SFGate: Southwest's recent troubles just minor turbulence

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Thursday, September 27, 2007 (SF Chronicle)
Southwest's recent troubles just minor turbulence
George Raine, Chronicle Staff Writer


   There's every expectation that by year's end Southwest Airlines will
report its 35th consecutive year of profitability. But that doesn't mean
there's no turbulence on the horizon.
   For the first time in memory, the much-beloved discount carrier is
experiencing some real criticism.
   It all started in July when a young, female passenger on a Southwest
flight was told her outfit was too revealing. As one can expect, there was
a rash of complaint and commentary on both sides of the issue.
   And then Southwest changed its signature feature - the cattle-call
boarding process that most everyone either loves or hates - and said it is
dropping preboarding for families with small children.
   Combined, the events had some people questioning whether Southwest was
turning its back on its core values.
   Criticizing a woman's dress? From a company whose flight attendants used
to wear hot pants? And changing the boarding policy? Ostensibly, to
attract more business travelers?
   It all didn't add up for a company that has been hugely successful for
decades, avoiding many of the pitfalls that have crippled larger carriers
in recent year. The Chronicle set out to find out what was going on at
Southwest. What we found was a company receiving bad PR for some policy
changes and a gaffe by a supervisor, but a company that is still doing
just fine.
   It's been an odd patch lately for Southwest, and while this run of quirky
publicity may amount to minor turbulence of the "this-too-will-pass"
variety, many consumers have been upset by the company that trades common
stock under the symbol "LUV."
   Southwest, like any brand, must do what is necessary to hold onto its
customers, and while the airline says it is on track this year to fly more
than the 96.3 million passengers who boarded in 2006, there's been ample
fodder for complaint by passengers and others given to opining about
airline industry missteps.
   The biggest controversy Southwest stirred up recently surrounded the
decision to abandon preboarding for families with small children, ticking
off countless parents
   "There are lots of reasons to fly Southwest and preboarding is one of
them," said Rachel Anderson of Berkeley, the mother of 3-year-old twins.
By doing away with the privilege, "They seem to be floundering a bit as
they try to figure out who their core customer is," she said. "I'm looking
at other options now."
   It was the spiking of the preboarding privilege for families - although
they will still get somewhat preferential treatment, boarding right after
the first group gets on the plane in the airline's famous open seating
system - that recently stirred the most passions.
   It was announced Sept. 19, while Southwest was also saying it is tweaking
its boarding practices. Southwest said it looked at and then rejected the
idea of assigning seats and is staying with open seating, in which
passengers select their seats once they get aboard. But they're refining
the way passengers board to try to alter the offensive perception of a
cattle call.
   In that change, passengers will receive a boarding pass with a letter and
a number, and will board in the order in which they checked in. Passengers
can still do this online, beginning 24 hours before a departure. They'll
board in groups of five based on boarding letter and number and queue in
two lines each in the A, B and C groups. The airline believes this will
allow people to board more quickly.
   The idea was broadly approved of by consumers, the airline says. But the
loss of the preboarding privilege for families was not. Analysts believe
the move stems from Southwest's effort to attract business travelers,
which spokesman Chris Mainz acknowledged.
   "There has been a focus by Southwest to attract and retain business
travelers and so I do think (the boarding practice change) will address
that and allow customers to be more productive at the gate," without the
necessity to remain fixed in boarding queues, he said.
   But young families say they're antagonized as Southwest finds its new
model. Especially considering the company lists "stick to what you are
good at" and "keep it simple" as the first and second of its six secrets
of success.
   Families with children 4 and under - they've boarded first at Southwest
since its founding in 1971 - will be eligible to board with the A group if
they have A boarding passes, but generally the change is to accommodate
all passengers, the airline said.
   Mainz, the Southwest spokesman, said the process was tested in San Anton=
io
and young families did not feel put out and were still able to take seats
together.
   "We're hopeful the business traveler, the leisure traveler and families
alike will give the new procedure a chance," said Mainz.
   Christopher Elliott, who specializes in travel and customer service at
National Geographic Traveler, said he thinks Southwest would need to offer
not only preboarding but also a first class section in order to attract
significant numbers of business travelers.
   "I don't see them doing that any time soon," he said.
   Beyond the boarding problems, others wonder whether Southwest is
abandoning a core philosophy that has driven it since its inception.
   That core belief is to put employees first, customers second and
shareholders third, said Mainz. The theory is, "If you treat employees
well and we create a fun working environment, they're going to enjoy
themselves and will treat customers with great service. Those customers
will keep coming back and that should make shareholders happy," said
Mainz. "It's a true trifecta - a win, win, win," he said.
   Some people wondered whether Southwest walked away from the employee-fir=
st
philosophy when it made a very public apology to 23-year-old Kyla Ebbert,
the San Diego college student and Hooters waitress who on July 3 was told
by a Southwest supervisor, while preparing to depart on a flight from San
Diego to Phoenix, that her attire was too revealing.
   Ebbert, annoyed, made an adjustment, placed a blanket over her legs and
shortly thereafter was on the "Today" show, in the same attire, and then
on "Dr. Phil," where she rejected an offer from Southwest for two free
tickets and said she'd never fly the airline again.
   Gary Kelly, Southwest's chief executive, didn't let it end there. He tap=
ed
a double entendre-laced radio ad that aired this month in the airline's
major markets, begging Ebbert's forgiveness, asking her to come back and
announcing fares would be lowered "in celebration of hot pants and
miniskirts alike."
   "In an effort to get at the naked truth we have finally been caught with
our pants down," said Kelly, in the ad.
   The incident in which the Southwest employee objected to Ebbert's
miniskirt and the rest of her attire "represented a clash of values that
is not at all uncommon in today's diverse marketplace," said David
Stewart, dean of the A. Gary Anderson Graduate School of Management at UC
Riverside. "There is likely a need with Southwest for some employee
training to prevent this happening again," said Stewart. "But the
follow-up was brilliant. It was a very creative and effective recovery."
   To some, the incident was much ado about marketing.
   "I think it was more of a publicity stunt than an apology," said Elliott,
of National Geographic Traveler, "which doesn't mean that management
doesn't support employees. I think folks at Southwest are having a good
laugh at this whole episode. And there is every indication that they are
pleased with the free publicity they're getting."
   If that's the case, it is making lemonade out of lemons, and something
else Southwest has done right, said Joe Brancatelli of New York, who
produces a website and newsletter for business travelers.
   "No other airline can match their profit record," he said. "I'm willing =
to
cut Southwest management some slack. The legacy airlines can't make money
for 35 days, let alone 35 years." Southwest by the Numbers
   3,300
   Approximate number of daily
   departures
   33,000
   Number of employees
   $499 million
   Net income in 2006
   96.3 million
   Passengers carried in 2006
   $9.1 billion
   Operating revenue in 2006
   63
   Destinations
   93.8 million
   Bags of peanuts served in 2006
   1.6 billion
   Gallons of jet fuel consumed in 2006 Source: Southwest Airlines

   E-mail George Raine at graine@xxxxxxxxxxxxxxxx -------------------------=
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Copyright 2007 SF Chronicle

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