airlines – The OM Blog by Heizer, Render, & Munson

OM in the News: Airlines and a Slew of Operations Issues

“Airlines have found that they can’t sustain the higher levels of flying they had hoped to offer to capitalize on rising demand,” writes The Wall Street Journal (July 22, 2022). Staffing shortfalls, training logjams and constraints at overwhelmed European airports in particular are stifling their resurgence and forcing them into more restraint. Airlines are reining in their schedules for at least the rest of this year—not because they can’t fill their planes, but to avoid costly OM stumbles.

American’s travel has surpassed 2019 levels and remains strong. But its third-quarter flying capacity will be 8% to 10% lower than in 2019 as the airline pulls back capacity to build additional buffer into its schedule. The weather in June was challenging, with significant issues on 27 days that overwhelmed the airline. It canceled over 5% of flights that month.

United and Delta have also said they would cap growth in the coming months to run more reliably. Those pullbacks and efforts to avoid delays and cancellations add to the cost pressures. Delta expects to pay $700 million in overtime and premium pay to help avert disruption, and United will stay overstaffed while it gives priority to reliability over growth. “There is weather, and people do call in sick, and and stuff happens. And the system just doesn’t have any buffer to deal with that,” United’s CEO said.

Carriers needed to bring on thousands of workers to replenish their ranks after offering buyouts and early retirement packages to slash costs in 2020. While their staffing levels are once again nearing prepandemic levels after a recent hiring spree, airlines have are finding that is no longer enough as they work through big backlogs of training requirements and adjust to a workforce comprised of less experienced employees to get back up to full force.

Air-traffic control is also short staffed, leading to problems in highly trafficked corridors such as Florida and New York. And acute staffing shortages at major European hub airports have been a big source of the summer’s chaos. London’s Heathrow Airport is capping the number of departing passengers and asked airlines to stop selling new tickets from the airport for the summer season.

Classroom discussion questions:

Outline the operations issues that airlines are currently facing.
In Supp. 7 (Capacity and Constraint Management in your Heizer/Render/Munson text), we we discuss ways to manage capacity and demand. Which can be employed here?

OM in the News: Hospitals Learn About Safety From Airlines?

Major U.S. passenger airlines have forged a phenomenal safety record largely by relying on pilots, controllers and mechanics to voluntarily report incipient hazards. Analyzing such incident data and then disseminating lessons from it has meant more than a decade without a fatal crash.

Over the same period, the country’s healthcare system has tried to mimic some of these air-safety principles, but it has made scant progress in eliminating deadly treatment errors. Mistakes in hospitals are estimated to cause at least 250,000 unnecessary patient deaths annually in the U.S., reports The Wall Street Journal (Sept. 4-5, 2021).This makes it the fourth leading cause of medical fatalities after cancer, heart disease and Covid-19. Determined to do better, healthcare leaders are now doubling down on aviation’s lead.

The heart of the idea is prodding doctors and hospitals to share more digital data and wholeheartedly embrace self-reporting of their potentially deadly “near misses,” the way that pilots already do without fear of punishment. But as long as hospital equipment isn’t designed to guard against human slip-ups, as jetliner cockpits are, “it will be far too easy to crash the plane in healthcare,” says one hospital Chief Quality Officer.

One obstacle is that financial incentives for hospitals are still not aligned around quality and safety. Typical billing practices track the number and complexity of procedures instead of the outcomes. Information sharing in healthcare is pitiful compared to aviation. When medical errors are reported, it’s usually well after the fact, and information usually stays within the organization.

One element of air safety that has already made big inroads in medicine is reliance on checklists, in large part thanks to Dr. Atul Gawande’s 2009 bestselling book “The Checklist Manifesto.” which we previously noted in this blog.

Classroom discussion questions:

Compare this article to the OM in Action box called “A Hospital Benchmarks Against the Ferrari Racing Team” on page 223 of your Heizer/Render/Munson text.
Now discuss this article in light of the OM box called “Safe Patients, Safe Hospitals” on page 231.

