Southwest cracked the code on low-cost flying: standardize on one plane (737s), turn aircraft in 15 minutes instead of 45, and fly point-to-point routes the big carriers ignored. They became profitable their first year with just three planes.
Success bred complacency. While competitors modernized through bankruptcy and consolidation, Southwest kept running on 1990s crew scheduling software. Finance-guy CEO Gary Kelly shifted focus from operations to financials. They cut IT investment right as the network grew complex, ignoring pilot warnings for years.
Stock down 50%. CEO fired. Activist investors forced the first layoffs in 50+ years. Abandoning open seating and free bags — becoming the fee-charging incumbent they once mocked. Still profitable, but barely.
