Imagine this: It’s Christmas Eve. You’ve worked hard all week, waiting until your PTO kicks in to fly back east for the holidays. You finally pack a suitcase, gifts in tow, and head to the airport, bracing for a week of fending off thinly veiled political antagonisms from an older relative. You figure you’ll grab a sandwich once you get to your gate, spend a few hours in the air listening to podcasts (may I suggest this one?), and land later this evening. 

You check your bags full of gifts and journey onward to the security line, full of cautious optimism for the days ahead. Upon getting through TSA, your phone vibrates. What’s that? Your flight’s been delayed for an hour? Ugh. Maybe you’ll grab a beer, too. 

Another hour passes, and the delayed departure time continues to crawl forward. The familiar dread sinks into your stomach amongst the remnants of your airport Quiznos sub and $12 Bud Light. 

And then, after what feels like days, your flight is…canceled. 

You stand in line for 45 minutes to speak with a gate agent about being rebooked with the rest of your stranded cohort, and you finally breach the front of the line around the same time you should’ve been landing at your destination, a fact that makes you regret ever having been born. 

You’re informed they can’t get you out until next Thursday. But it’s Friday, you insist, assuming there’s been a mistake. The gate agent smiles weakly at you, and you know it’s game over. You’re offered a $100 flight credit and a smack on the ass for your trouble. As you exit the terminal, you’re stopped by an employee wearing an airline-branded Santa hat: “Can we interest you in a credit card? Get 40,000 bonus miles for signing up!”

Every problem that occupied your brain four hours earlier (“Did I remember to download the latest episode of White Lotus?”) taunts you, dwarfed by the scale of the logistical nightmare that’s just been foisted upon you by the kind folks at the airline—your belongings (and the gifts for your family, whom you’re no longer going to see this Christmas) are rattling around somewhere in the bowels of the airport, and you have no option but to take a surge-price Uber back home to slump into your couch alone and wallow in the self-pity that is being utterly boned by modern air travel. You paid $463 (plus the cost to return home with your tail between your legs) for the pleasure of spending Christmas alone. 

A meltdown so epic it instigated a federal investigation?

Southwest Airlines canceled an unprecedented number of flights due to a systemwide failure over the holidays: more than 16,700 between December 21-31. 

When a winter storm disrupted its crew scheduling system, the entire thing effectively imploded. Running an airline is an unbelievably complex dance of data, personnel, and machinery, and Southwest’s systems were outdated and unable to handle the volume of change following a major weather incident. A domino effect clusterfuck ensued, and hundreds of thousands of people were likely affected.

These types of technology outages are not new for the airline, but an outage at this scale certainly was. When I worked at Southwest in 2016, there was a meltdown in the summertime when the whole system just…shut off. Everything from our website to the computers at the gates that allow agents to scan boarding passes went dark simultaneously, as if someone had unplugged a machine and forgotten to plug it back in. Eerily, even the power at headquarters went out. For days, customers were stranded throughout the system because the technology on which the airline’s operations relied just went intermittently kaput.

In the days following the big holiday shitstorm of 2022, a pilot named Larry Lonero, with 35 years of service to the company, shared a lengthy post on Facebook detailing “what went wrong.” I was initially skeptical about whether or not his sentiments were widely held by other long-time employees, but SWAPA—the pilots’ union, Southwest Airlines Pilots Association—reposted the full accounting to its Facebook page, too.

Lonero wrote:

“Unfortunately, the frontline employees have been watching this meltdown coming like a slow motion train wreck for some time. And we’ve been begging our leadership to make much needed changes in order to avoid it. What happened yesterday started two decades ago.” 

He went on to celebrate the late Southwest founder and CEO, Herb Kelleher, a very “operationally oriented” leader, who spent a lot of time on the front lines with his employees. This is in stark contrast to his depiction of Herb’s successor, Gary Kelly, who spent his pre-CEO career in accounting and finance and was—by Larry’s telling—a CEO focused on “Return on Investment, stock buybacks and Wall Street.” 

“A half dozen small scale meltdowns occurred during the mid to late 2010s. With each mini meltdown, Leadership continued to ignore the pleas and warnings of the employees in the trenches. We were still operating with 1990s technology. We didn’t have the tools we needed on the line to operate the sophisticated and large airline we had become. We could see that the wheels were about ready to fall off the bus. But no one in leadership would heed our pleas,” he wrote, and “two decades of neglect takes several years to overcome.”

To offer another perspective that may muddy the neat-and-tidy narrative here, the corporate side of Southwest (the non-unionized, non-customer-facing, non-operational employees like me who did stuff like improve the app and sit in meetings) loved Gary Kelly. He was an (almost) universally well-respected and admired leader who was known for flying in the dreaded middle seat when he traveled for business. I was once friends with an intern who sat near him on a flight, and when the person next to him asked Gary what he did for a living, he replied, “I work for Southwest Airlines.” (This is the CEO of a Fortune 500 company! Flying middle seat in economy!)

