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Welcome

Friends,

First, happy Saturday.

Second, I hope the conclusions I draw in today’s post are wrong—but I felt this needs to be articulated.

793 words: let’s get going.

Links

The spiraling effect of Heathrow’s closure are massive.

Korean Air is planning to give Boeing a boost.

Delta introduced a new safety video to commemorate their 100 years of flight. It’s novel but uninspiring—though perhaps that was their intent?

Story

It’s Saturday night—go out and enjoy it! I’ll try to keep this post brief.

Taylor Swift claimed her reinvention most notably in her 2017 song “Look What You Made Me Do.” Say what you will about her, but she made the strategy clear—and executed it with remarkable success.

The current leadership team at Southwest Airlines is trying to call a similar play—or at least that seems to be what they think they are doing. It is, at best, a tough one to execute on the field.

Especially if you are an airline.

The reality with Taylor Swift’s reinvention is her product has, by most measures, improved. Southwest is (at present) purely implementing changes that are despised by consumers while moving their brand from being positioned as a maverick to (at best) the mean—in an industry largely hated by the traveling public.

Worsening your product while hoping that the customers who denominate your profitability and have materially viable alternatives will continue to buy from you does not age well. Some might call it delusion.

This is not about free bags or assigned seats, but a complete misunderstanding of what historically drove consumer loyalty to their brand. From leisure travelers to corporate accounts to brand loyalists, Southwest is removing nearly all reasons to choose to fly with them outside of schedule (and as American has learned the very hard way, an airline’s product is more than a schedule).

Delta and United currently command over 80% of the industry’s profitability because of their respective brands holistic value proposition. Put another way: Delta and United are massively winning because they are bigger and better. Southwest is not bigger and making themselves massively worse.

That is when the math stops working: if 80% of your revenue is denominated by 20% of your customers, you lose by alienating 100% of everyone.

Plainly: it is my present belief that Southwest will not survive these changes.

Southwest’s corporate malaise runs, evidently, very deep. For as much as he was dealt a bad hand, current CEO Bob Jordan’s tenure should have ended following the 2022 Christmas collapse. Instead, he got a pass and was paid more as the former board tried to shake it off.

The music is stopping—and the former board has been replaced by a collection of failed airline executives who sit on the current board.

I could go on—collapse doesn’t usually happen all at once (Rome’s took almost a millennia). The end of Southwest will not occur when they start charging for bags on May 28, but as it becomes clear that previously loyal customers are left with few reasons to fly on their 737s and defect to other carriers with lower fares, better schedules, stronger networks and superior products.

The old Southwest is dead. And unlike the old Taylor, that’s a disaster for shareholders, employees, and customers alike.

Brands do not survive broad, material deteriorations of consumer confidence—because in otherwise competitive industries, product quality coupled with emotional connection (perceived value) is what creates profitability. Abdicating both is reasonably unwise.

In this, the actions of Southwest’s current leadership leave only one rational conclusion: they have no idea what they’re doing.

I hope I am wrong.

Big Picture: Taylor Swift has reinvented herself to continued, massive success as have many airlines—but commercially this requires doing the right things to make your product better for the people who actually buy it from you. Southwest is doing none of these things.

Happy flying.

Disclosure: I’m a Southwest shareholder and longtime admirer of the airline. As mentioned in previous posts, I advocate for change insofar as innovation and product are concerned—however the present brand narrative coupled with the visible disconnection of the current leadership team to their customers lends my opinion strongly to one of no confidence.

Remember, this life you are living has meaning. Thank you for reading. I am grateful you are here and would love to hear from you. If you'd like to write me a note, simply reply to this email. Otherwise I'll see you in the next one.

Be well today. -Tommy

P.S. If I can ever help you plan your next travel adventure (slash help make your points go farther), I’d be delighted. You can schedule time together here.