [42:14]
A
Exactly. And people will still, you know, if I'm, you know, going from Seattle to Chicago five or six times a month, I'm going to do Southwest. If I'm then going to go from Seattle to, I don't know, Iceland or you know, Puerto Rico or whatever, I'll take the, the long haul flight.
- [42:35]
B
Yeah.
- [42:35]
A
The same brand though, because I know them, I trust them and I'm building something with them. You know how people think about it with their credit card points and all of that.
- [42:45]
B
Yeah, no, it's really funny because we came up with something similar for Starbucks when we talked about Starbucks. You know, if you know your order, you're there every day.
- [42:53]
A
Yeah.
- [42:54]
B
It's repeatable. Rinse and repeat. You go to Starbucks Express. This is our, our creation. But if you want to sit around and listen to the soundtrack and work for a while, go to Starbucks Lounge. You know, and there's three different entities that are under the same family. Right. And they're both Starbucks. But it's, it's, you're, you're not backing up the queue if you say ah, when you first get to the front and say, oh, what's, what's in your, your cinnamon latte, you know, go to, go to the lounge.
- [43:23]
A
Yeah. You know, the app was such a disaster, right. Because you'd order on your way to work. You'd go in there and then there's 70 people waiting for their app order. You know, so it's, it's sweaty and crowded and.
- [43:36]
B
Yeah. So if I go to la, to Denver, you know, twice, twice a week, I'm a business commuter, then I'm going to take the Southwest. You know that we know it now and there's going to be accommodations for me as a passenger.
- [43:50]
A
Right.
- [43:51]
B
If I'm doing the international, you know, going to Paris and I've got Southwest as my domestic transfer point, that's going to be a different experience, but it's going to be under the Southwest family. And maybe we can use some of our operations to tailor how each of those experiences are and make it more pleasant for everyone involved.
- [44:12]
A
Exactly. And they're not cashing in the equity that the old, that Southwest created. Right. It's created a halo for them to use. You know, they're not draining it, which is what they're doing.
- [44:26]
B
I'm with you on it. So in a market like this where the, you know, you talked about the layoffs, you talked about there could be more, you know, there's always, could be more layoffs. There's, we're seeing it everywhere. But then there's also American Airlines where the story is that the unions or the, they want to oust. They want to, the employees are banding together. They want to oust the president. And I didn't look today, maybe it happened, I don't know. But you know, in a, in a fear based market where everyone's job's on the line, do you think something like the Southwest situation, if enough employees got together and said, we want to impact meaningful change, they started to make the rounds in, you know, the media circuits and said, we are the employees of Southwest. We don't agree with the corporate decisions. We want new leadership. Do you think that, number one, would they be fired tomorrow? And number two, do they have power, you know, in, in numbers to re. Regain some of what people used to like about the company?
- [45:22]
A
Yeah. I don't want to talk out both sides of my mouth, but I do believe they have power. They, they flexed a little bit when they wanted the flight attendants to sort of put all their bags in the back. The flight attendant said, no, we're not going to do that. They followed the flight attendant's lead. But with the job market the way it is and with all the people out of work, I have no doubt they could fire a good portion of them and have them replaced really quickly. I could just see that causing more problems. Right. Because there are no crudes like the Southwest cruise and wanting to recreate that now without sort of the, the whole brand behind it. I don't think that'll happen. So again, you just, you continue the, the walk towards the sea of sameness. Right. Towards every other airline out there.
- [46:10]
B
Right? Totally. Okay, well, I think we've Got enough to fix this? I feel, I feel we did good here.
- [46:17]
A
I think so. I mean, they could roll the. The window is narrow, but they could fix it in a day. You know, they can say, you know what? We tried this, boy, where we, we made a really big mistake. We're going to do this instead. They could fix it.
- [46:30]
B
Yeah. Well, okay, here's what we're going to do, right? We're going to do two companies over time. Not tomorrow, because that's just going to create more market confusion. But let's do the short hops and, you know, the, the one. One leg to another. Let's call. Let's call that a company. I don't have a name for it. Maybe you do. Yeah. And that's for the everyday traveler, you know, and then we. We go a little bit premium just to acknowledge we. We're doing what every other airline's doing.