All that to say, Gary Kelly is not exactly the picture of corporate greed and excess—though Larry’s explanation, of a massive underfunding of technology and an overemphasis on shareholder returns, is probably true—and, unfortunately, quite common in public US companies today.

The Southwest debacle highlights what’s self-defeating about American capitalism right now, and it’s endemic to the larger American economic experience

A large public company putting Wall Street before its employees and customers? Color me shocked! 

Companies in the S&P 500 spent $1.5 trillion on stock buybacks and dividend payments in 2022. As an NYU finance professor told the New York Times (emphasis mine), “Returning cash to investors is a good thing, if the company doesn’t have a better use for it. It’s a bad thing if it’s done in a way that destroys shareholder value. It’s all in the numbers.”

And while this debacle was merely expensive and inconvenient for those wrapped up in it, an obsession with Wall Street can be deadly. In 2018 and 2019, two Boeing 737 MAX jets crashed, claiming the lives of 346 people. An investigation into the way Boeing developed its new airliner revealed a stunning example of regulatory capture: The FAA had effectively left Boeing to certify the plane for flying readiness themselves.

David Gelles wrote for the New York Times,

“As an avalanche of investigations and reporting over the past 20 months made clear, the true cause of the crashes wasn’t faulty software. It was a corporate culture gone horribly wrong.

‘The Boeing Company for a good part of a century was the foremost and best airplane manufacturer in the world, but they got infected,’ Representative Peter DeFazio, chairman of the House transportation committee, which led an investigation into the crashes, told me. ‘They started watching Wall Street. They started tying executive bonuses to stock performance. It was greedy executives doing shortsighted things to pad their pockets.’”

The overzealous financialization of the world around us has been creating perverse incentives and worse outcomes for all but a select few at the top for decades, in every industry from air travel to housing to health insurance (because yes, the human need for shelter and medical attention are big business, baby!).  

Perhaps even more tantalizing, air travel more generally serves as a useful allegory for the American economic experience (I recommend reading the entirety of the linked Haley Nahman piece, as it’s hilarious—she calls the TSA “Bush-era security theater,” which made me audibly snort).  

Think about it: You are literally, physically separated and situated onboard based on how much money you can shell out for a ticket (up first is First or Business Class, followed by the middle section, with some dubious euphemism for a name like “Comfort Plus” or “Economy Extra,” which mostly amounts to an extra half-inch of seat pitch, and then the rest of the herd packed together like “slaughter-bound cattle” in the back). You board “front to back,” which “makes sense for wiping, and little else,” but appeases those with more expensive seats, Nahman notes.

It’s worth clarifying that Southwest doesn’t have “First Class” or “Economy”—they have a single-class cabin wherein everyone’s (mostly) equal, which flies in the face of the arrangement described above. In fact, back in the day, Southwest was the airline that “democratized the skies”—before Southwest, only 15% of Americans had ever flown on an airplane because it was so cost-prohibitive. Again, this is not a company that’s historically known for the classic follies of “corporate greed,” which is why its holiday meltdown was so surprising. It goes to show just how pervasive this stage of shareholder-first capitalism really is.

Maybe this is what happens when every big company is actually just a bank that happens to do something else

I worked for Southwest for four years, and I feel genuinely warm and fuzzy toward the company—though I’m reminded of a few jokes with my coworkers that now strike me a little differently through the retrospective lens of Larry Lonero’s sentiments. 

When I worked in the Southwest marketing department in 2019, we used to kid (I promise, we were kidding) that we should stop flying planes and just issue credit cards, because the Southwest credit cards were a far more profitable line of business than air travel itself. This process is known as “co-branding,” and every major player has a bank partner with which they offer such a product, because they’re so profitable (and mostly a win-win for customers, who can earn points to fly or stay for free). 

American Airlines and CitiBank first introduced the arrangement at the national level in 1987. For every dollar you spent on your co-branded credit card (regardless of vendor), you’d earn one American Airlines point, redeemable for a free ride in the flying tin can after you accumulated approximately a zillion of them. 

After the industry got bailed out (again) in 2020, this trope became more widely known outside the industry, too; this YouTube video with more than 4 million views explains “how airlines quietly became banks.” The public was in the dark about just how valuable airline loyalty programs were, until those airlines had to assign a value to them in order to justify their request for multibillion-dollar loans from the federal government during the pandemic. 

Notably, the loyalty programs were sometimes 2x–3x more valuable than the companies’ entire market capitalizations—in American Airlines’s case, it estimated its loyalty program, AAdvantage, to be worth $25.5 billion (the company’s market cap was only $6 billion at the time).

As one YouTube commenter put it: “I love to live in a normal economic system in which every major company providing essential services turns into a bank, a police force, a lobbying business or a subcontracting pyramid scheme.” All together now!

What do we do when something miraculous starts to feel like a dysfunctional, overly securitized hellscape?

