A Personal Confession
I have a confession to make. Though I have flown hundreds of times, I have never flown on Southwest Airlines(LUV), America’s second largest airline. I never experienced Southwest’s open seating, nor benefited from its free unchecked bags. This is not by design—Southwest has a relatively small presence at my home airport.
The Soul of an Airline
I read all the business books about the culture Herb Kelleher created. That culture—the company’s soul—is now gone. Was the change necessary to save Southwest? Is maximizing profit the only thing that matters?
The Activist Onslaught
In 2024, activist investors launched an assault on the airline’s identity. Elliott Investment Management, with a $1.9 billion stake, declared that Southwest was bloated, backwards, and underperforming. They weren’t entirely wrong: operational issues, tech meltdowns, and stubborn adherence to legacy systems had frustrated investors and customers alike. But their solution wasn’t evolution—it was amputation.
The End of an Era
Now, under pressure, Southwest has abandoned key tenets of its identity: assigned seating is being rolled out, the once-sacred free baggage policy has ended, and change fees are returning. The airline once known for “bags fly free” and no change fees now sounds more like Spirit, minus the neon yellow.
Culture in Decline
Gone, too, is the employee-first culture that turned flight attendants into brand ambassadors and gate agents into unsung heroes. Kelleher famously said that if you take care of your employees, they’ll take care of your customers. That philosophy created a workplace that felt more like a family than a corporation. Today, the mood has shifted. Morale has dipped, and trust in management is eroding as workers grapple with a company they barely recognize.
Simplicity Rebranded as Stagnation
Southwest’s uniqueness was once a competitive advantage, not a liability. Its simplicity—one aircraft type, quick turnarounds, straightforward pricing—was revolutionary. Now, those same traits are painted as limitations by hedge fund analysts. The drive for “modernization” has brought complexity and confusion, eroding the very consistency that once made it beloved.
The Profit-First Philosophy
Kelleher’s philosophy wasn’t about gimmicks. It was about people—employees first, passengers second, shareholders third. That inverted pyramid created loyalty and profitability over decades. But in an era where Wall Street demands quarterly growth, not cultural continuity, Southwest’s contrarian charm has become a liability.
When Values Are Valued Less
It’s not just a business story—it’s a story of values. When activists descend, they rarely ask, “What makes this company beloved?” They ask, “What can we cut, sell, or squeeze?” For Southwest, the answer might be everything that once made it different.
The Cost of Conformity
The irony is that Southwest was profitable for much of its history precisely because it wasn’t like other airlines. It avoided the race to the bottom. It thrived on word-of-mouth goodwill and operational consistency. But those assets don’t show up cleanly on an activist’s spreadsheet, so they’re treated as inefficiencies to be corrected.
A Saint Among CEOs
The airline industry has few saints, but Kelleher was one of them. And even if you never flew Southwest, you could admire what it represented: a rare combination of consistency, humanity, and humor in an increasingly commodified sky. That era, it seems, is boarding its final flight.
The Bottom Line
Southwest may survive. It may even thrive—on spreadsheets. But if it becomes just another airline, we’ll have lost something we didn’t even know we needed. And no amount of quarterly earnings can ever replace that.