OM in the News: Why Do the Empty Planes Keep Flying?

An Atlanta-to- Baltimore Delta flight on April 20

Many of us are wondering why airlines continue to fly nearly empty airplanes. It seems like they are burning cash, fuel and goodwill. Don’t they know what they’re doing? They do, says The Wall Street Journal (May 7, 2020).

Airlines scrambled in March and April to ground as many trips as they could. But they still found themselves locked into flying many trips with hardly any passengers for a number of OM reasons that show just how complex airline schedules are and how hard the choices are that OM executives must make.

Airlines have grounded 3/4 of their capacity, and it still hasn’t been enough. More than 90% of traffic has disappeared. For American, 99% of flights have been less than 20% full. Besides critical travel for funerals, medical reasons, etc., there are often operational reasons that they need to fly with 2-3 people on board.

A flight might have to go with 2 fliers because a later flight in that plane’s schedule had 60 waiting. Sometimes it isn’t the aircraft that had to get there, but the crew needed somewhere else for later flights. Some aircraft need to get to a maintenance base for overnight routine work. Overnight parking is in short supply at many airports housing grounded planes. So a jet may need to make the last trip of the day with 1-2 passengers just to get to its assigned parking space. And a few passengers might luck out because the plane has a large cargo payload–often medical supplies.

Now a growing concern is that there will be heavier loads on flights where passengers won’t be able to socially distance. Adding to the complexity is a requirement in the federal airline bailout (Cares Act) that requires airlines to maintain service to all the cities they currently serve. Finally, because of the complexity of schedules, airlines need to figure out which aircraft to put in storage while facing uncertainty over travel patterns in the pandemic.

Classroom discussion questions:

List some of the operations issues airlines are now facing.
What percent of your class is willing to fly in the next 4 weeks?

OM in the News: Ergonomics and the “Incredible Shrinking Airline Seat”

Many carriers have been finding ways to put more, smaller seats in cabins.

Spirit Airlines, at least, is honest about the tight quarters on its planes. “We’re a cozy airline,” it says on its website. “We add extra seats to our planes so we can fly with more people. This lowers ticket prices for everyone, just like a car pool.” It’s not news that airlines have been squeezing more — and smaller — seats into the backs of their planes. The people who run revenue departments — want more seats on planes. They’re up against the marketing people, who are trying to act as their passengers’ advocates.

“To accommodate the airlines, seat manufacturers have been skimming and trimming from just about every dimension, relocating the seatback pocket, replacing padding with elastic mesh and whittling down the armrests,” writes The New York Times (Nov. 7, 2017). While low-cost airlines like Spirit have narrowed the distance between rows of seats to as little as 28 inches, most of the big carriers have kept the distance (seat pitch) at 30 inches. Anything less pushes already travelers to their limits.

“We’ve been using a lot of advanced materials, a lot of composite materials, to allow the actual physical structure to get smaller,” said the VP of a seat manufacturer. “We’ve also removed a lot of the hard points in the seat and gone to fabric suspension systems, leading to seats more akin to ergonomic desk chairs. The less size that the seat structure itself takes up, the more space that’s left over for the passenger.” Or, as the case may be, for more passengers.

Airlines contend that improved ergonomics and, in some cases, slightly wider seats make up for a tighter pitch. But passengers have been getting taller and wider, and regulations still stipulate that planes have to be able to be evacuated in just 1.5 minutes. The seats were originally designed for men who averaged 5′ 10″ and 170 pounds. Right now, the average man is just under 200 pounds.

Classroom discussion questions:
1. How is ergonomics an OM issue?

