Well, actually, the one thing that is certain about Southwest Airlines is that it continues to surprise everyone on a regular basis.  Almost always in a positive way. 

It wasn’t that long ago that quite a few people were very critical of Southwest and its CEO, Gary Kelly, for not being a lemming and following industry trends such as charging checked luggage, changing a ticket or even beverages.   Indeed, I’ve seen a number of posts on various airline websites offering glum predictions for both Southwest and Mr. Kelly.   It has grown a bit quiet in the past month, though.

Bucking trends and doing it their way is Southwest’s model.  It’s worked for them throughout the history of the company and while, yes, it is true that they’ve made a few mistakes here and there, they’ve also seen great success year in and year out.   By sticking to their plan for attracting customers on the basis of offering their base product at a great value and with no extra charges, they seem to be gaining quite a bit of steam.   The Associated Press is reporting that Southwest has announced a significant uptick in traffic and revenues for the last month.  Again.

Throughout the first part of the year and even through the summer, pundits and financial analysts have hammered Southwest for sticking to its strategy and Mr. Kelly has steadfastly reaffirmed that they’ll be sticking to their plan and that they are starting to see positive results from that plan.  I think those results are in and this is good for Southwest for a few reasons.

First and foremost, that uptick in traffic has to contain quite a few new customers for Southwest.  Customers that have either never tried Southwest or who tried it so long ago that they are, for all intents, new customers.  And I suspect people are discovering that it isn’t your father’s Southwest Airlines from the 70’s and 80’s and it is a great value for all kinds of travelers.   For the customer looking for a reliable airline with a good record of both safety and on-time arrivals a swell as a convenient schedule, Southwest is an excellent answer.  They’ve got good, new aircraft with comfortable seats (still some of the most comfortable in my opinion) with friendly staff.  That’s what people want. 

It’s good for Gary Kelly too.  He’s coming into his own as the leader of Southwest and, to his credit, he has shown little inclination to engage in change for change’s sake and he’s demonstrated quiet confidence both in himself and the direction of his company.  I have no doubt that he’s earning even greater respect from his employees as well as his shareholders.

Sure, Southwest has made a few mistakes.  Most notably their fuel hedges have been a liability a few times in the past 18 months and, of course, there was that little Frontier Airlines fiasco last summer.  One thing that bothered me about their attempt to win Frontier Airlines was that it was *too* much of an amateur performance for the Southwest executive team.   That team is not a bunch of huckleberries.  They are a very saavy group of managers that would be an enormous credit to any airline in the world.  In hindsight, I wonder if the Frontier purchase attempt wasn’t just an attempt to get a great bargain with the approach of “it isn’t a deal if it isn’t a deal”.   Certainly you didn’t see Southwest walking away hurt or pouting.  Instead, they continued on with their business and never looked back.

One minor prediction:  I would be wholly unsurprised to learn that Southwest either adjusts or deletes their new priority boarding option.  Overwhelming conclusions to date are that it doesn’t really net you all that much advantage with the way it is presently structured.   I suspect a fee change (lower) or a rules change may come along after another 6 to 12 months of it being deployed.

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