
#35 William Swelbar: How Airlines Became the Ultimate OR Playground
Make better business decisions with data and AI—subscribe to The Decision Intelligence Lab Newsletter at https://decisionintelligencelab.substack.com/. Airline veteran William Swelbar joins Vijay Mehrotra and Mike Watson for a tour through nearly 50 years of airline economics(from 1978 deregulation to today's premiumization era). William Swelbar's path is one of a kind: flight attendant at North Central in 1979, local union president in Detroit within a few years, and part of a 1982 employee coalition that had all but raised the $400 million it needed in a bid to buy Republic Airlines. The conversation digs into the analytics behind the industry: why hub-and-spoke networks turn 10 routes into 230 sellable city pairs, how Pan Am's $99 cabin became an early pricing wake-up call, why "capacity is a bad drug," and how Delta and United decommoditized flying through cabin segmentation, basic economy, and credit card revenue - while the end of labor arbitrage killed the low-cost carrier era. Timestamps 0:00 - Preview 0:44 - Vijay's Caddy Master Turned Airline Veteran 5:10 - What deregulation actually changed 8:00 - The overnight flood of new entrants 9:30 - Pan Am's $99 cabin and ~120 bankruptcies 11:43 - The fall of TWA and Pan Am; American's innovations 14:23 - Network design: Hub-and-spoke vs. point-to-point 16:32 - Southwest and the Southwest Effect 19:40 - High-speed rail: too late for the US? 22:15 - Capacity is a "bad drug" 25:15 - How Delta and United segmented the cabins & won during COVID 29:05 - Airfares never covered the cost of flying 30:45 - Basic economy as a weapon against Spirit and Frontier 33:50 - The end of the value airline sector 36:55 - Wrap-up Follow the show Apple: https://podcasts.apple.com/in/podcast/the-decision-intelligence-lab/id1811085064 Spotify: https://open.spotify.com/show/0lFoAVKqJHTYSZNpeN61ou?si=0ae973aab0174b3b Connect with guest William Swelbar: https://swelbar.substack.com/ Connect with hosts - Prof. Vijay Mehrotra (University of San Francisco): https://www.linkedin.com/in/vijay-mehrotra-ba9498/ - Prof. Michael Watson (Northwestern University): https://www.linkedin.com/in/michael-watson-07600a1 About the podcast The Decision Intelligence Lab podcast delivers real-world insights for data professionals, business leaders, and anyone seeking to leverage data & AI for smarter decision-making & successful business outcomes. For business inquiries, email at decisionintelligencepodcast@gmail.com