- [46:55]
A
Yep.
- [46:56]
B
And you get the Southwest flavor and we're bringing back some of the joy and some of the personality that you liked because you, you know, you were a Southwest passenger for a reason.
- [47:05]
A
They have 800 737s. They could chop off 50 of those for the first group of long hauls, repaint them, rebrand them, fix some stuff on the inside and. And, you know, Bob's your uncle.
- [47:17]
B
Okay. For the economy version at least, we're going to monetize our passengers and give them something they like and they're going to be part of, you know, they're going to watch a show as a pilot and give feedback to the network. They're going to eat snacks that are pre market, and companies are going to pay for the privilege of getting in front of your passengers.
- [47:34]
A
And I'd roll back. I mean, I'd come back with bags, fly free and not pay, you know, end up. And I changed the boarding system back.
- [47:41]
B
What about free. Free transparency. So we've seen, you know, with ticketing and, you know, concert tickets and, and hotels and all that, you know, you pay. You pay what? You pay. What about that? You know, you bring a bag, that's.
- [47:52]
A
Transparency is key, especially these days. The amount of trust people have for our classic, you know, institutions is at an all time low. We need somebody to trust. And Southwest Airlines had that in the bag. So. Absolutely. Make it transparent and say, you know, you know, as part of our mea culpa, we're just, we're going to make it all transparent for you guys so, you know, we're not gaslighting you again.
- [48:18]
B
Yeah. And maybe we all pay a Little bit more if we all did. Do you think that being able to reserve your seat, you know, first come, first serve basis, but pre reserve it, do you think that would be a good.
- [48:28]
A
Well, that's what happens. That's what happens with a list, you know, anyway, you, you reserve the right to join to get on the plane first and choose whatever seat you want. Not everybody chooses the first three rows, aisles or windows, you know, so if you continue in that vein. Right. I think they only have like the first 15 or somebody can do that.
- [48:49]
B
Yeah.
- [48:49]
A
You know, extend it to 30, I don't know. But that is something people are used to on Southwest Airlines. And again, if they want to. To choose a very specific seat and have the ability to do so, you know, fast, then you can do that. If not, you know, I boarded in C group, you get a seat, you arrived at the same place.
- [49:09]
B
All right, so give freedom of choice for those who want, you know, need control and want the choice. Don't mock us, the rest of us, for enjoying your open seating policy. It was very efficient. Fee transparency. Again, maybe we all pay a little more. Those who bring bags, you bring bags. Those who got an aisle seat, they get. Good for them, they get an aisle seat. Again, monetize your passengers if you, if there's a way to do it as a nice exchange and make up some of your bag fees that way. Economy carrier, short hops. You all know why you're there. Do it that way if you're going to look like it. Every other airline for your longer haul flights do. Do it the Southwest way.
- [49:43]
A
You know, there are people who sign up for, you know, the online, the digital research. Anyway. Yeah, you're sitting in, you're sitting on Southwest. You're. I mean, we are Southwest customers are the salt of America. They're what everybody wants. You know, the sort of. So they fill out a survey on a little thing. They get some miles. The, you know, Southwest gets some money
- [50:06]
B
and yeah, you've worked with enough brands and, you know, market research, wouldn't someone pay $50 ahead for.
- [50:12]
A
Oh, totally, yeah.
- [50:14]
B
So done.
- [50:16]
A
And you know, you have them for a, you know, an hour.
- [50:18]
B
Yeah, a couple hours exactly.
- [50:20]
A
You know.
- [50:21]
B
Yeah.
- [50:23]
A
And you can choose not to do it if you want. Sure.
- [50:26]
B
Yeah. Don't eat it. It's fine. And I'll go. So we'll go one further. So we're gonna get an ambassador, someone who's very camera ready, you know, who's an actual from Southwest flight crew. It's not going to be Betty who's burned out. It's going to be someone fresh faced energy saying or somebody who's been there
- [50:43]
A
for a while and just knows it by heart.