2. Make the case for more space–then for tighter seats.

OM in the News: Boarding Airplanes and Operations Management

Delta is testing new boarding procedures to line people up in an orderly way instead of the pack seen at this boarding gate in Atlanta

One of the thorniest operations management problems in air travel is stumping carriers: How best to board a plane? “Boarding has gotten slower and far more stressful,” writes The Wall Street Journal (March 2, 2017). Airlines are trying to end the mob mentality at boarding gates, where passengers crowd the gate, sometimes pushing and blocking the way for people who have been called to board.

Delta is testing new boarding lanes and monitors in gate areas that bring more order to boarding turbulence and shave 30-60 seconds off a flight. That’s a huge saving for an airline with thousands of flights scheduled daily. “All the studies say the quickest boarding process is just open the door and let ‘em go, and people just pressure one another,” says Delta’s VP. “But it’s not a very good customer experience.” Passengers say airlines created the problem with checked-baggage fees that lead people to carry on more.

The old method of back-to-front boarding by row number was standard for decades but proved slow. Same with boarding passengers in window seats first, then middle, then aisles seats. Random turns out to be a better way to single-file travelers to their seats. Multiple people in the line reach their rows at the same time. But random fell victim to privilege. Multiple levels of elite status get priority. (70-80% of passengers on a flight may have elite status.)

American’s OM staff recently spent time observing Southwest’s boarding system, generally considered fastest. Southwest assigns each passenger a number, then lines everyone up in sequence. Passengers know where and when to stand. They have incentive to move quickly to pick an open seat. “It’s pretty clear Southwest does it best,” says a UNLV expert on planetary systems who got curious about earthbound airplane boarding systems and conducted a study looking for an ideal solution. (His answer: Board 10 passengers at a time in alternating rows.)

Classroom discussion questions:

1.What OM techniques can be used to study this problem?

2. What other suggestions do your students have?

OM in the News: RFID and Luggage Tracking

Radio chips are embedded in the tags being used at Las Vegas' airport ensure that suitcases move more quickly and accurately through the system. — Radio chips are embedded in the tags being used at Las Vegas’ airport ensure that suitcases move more quickly and accurately through the system.

One of my favorite new video cases for this edition is called Alaska Airlines: 20-Minute Baggage Process–Guaranteed! in Chapter 7. This is great example of process analysis and how OM can be applied in a way to improve customer service in the airline industry. And industry-wide, airlines show a steadily decreasing likelihood of bags going astray. Last year had the lowest rate of wayward luggage — 6.5 bags per 1,000 — in the past 12 years. Why?

Various advances in technology and bag-handling procedures deserve credit, including improvements over the years in the bar-coded tags and optical scanners that have long been in use for identifying and sorting checked luggage. Where bar-coded tags fall short is if the tag is wrinkled, smudged or torn, or not in line of sight of the scanner. If the tag is not readable, the bag can get lost without being noticed. Bar code readers have a “read rate” of only 80%- 95% of baggage tags.

“That is why the industry is intent on improving the tracking rate by looking beyond the 30-year-old baggage bar code,” writes The New York Times (Aug.23, 2016). They are adopting RFID tags that do not need to be seen to be read. Embedded chips can store travel information and need to be only close to radio scanners along the way for the bag’s progress to be recorded. Fliers can use travel apps to keep track of their bags. Delta is spending $50 million on the necessary scanners, printers and radio tags, which look little different from conventional bar-code tags. The system is now in place at all of the 344 airports into which Delta flies.

R.F.I.D. technology is hardly new, of course. But updating to the latest technology requires infrastructure changes that can be expensive and disruptive. And because most airports leave it to each airline to handle its own bag-checking system, the technology and procedures vary widely.

Classroom discussion questions:

What are the advantages of RFID over bar codes?
What does Alaska Air do to make sure bags arrive in 20 minutes?

Teaching Tip: Building a p-Chart Using Airline Frequent Flier Award Data

Today’s Wall Street Journal (May 12, 2016) has an article that you can turn into a teaching exercise, on a topic your students will all have opinions about, namely airline travel award redemption. Of the 25 airlines studied, the Journal found a wide discrepancy in ease of booking a coach seat using frequent flyer miles.