The inescapable truth is that modern air travel is nothing short of miraculous. You can go from your couch to basically anywhere in the entire world in under a day, in most cases, and in one of the safest modes of transportation ever invented. 

In that sense, complaining about any air travel experience wherein you landed safely at your destination feels like a Veruca Salt-inspired temper tantrum. You’re flying in a metal tube 30,000 feet above the planet at 600 miles per hour, only to be gently landed in your city of choice a few hours later, and you’re bitching that someone took their shoes off?! I can hear my great grandparents now: Get a grip, assholes! 

But this particular air travel nightmare encapsulates just how broken and chaotic things can become when the world becomes too financialized; too securitized; too singularly focused on what a stock price does, at the expense of the underlying business. Stock buybacks appear to be the most pertinent and least productive use of capital.

We undermine our miraculous, unbelievable innovations when we make them play second fiddle to Wall Street expectations (and we make the experience a lot worse for everyone else in the process). As a paper from the Harvard Department of Economics argues compellingly: Market value is “too narrow” a measure of shareholder welfare.

I’m fairly confident that the compilation of airlines’ worst hits for customers (Basic Economy, charging extra for checked bags, cancellation fees, $19 onboard “charcuterie boxes” that consist of a “twig of two grapes,” per Nahman’s experience) were a response to shareholders and investors alike insisting on squeezing more blood out of each ticket. 

And thus, the air travel <> real life allegory is complete

By pretty much all measures, the world is more miraculous than it’s ever been. We live in an amazing time, as evidenced by the fact that you’re probably reading this on your pocket-sized supercomputer that has 100,000x more computing power than the Apollo 11. 

And yet! Much like air travel, the world often does not feel miraculous at all. Rising income inequality, the unaffordability of housing, mounting consumer and education debt, inflation at a 40-year high…no, things sure don’t feel remarkable at all. 

Sometimes it feels like we’re all stuck in the profit-maximizing doom loop of the metaphoric overcrowded terminal. We’re glutted on a $50 airport dinner devoid of nutritional value and packed with preservatives that’ll probably give us the runs. We’re a captive audience to some guy in a suit shouting obscenities into his AirPods Pro during a look-at-how-important-I-am public phone conversation, three hours deep in a maintenance delay. 

And we—much like weary air travelers—usually take to Twitter, our town square, to complain about it to nobody in particular. Like Nahman says in her piece, air travel and the rest of the economy are similar in that we’ve become accustomed to paying for “human rights repackaged as luxuries.” She astutely notes that the only person on whom you can take out your frustration is some low-level employee with no decision-making power—because the person who’s actually in charge is shielded from the human costs of their own greed in some boardroom with floor-to-ceiling windows and a catered lunch, far above the fray.

And not to be too on-the-nose, but these are often the very same people who have so much money or access that they’re able to fly private, never subjecting themselves to the indignity of a general boarding call anyway. 

Capitalism eating itself?

A world in which ~return on investment~ is the most important thing is not a world that’s conducive to game-changing innovation. As the Southwest meltdown demonstrated, it’s also not conducive to the masses having a very good experience. 

Much like it makes little sense for an airline to stop flying planes in order to direct all resources to marketing a credit card, it also makes little sense for a company to stop focusing on its core business to direct all its resources to manipulating a share price. 

Per William Lazonick, Mustafa Erdem Sakinç, and Matt Hopkins for the Harvard Business Review (emphasis mine): 

“In 2018, only 43% of companies in the S&P 500 Index recorded any R&D expenses…whether or not a firm spends on R&D, all companies have to invest broadly and deeply in the productive capabilities of their employees in order to remain competitive in global markets. Stock buybacks made as open-market repurchases make no contribution to the productive capabilities of the firm. Indeed, these distributions to shareholders, which generally come on top of dividends, disrupt the growth dynamic that links the productivity and pay of the labor force. The results are increased income inequity, employment instability, and anemic productivity.”

Lazonick, Sakinç, and Hopkins clarify: Stock buybacks are not good for shareholders. They are good for share sellers: 

“With the majority of their compensation coming from stock options and stock awards, senior corporate executives have used open-market repurchases to manipulate their companies’ stock prices to their own benefit and that of others who are in the business of timing the buying and selling of publicly listed shares. Buybacks enrich these opportunistic share sellers — investment bankers and hedge-fund managers as well as senior corporate executives — at the expense of employees, as well as continuing shareholders.” 

Some economists argue that ending stock buybacks as a practice is how we save the economy (a tall order!). But regardless, it’s self-defeating to focus on shareholder (or, perhaps, shareseller) value at the expense of the shareholders as humans, whom such decisions affect.

After all, your shares of $LUV stock didn’t keep you company during your Christmas spent alone. 

Had Orville and Wilbur had Wall Street breathing down their necks at Kitty Hawk, you probably would’ve been driving to Grandma’s this Christmas. But hey, maybe then you could’ve avoided the whole mess anyway!