- [50:45]
B
Knows it by heart.
- [50:47]
A
Like the flight attendants who get on and are funny.
- [50:50]
B
Yeah.
- [50:51]
A
You know, online and. Yeah. One of those women or men and maybe a baggage handler or a group of them.
- [50:57]
B
Yeah. But somebody who represent this coalition, maybe they've got a, you know, a petition with signatures then in the thousands and they say look, that's the, that's the corporate face of the company. That's one, one voice in this equation. Here's what you're not hearing from. These are us, we dissent. We don't, we're not following what you know. And like I said, they make the media rounds. They're fresh face. They, they have tons of energy, they want what we want, you know and we're gonna maybe align more with them than with, with the corporate overlords that are saying, you know.
- [51:30]
A
Right, we need more money, you know, for Wall Street.
- [51:33]
B
Yeah, right, right. And I, I'll say I own a tiny insignificant amount of Southwest stock. So if a stock does well like that tiny part of me, it could, it could go up, you know, 10 times. It's not going to change anything in my life. But that tiny part of me is like great, good, they're doing good as a company. But the rest, the rest of me and succeed.
- [51:54]
A
But they can succeed doing, being who they were and continuing the positive.
- [51:59]
B
Yep, totally. So and I think you know, from within if they get those employees that are, you know, like you said Rooney, if they're fired tomorrow, that's a good story for just, for saying what everyone else is saying. If they impact meaningful change. That's a good story. So it's kind of a no, no lose situation there. Okay. Ambassadors to companies getting exploit your passengers in a good way in a mutually beneficial way with, with products and market feedback, fee transparency, maybe we all pay a little more and then we all get what we want. If we walk this, you know, walked it over to Southwest door and said here you go. Did we fix, did we diffuse the tension in the room? Did we fix their situation?
- [52:42]
A
If it was southwest of 12 years ago, 15 years ago, I think they would absolutely, I don't think we'd be in this position in the first place. But if we were, absolutely. I think they'd listen now with the money people and the management, they have vc, all that sort of stuff. I don't think so. I think they look at that Wall street number and that's it?
- [53:07]
B
Well, let's do the hypothetical. If they listen to us, would. Would we fix it?
- [53:13]
A
Oh, absolutely. I believe we would. I mean, who. Who doesn't like a comeback story like this?
- [53:19]
B
Yeah.
- [53:20]
A
And, I mean, there are no passengers like Southwest passengers who just love that brand. And they're all out there right now filling the world with negative stuff. Flip that around. I bet we'd convert some never southwest, because there are people who would say, I will never fly Southwest having never flown it, not knowing anything about it. Right. I bet we'd convert that.
- [53:40]
B
I think we would.
- [53:41]
A
And I think our load crafter would go up.
- [53:44]
B
I think we could do something in a month, and I don't think their stock price would go down because of it.
- [53:48]
A
No.
- [53:48]
B
All right, Southwest, your move. That's. I love this conversation. Yeah. We're gonna. We're gonna wrap up our episode, so let's take it in for a landing. And before we go, I would like to give a big thank you to Rini, who he lift in for joining me. Rene, I want people to find you, so tell them, tell everybody where they can keep up with what you're doing.
- [54:05]
A
Yeah, you can find me at the website thedanecollective.com and also, it's just reni r e n e@thedanecollective.com for my email, and I'd love to sort of hear from you and let's. Let's solve the world or let's, you know, let's do cool things. Yeah.
- [54:23]
B
Absolutely. Fantastic. Thank you, Rini. If for those of you listening, if you're listening on the go or you travel, don't forget to take us with you. We have a new episode every week, and we are great company. Save us a window seat and we will see you next time. We hope you enjoyed this episode of we fixed it. You're welcome. We go into every episode somewhat cold, and nothing we say should be construed as legal advice, financial advice, or anything that would get us in trouble. All trademarks, IP and brand elements remain property of their respective owners.
- [54:59]
A
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