Best among the US carriers: Southwest, which had award seats available for 100% of queries, and Jet Blue, which offered seats 92.9% of the time. Among the worst US carriers: American, which did not have seats for 43.6% of requests.

The overall average of 76.6% (which was better than I expected) for the carriers shown can be used as the center line in a p-bar chart. Using Excel, Excel OM, or POM for Windows, your students can compute 3-sigma upper and lower limits and draw conclusions about which carriers are “out of control.”

This should lead to a nice discussion about service quality (Ch.6).

OM in the News: Measures of Airline Quality

As airlines shrink personal space in cabins, they are also finding other ways to aggravate travelers: Flight delays, cancellations, lost baggage and complaints all increased last year. U.S. airlines canceled nearly 66,000 more flights and the percentage of canceled flights jumped to 2.7% from 1.9% the previous year. The number of complaints filed with the DOT shot up 26% last year. Although airlines have been investing in new technology to help boost reliability, the U.S. air transportation is still fragile. A few disruptions triggered airline meltdowns, and old equipment is failing more often under increased passenger loads: Southwest says its baggage belts suffered a lot of breakdowns that left luggage in huge piles. Airlines lost or delayed more than 2.1 million bags, a 17% increase over the same period a year earlier.

In The Wall Street Journal’s annual scorecard of airline service (Jan. 14, 2016), which tracks 7 different key measures of airline performance, Alaska Airlines and Virgin America, perennial good performers, placed at the top of rankings. Alaska has invested in satellite based technology that helps it keep flying in fog and other bad weather. Its customer surveys onboard planes helped reduce complaints, and a 20-minute delivery time guarantee on getting bags to carousels has forced improved baggage handling. (We feature Alaska in our upcoming video case series that is available this spring).

Virgin America credits a generous employee incentive program that offers a 3% bonus for high scores in customer satisfaction surveys, aircraft operations and safety, and on-time performance. United and American occupied the bottom two rungs of the scorecard for the 4th straight year. This month, though, United will be rolling out new software for gate agents to better set the time to close the door to a departing flight. Flight attendants will also get hand-held computers that let them report broken parts inside cabins easily.

Classroom discussion questions:

1. What tools in Chapter 6 can the airlines use to measure and improve quality?

2. Why do you think Alaska and Virgin America rank high so often?

OM in the News: Airlines and the Digital Bag Tag

Airlines are adding new technology to improve and automate how they handle and track bags

“For decades, fliers have checked their bags the same way: hand them to an airline employee and trust that they will reappear at the destination,” writes The Wall Street Journal (July 6, 2015). Now big changes to that model are coming as airlines look to streamline the airport experience—and pass more work to customers and machines.

Their latest ideas including letting fliers tag their own bags, print luggage tags at home and track their bags on smartphones. Later this year, some fliers in Europe likely will begin using what could be the future of flying luggage: permanent bag tags that digitally update if flight plans change. Improved technology and loosened security rules are accelerating changes to baggage handling. More than 1/3 of global airlines now ask fliers to tag their own bags, compared with 13% in 2009. By 2018, 3/4 of carriers intend to offer the service.

Airlines say such technology isn’t intended to reduce staff, but instead free workers to handle customer problems. From 2004 to 2014, a period in which airlines added many self-service technologies like kiosks, the number of U.S. ticket agents fell about 13.5% to 138,000. U.S. airline passengers increased 8.6% to 761 million over that period.

The biggest of the coming changes is permanent bag tags, electronic devices that strap on to frequent fliers’ luggage and digitally display their flight information. The tags display bar codes like a traditional tag, allowing them to work with existing infrastructure. Fliers update the tags via Bluetooth from their smartphones, and the airline can also remotely update the tag if its owner gets rerouted. Air France KLM is also releasing a bag tracker that goes inside luggage. The device uses satellite data to give travelers the bag’s location and light sensors to alert them if the bag is opened en route. Tracking should help reduce the rate of mishandled bags world-wide, though airlines in 2014 lost 7.3 bags per 1,000 fliers, compared with 13.2 bags in 2003.

