3 ms·

What's the value of the reputation risk of a major, very high profile failure? Sometimes businesses end up on the wrong side of that bet. They see only the cos

by e_y_ 4y ago

What's the value of the reputation risk of a major, very high profile failure? Sometimes businesses end up on the wrong side of that bet. They see only the costs but not the benefits of preparedness (by the time it fails, there will probably be a different CEO in charge) and make a bad call.

mason55 4y ago
Of course, no argument there. Ideally when you make that kind of decision you take reputational risk into account, as well as, like, is this an existential risk? The airline industry feels like one where each year it's a different carrier who has some catastrophic scheduling failure. Today, everyone says they're never flying Southwest again. But if you fly semi-regularly then it won't take very long before you don't have any airlines left to fly on. For people who weren't affected, I doubt very many are even going to remember this. Personally, I remember that this kind of thing has happened recently with other carriers but I couldn't even tell you who. And people who were affected can mostly be bought off if you need to. Some vouchers & hotel reimbursement and it's just the cost of doing business. Plus, the airline industry has proven over and over that people are willing to put up with a lot when you have the cheapest prices. It's different from an industry that's built on reputation and trust. Like, a password manager, the only real thing you're selling is your reputation. Losing trust is a real existential threat. Security costs need to be in the bucket of either "yes, we will do it" or "it's so expensive that if we do it then we don't have a business anyway, so we'll skip it and pray."
- hattmall 4y ago
  Scheduling won't ruin an airlines reputation. Crashing the planes is what ruins an airline. Southwest has only ever had two passenger deaths and one of those was an attempted hijacker beaten to death by other passengers.
  - khuey 4y ago
    Eh, to a first approximation the FAA won't let you crash the planes. It's been 13 years since there was a fatal plane crash on a US passenger airline.
    - variant 4y ago
      FAA has an important role, but market forces won't tolerate an airline that experiences crashes, even rare ones. Airlines are highly incented to be safe, both by regulation and by the market itself.
variant 4y ago
How badly did SWA's past high profile failures affect them? I'd say not so very much. Yes, some short term damage, but we're talking about an industry where no one stands out from a quality perspective. Everyone is seen as some degree of bad, much like big ISP's. People are used to rotating between airlines and, while those affected this round may shift away, others will get frustrated with their preferred carrier and rotate to Southwest. I think reputation impacts in this industry from anything other than crashes don't hold much staying power. I'm actually quite tempted to buy the SWA dip...

by e_y_ 4y ago

mason55 4y ago

Of course, no argument there. Ideally when you make that kind of decision you take reputational risk into account, as well as, like, is this an existential risk? The airline industry feels like one where each year it's a different carrier who has some catastrophic scheduling failure. Today, everyone says they're never flying Southwest again. But if you fly semi-regularly then it won't take very long before you don't have any airlines left to fly on. For people who weren't affected, I doubt very many are even going to remember this. Personally, I remember that this kind of thing has happened recently with other carriers but I couldn't even tell you who. And people who were affected can mostly be bought off if you need to. Some vouchers & hotel reimbursement and it's just the cost of doing business. Plus, the airline industry has proven over and over that people are willing to put up with a lot when you have the cheapest prices. It's different from an industry that's built on reputation and trust. Like, a password manager, the only real thing you're selling is your reputation. Losing trust is a real existential threat. Security costs need to be in the bucket of either "yes, we will do it" or "it's so expensive that if we do it then we don't have a business anyway, so we'll skip it and pray."

hattmall 4y ago
Scheduling won't ruin an airlines reputation. Crashing the planes is what ruins an airline. Southwest has only ever had two passenger deaths and one of those was an attempted hijacker beaten to death by other passengers.
- khuey 4y ago
  Eh, to a first approximation the FAA won't let you crash the planes. It's been 13 years since there was a fatal plane crash on a US passenger airline.
  - variant 4y ago
    FAA has an important role, but market forces won't tolerate an airline that experiences crashes, even rare ones. Airlines are highly incented to be safe, both by regulation and by the market itself.

variant 4y ago

How badly did SWA's past high profile failures affect them? I'd say not so very much. Yes, some short term damage, but we're talking about an industry where no one stands out from a quality perspective. Everyone is seen as some degree of bad, much like big ISP's. People are used to rotating between airlines and, while those affected this round may shift away, others will get frustrated with their preferred carrier and rotate to Southwest. I think reputation impacts in this industry from anything other than crashes don't hold much staying power. I'm actually quite tempted to buy the SWA dip...