What Happened With Southwest's Revenue Management System?
The airline's COO explains in an interview. Also: why has Southwest joined Google Flights?
Dear readers,
I have always liked Southwest COO Andrew Watterson because he is willing to explain — sometimes in great detail — why things didn't go as planned, such as Southwest's second quarter revenue guidance miss, an error the airline blamed on "complexities in adapting its revenue management to current booking patterns." Last month, I wrote that I was surprised by this regulatory filing comment, as Southwest had bragged about the new Amadeus revenue management system it installed last year, so when Watterson and I spoke last week, I asked: how'd the forecast go so wrong?
"We ended up, between man and machine, taking too many lower fare bookings than we expected, and that got us in a bad spot," Watterson said.