Classroom discussion questions:

1. Why are airlines encouraging the process change?

2. What is the downside of the new system?

OM in the News: Speeding Up the Airline Boarding Process

“Airlines are trying to save time by speeding up a part of flying that creates delays even before the plane leaves the gate: the boarding process,” writes US News &World Report (June 1, 2015). This summer, Delta plans to preload carry-on bags above passengers’ seats on some flights. Southwest wants to get families seated together more quickly. No perfect boarding method has ever emerged.

Most airlines let first-class and elite customers board first. After that, some fill the rear rows and work toward the front. Others fill window seats and work toward the aisle. Airlines have also tried letting people board early if they do not have carry-on bags. Slow boarding creates delays, which mean missed connections, unhappy customers and extra costs. Researchers figure that every extra minute a plane stands idle at the gate adds $30 in costs. About 1 in 4 U.S. flights runs at least 15 minutes late. With 1,000s of flights each day, costs quickly add up.

Delta’s Early Valet service will offer to have airline employees take carry-on bags at the gate and put them in the bins above assigned seats. The airline wants to see if its own workers can load the bins faster than passengers. The service began Monday on 2 dozen flights, and that number is expected to rise steadily, adding departures from Atlanta, New York, Los Angeles, Detroit, Minneapolis, Salt Lake City and Seattle. Delta tested the process last summer and saw some reduction in boarding time.

Meanwhile, Southwest Airlines wants to reduce complaints that families can’t find seats together because flights are so crowded. Southwest passengers line up at the gate by group — first “A,” then “B” and finally “C” — and pick their seat once they are on the plane. The system lets families board together after the “A” group, but only with children up to 4. Some families pay extra for priority boarding to improve their odds. Southwest recently tested expanding family boarding to include children up to 6, 8 or 11.

Classroom discussion questions:

1. What other processes can airlines use to speed boarding?

2. What process and design techniques in Chapter 7 can be used for this process?

OM in the News: Airlines and the Winter Storms

Workers at Boston's Logan Airport faced a mountain of snow last week — Workers at Boston’s Logan Airport faced a mountain of snow last week

As we discuss in the Global Company Profile on Delta Airlines that opens Chapter 15, airlines have made rapid improvement in storm recovery. Using new tricks, techniques and conservative strategies to position airplanes and employees before storms hit, flights can resume quickly as soon as runways clear. The change is a reaction to stiffer regulations, including stronger rules on pilot rest, and customer outrage on tarmac delays.

New software in use at several big airlines reschedules crews in minutes, sparing dispatchers hours of manual puzzle-solving, reports The Wall Street Journal (Feb.5, 2015). Last week, United got planes back into its Newark, N.J., hub and other Northeast airports on Tuesday night and was back at full strength by Wednesday afternoon, using only 11 reserve pilots. In past storms, that number would have been in the hundreds. The airline keeps 15-18% of its 10,000 pilots on reserve duty to fill in when pilots get sick or delays throw off schedules. United, like other airlines, sometimes ran out of reserve pilots and flights would have to be canceled days later in sunny weather.

United has long used software to reschedule planes, then given dispatchers the task of manually finding available crews. But this time, a new computer program rescheduled pilots sidelined by snow. “That optimization is so beautiful,” says United’s VP. “Last year, we had multiple events where the recovery dragged on for days.”

Airlines say tarmac-delay rules, where the government imposes big penalties on carriers for leaving passengers marooned on grounded airplanes, have forced them to avoid the risk of flying close to the storm. Shutting down early turns out to be better for passengers and airlines. Fewer passengers get stranded at airports because they never start trips or know ahead of time they won’t get home so they avoid the airport. United actually ferried 7 planes empty into Newark Tuesday afternoon so they’d be ready for early-morning departures Wednesday. By 4 p.m. Wednesday Boston was back to normal.

