Southwest Airlines (LUV) Facing Challenges of its Success

In an uncharacteristic manner, Southwest Airlines (NYSE:LUV) has been facing challenges concerning quality they've rarely had to face in the past, as increased business and the promise of flying free with bags are weighing on the company.

Bags still fly for free on Southwest Airlines, but travelers are paying a price in other ways.

They're encountering more lapses in Southwest's hallmark on-time performance as the carrier departs from what once was its core principles of avoiding congested airports and shunning hub-and-spoke complexity in favor of getting passengers to their destinations on a single aircraft.

Revenue soared as Southwest added business destinations such as New York's LaGuardia Airport and connecting flights at Chicago's Midway Airport. But as it struggles to cope with increasing numbers of passengers and bags, Southwest risks tarnishing the reliability it has touted since the 1970s.

The problems are so acute at Midway, Southwest's largest hub, that CEO Gary Kelly is dispatching a team of 10 station managers from other airports to get to the bottom of the bottlenecks next week.

Southwest closed Friday at $11.80, up $0.02, or 0.17 percent.




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