DALLAS—For Southwest Airlines Capt. Casey Murray, the air carrier’s massive Christmas meltdown was no surprise. Murray, the president of the pilots’ union there, had forecast it on his podcast a month before.
And Southwest may be the proverbial “canary in the coal mine,” Murray and other union presidents of other worker groups—flight attendants, ramp agents, pilots, and mechanics—warned, back in August.
Because, they said in a joint statement then, all the nation’s big air carriers are flying into trouble since they put Wall Street and its profits ahead of their passengers and their workers.
Southwest was just the first, and the worst, of this year’s disasters as the massive cold and blizzards grounded the nation’s air travel over the holiday flying season. But while United, Delta, and American, the other big three of the nation’s air carriers, recovered quickly, Southwest didn’t. Flight cancellations reached or exceeded 90% for more than a week, stranding flight crews, planes, and hundreds of thousands of passengers.
And all this came just after Southwest management announced a $426 million dividend payout to shareholders, its first since before the coronavirus pandemic hit, devastating the entire airline and travel industry.
That’s not a coincidence.
“I fear that we are one thunderstorm, one ATC (air traffic control) event, one router brownout from a complete meltdown. Whether that’s Thanksgiving, or Christmas, or New Year, that’s the precarious situation we are in,” Murray, president of the Southwest Airlines Pilots Association (SWAPA), said in the Nov. 12 podcast.
“Years in the making, this meltdown happened because Southwest’s management lost touch with its employees and became fixated on accounting metrics, stock buybacks, and institutional investors. This meltdown was predictable and preventable, and the pilots of Southwest saw it coming,” Murray added in a recent op-ed in The Hill.
The prime culprit is Gary Kelly, the CEO, an accountant, who succeeded the late and legendary airline founder Herb Kelleher in 2004. Kelleher added Capt. Tom Nikouei, SWAPA’s 2nd Vice President, in a column on the union’s website.
“Kelleher spent time on the front lines of the airline; he lived and breathed the day-to-day operation, and he knew the people who ran it. Everyone in the airline, from the front office to the front end of Southwest’s fleet, had a shared goal: Take care of customers by running an efficient operation and take care of one another. Customers loved it, and employees loved working for Southwest,” Nikouei explained.
Kelly fixated on the bottom line, expanding the airline, but not its control systems. And the problems began in 2014, he added. By 2016, the systems were so out of date and conditions so bad that SWAPA’s board passed a no-confidence vote in Kelly.
“Kelly made a conscious decision to make the less than necessary investments in tech upgrades in favor of maximizing shareholder return because, well, “our tech’s been working ok for 20 years…His poor operational leadership and judgment have been demonstrated repeatedly with each meltdown and finally laid bare with the current situation,” said Murray.
“SWAPA has been beating this drum to management for nearly a decade pleading with them to spend the necessary capital to prevent the ultimate consequence someday. As CEO, Gary Kelly made a conscious decision to make the less-than-necessary investments in tech upgrades in favor of maximizing shareholder return because, well, ‘our tech’s been working ok for 20 years.'”
While Southwest’s meltdown is the worst, Kelly and all the other airline union presidents—including Sara Nelson of the Flight Attendants, Sean O’Brien of the Teamsters, and Capt. Joe DePete, the outgoing president of the Airline Pilots—warned that catering to Wall Street by putting profits over passengers and workers has the airlines flying into trouble.
And they issued that warning in August while launching nobuybacks.org, a campaign against airline stock buybacks. Those financial moves please investors and rob airlines of money needed for upgrades and improvements.
“It’s time for the lawlessness of Wall Street to end,” said O’Brien.
From 2014 through 2019, United, Southwest, American, and Delta rewarded Wall Street with more than $39 billion in combined stock buybacks, the union leaders said.
“We paused the greed in aviation for a little while with legislative constraints tied to COVID (coronavirus) relief,” said Nelson. “But the greed that ran rampant before COVID created a system that was already stretched thin with minimum staffing and high overtime hours. We can’t allow executives to send one dime to Wall Street before they fix operational issues and conclude contract negotiations that will ensure pay and benefits keep and attract people to aviation jobs.”
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