Classroom discussion questions:

1. Why is the airline operations center so critical during weather disruptions?

2. What does optimization software do for the airlines?

OM in the News: Coach Gets More Crowded

“Skinny is all the rage on the runway right now,” writes The Wall Street Journal (Oct. 29, 2014). Delta, United, American, Southwest and other airlines around the world have installed seats with trim metal frames and ultrathin cushions, squeezing rows closer together to pack more people on each flight. Three-quarters of Delta’s domestic fleet and 1/4 of United’s now have the new slim-line seating. The lightweight seats—and even some new, skinnier bathrooms—improve airlines’ bottom line, with less fuel burned per passenger and more tickets sold per flight. (The new seats weigh just 24 pounds per passenger, or 30% less than traditional models). But passengers can feel the pinch: Some complain about stiff padding and knee-knocking issues, and liken flying in the new seat to squeezing next to strangers on a crowded park bench.

Each row of coach seats used to have 32 or 33 inches of space front to back for a seated passenger between seat backs—a measurement called seat pitch. But now many big airlines are down to 31 inches of seat pitch. United goes as tight as 30 inches on some of its Boeing 737s. And it’s going to get worse. Boeing just announced the launch of new, denser seating on 737s called 737 MAX 200, aimed at low-cost airlines. The new MAX 200 version will be fitted with 200 seats. The current version of the same plane typically has 160 seats. Seat pitch on the new version will be as tight as 28 inches.

A survey by TripAdvisor of travelers who had tried the new seats found 83% said they were less comfortable than traditional seats. United, Delta and others say other coach improvements such as video on-demand and Wi-Fi help compensate for tighter seating. “Seats need to be comfortable. But other aspects are important, too, including entertainment, appearance and service,” says Delta.

Classroom discussion questions:

1. From an OM perspective, what are the advantages and disadvantages of the new seats?

2. Why are passengers concerned about the thinner seats?

OM in the News: Designing the Perfect Airline Seat–To Maximize Revenue

Yesterday’s New York Times (Sept. 9, 2014) featured not 1, not 2, but 3 articles on how airlines are addressing the issue of cramped seats! In the 1st, we find that the European budget carrier Ryanair just announced an agreement to purchase up to 200 new Boeing 737s (a $22 billion deal), each of which will allow that airline to squeeze an additional 8 seats into the single-aisle airframe. Ryanair will fit the planes with a whopping 197 seats, stripping out the front and rear galleys to help the redesign.

The 2nd article, titled “In Flight Rage,” confirms that cramped conditions in the back of a plane can severely test passenger equanimity. We have seen this in recent episodes in which pilots have made emergency landings when a few passengers have fought over seat-reclining. One prof, comparing people to livestock, finds that international regulations on flying animals specify the “need space to travel comfortably and on a long journey, the animal must be able to stretch, turn round, drink and groom itself.” Sounds better than a coach seat!

The 3rd piece gets to the heart of the matter–ergonomics, and ties in perfectly to Chapter 10. The real issue, says Prof. Kathleen Robinette at Oklahoma State U., is that airline seats are not designed to fully accommodate the human body in its various shapes and sizes. “We are fighting each other, but the seats are not designed right,” she says. Her study of 4,431 people found that seats are designed for a man in the 95th percentile of measurements. This means 1 in 20 men will be using seats that are too small for them. “That’s about 10 people on every plane, as well as all the people sitting next to them,” she adds. A big flaw in seat design, however, is that men in the 95th percentile are not necessarily larger than women. For about 1 in 4 women, the seat will be too small at the hips. Of even greater concern is the risk of blood clots, including a potentially deadly condition called deep vein thrombosis, which can occur when sitting in a way so you can’t move for about a 1/2 hour.

