Southwest Airlines Strategy & Operations Case Study

Let me tell you a Strat/Ops story about how I refined Southwest Airlines’ famous ‘open seating’ boarding process. 

In 2006, Southwest Airlines (SWA) was experiencing severely declining customer satisfaction scores. The C-suits’s hypothesis was that the open seating policy, and its associated first-come-first-served seat selection process, was the root of the problem. The obvious solution would be to switch the open seating policy to assigned seats, chosen at the time of purchase, like how all other competing airlines operate. 

The complication was that SWA enjoyed key operating advantages that resulted in economic advantages from its open-seating strategy. Airlines only make money when aircraft are in the air, not on the ground. The airline industry uses ‘turn-time’, the amount of time an aircraft spends on the ground in between flights, to measure this operational fact. 

SWA had the lowest industry turn-time, 25 minutes, compared to the industry average of 75 minutes, a whopping 50 minute advantage. SWA was able to achieve this because of the open seating policy + accompanying passenger (pax) behavior which incentivized efficient seat selection and staying put. 

SWA’s open-seating policy created an operational advantage because pax on SWA are trained to move and behave more efficiently than pax on competing airlines. I learned these insights by spending 6 months intensely observing pax behavior in (a) airport gate areas, (b) boarding jetways and (c) onboard aircraft. 

I designed an experiment to measure the difference in boarding times with open seating vs. assigned seating in order to provide a factually definitive, and data-driven answer to the CEO: 

Problem Statement: Could SWA operate an assigned seating strategy and maintain a 25-minute average turn time across a network of ~2,300 aircraft operating ~6,000 - 7,000 daily flights, where each incremental minute of turn-time costs $20,000,000 operationally annually?

I stood in jetboarding bridges in MDW, ORD & DAL for 6 months measuring every parameter that could possibly affect boarding time so that I could run a regression analysis to determine if there was a statistically significant difference in boarding times. 

I visually counted and recorded with a clipboard and stopwatch:

• # of total pax

• % mix of leisure pax vs business pax

• # of roller-boards (hand luggage with wheels)

• # of handbags

• # of backpacks

• # of odd-items, e.g., skateboards, pets, walking sticks, etc…

• # of wheelchairs

• # of strollers

• # of families

• # of pax in pre-board group

• Flight time of departure

• Flight day of week

• Originator or non-originator flight

• Aircraft type

• Total boarding time = when first pax boarding pass is scanned to when last pax butt in seat

I ran the experiment at SAN airport in the summer of 2006 with live flights, and live pax. SWA didn’t even have the ability to electronically assign seats for the operational experiment. I led a large team of consultants and clients. We thought of every possible scenario that could happen and we made a plan for it. 

• We manually assigned seats behind the gate, in an office before each flight. 

• We made playbooks to manage pax confusion, complaints and escalations. 

• We had client team representation from every functional department touched, e.g., ramp operations, gate operations, pilots, flight attendants, reservations, customer servicer, local station leadership, public relations and comms, everybody.

• We had teams working each function, 7 days/week for 7 weeks. 

In the end, my team made the recommendation to the CEO that went against their initial hypothesis, to NOT change a key ingredient of SWA’s operating recipe from open-seating to assigned seating, but to shrink the boarding groups instead. Changing just that one ingredient in their operating strategy would have led to many negative downstream impacts. If you have flown on a SWA flight since 2005, you have followed a strategic operation that my work directly influenced. 

I was 23 years old at the time. 

I don’t just call myself a business strategy and operations expert because it sounds official. I earned that description from on the ground operating experience like this. 

Let me leverage that experience and learning to help your business grow. Reach out today.