One thing about the Southwest airlines logistics disaster is how it has the same cause as the threatened railroad strike and low domestic oil production and the lack of semiconductor manufacturing:
U.S. companies had more than enough money to fix it in advance, but they chose to goose their valuations with investor windfalls like stock buybacks.
The question is why our tax laws don't discourage that.
@maxkennerly @kornbluh I used to work in aviation. Even in the best of times, airlines are barely profitable - see chart linked. https://archive.ph/KqZ5R
And they lost a lot of money during the pandemic. So if they put off the large capital and operational expense of moving to a new scheduling system, I understand why.
Of course the outcome of that gamble was not fun for anyone involved. But the idea that the airlines are rolling in money, or that they over-reward their shareholders, does not seem to be in keeping with the facts.
More to the point, I'm not sure the stock market is going to reward Southwest for what happened. The reputational hit alone is going to be significant. This will damage both the airline and its shareholders.
As for regulation, the idea that aviation - an industry dominated by regulation - needs more, is at best problematic. You only need to see how sternly the Dept of Transportation reacted to this to know how tightly controlled this space is.
More regulation would likely lead to even more unintended consequences, most of which would impact consumers.
@fallingbeam
They were profitable enough to do $5.6 Billion in stock buybacks in the 3 years prior to the pandemic, and were doing well enough afterwards that they became the first airline to reinstate dividends. All while knowing that their IT and infrastructure from the 1990s was a house of cards, but not bothering to invest the money to fix it because it would've counted against their short term bottom line.
@fallingbeam @Incognitim @kornbluh @maxkennerly Also, while Southwest undoubtedly lost a lot of money during the pandemic, their CEO compensation numbers from 2019 and 2020 reflect the priorities that Max originally cited.
Like PG&E paying outrageous CEO packages while failing to do mandatory forest maintenance around their power lines in California, causing devastating wildfires year after year: it’s short term individual gain not long term collective.
Max Kennerly
fallingbeam
Incognitim
Kirk Rudell
Robert Denby