Classroom discussion questions:

1. What are the OM tradeoffs here?

2. Why is ergonomics an important issue on planes?

OM in the News: The Outsourcing Trend at Airlines

Airline representatives at U.S. airports increasingly aren’t employees of the carriers they represent, reports The Wall Street Journal (July 8, 2014). United Continental Holdings, for example, will soon outsource jobs at 12 airports to vendors who will perform the duties at lower cost. The change impacts 635 workers in areas including check-in, baggage-handling, and customer service. Part of a broader effort by United to cut costs, it reflects how big U.S. airlines are using vendors to handle key jobs at most airports, a trend that can reduce expenses but also risks hurting customer service. American, Delta, and Alaska Airlines are among the carriers that already outsource a large share of this work.

Passengers often don’t realize the check-in agents they deal with at airports don’t work for the airline they are flying. Often, at smaller airports, the same workers may represent multiple competing carriers.

United pays such workers from $12 to $24 an hour, while some vendors start workers at $9 an hour and don’t offer health coverage or travel benefits. Outsourcing the work will save United $1.6 million to $3.5 million per airport a year. “It does make economic sense,” said an industry consultant. “It’s not a $40,000 job to load bags. Cleaning planes is not a $20-an-hour job. But the outsourced work offers no career path, no loyalty. By its nature, it’s temporary, until the next bid comes up.” Indeed, the transition can be bumpy. When Alaska Airlines decided to use Menzies Aviation to handle ramp jobs at its Seattle hub in 2005, the shift was marked by misplaced luggage, late flights and an incident in which a damaged aircraft had to make an emergency landing. But the problems eventually were corrected.

In some cases, airlines are outsourcing airport work to their competitors. United last year turned over 500 jobs to a unit of American Airlines. United has said that as many as 30 more airports may be targeted for outsourcing, based on their higher expenses when benchmarked against competitor airport costs.

Classroom discussion questions:

1. What are the advantages and disadvantages of outsourcing in this industry?

2. Do customers care which system is used?

OM in the News: Southwest Air’s Operations Problems

At Chicago’s Midway Airport on Jan. 2, Southwest Airlines canceled a third of its flights, lost 7,500 bags and, at one point, had 66 aircraft on the ground—about twice as many as the carrier has gates. Passengers were stuck on the tarmac late into the night. A severe snowstorm was the main culprit, but Southwest managers also blamed ramp workers, suggesting that 1/3 of them called in sick to protest slow contract talks. The workers say they are chronically understaffed and are being blamed for executives’ mismanagement.

Maybe Southwest is showing its age–43, writes The Wall Street Journal (April 2, 2014). Once the industry’s brassy upstart, the airline has begun to resemble the rivals it once rebelled against: carriers that were slow-growing, complex and costly to run. As we point out in Figure 2.8 on page 42, to help keep things simple and cost-effective, the airline flies one model of plane— 737—with lean, highly productive employees. Southwest employees do have a more demanding workload compared with others. The airline carries about 3,000 passengers per full-time employee, compared with 1,350 passengers per employee at its bigger rivals. But the average Southwest worker earned nearly $100,000 in 2012– compared with $89,000 at a traditional airlines.

The OM challenges are many. Southwest is flying fuller planes, connecting more passengers and serving bigger airports that are prone to delays. As a result, some of its operational ratings have plummeted. Last year, it lost more bags per passenger than any other carrier. And after years as one of the most punctual airlines, just 72% of Southwest’s flights were on time in the 4th quarter—dead last in the industry. Further, from 2007 through 2012, Southwest’s cost to fly a seat one mile rose 42%—more than any other major U.S. airline. Southwest also faces costly upgrades to its outdated computer systems—a holdover from its simpler days—to bring them in line with industry standards. After snowstorms forced airlines to cancel thousands of flights this winter, other carriers’ computers automatically rebooked many customers. But at Southwest, employees had to manually reschedule each disrupted passenger.

Classroom discussion questions:

1. Referring to Figure 2.8, what is Southwest’s OM strategy?

2. What can Southwest do to improve operational efficiency?