...ORGANIZATIONAL ANALYSIS It is evident that the greatest strength that Southwest Airlines has is its financial stability. As known in the US airline industry, Southwest is one of those airlines who are consistently earning profits despite the problems the industry is facing. With such stability, the corporation is able to make decisions and adjust policies, which other heavily burdened airlines may not be able to imitate. Having a low amount of cost in their operations is one of the contributing factors in Southwest Airlines’ financial success. Such low cost model of the corporation is brought about by an effective strategy. Southwest uses only one type of aircraft – the fuel-efficient Boeing 737. This tactic keeps training and maintenance costs down. Moreover, the no-frills approach to customer service contributed to the low cost of operations for Southwest. The airline does not serve meals on board, and there are no luxurious or first class seats offered. Services like these have been seen by the airline as unnecessary for an airline that provides a short-haul trip from city to city. By these, Southwest were able to offer low price tickets to customers, which was good for the company because most people would prefer to fly without those services mentioned if it meant for cheaper ticket price. Even though Southwest offers no-frills, there is still a high degree of customer satisfaction that continuously builds customer loyalty for the company. As mentioned, Southwest offers low...
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...Southwest Airlines Co. Analysis * Introduction and Mission Southwest Airlines Co. is a major U.S airline and the world's largest low-cost carrier. It was established in 1967 and adopted its current name in 1971. The airline operates more than 3,400 flights per day and has more than 46,000 employees as of August 2012. In 2013, Southwest Airlines has scheduled service to 84 destinations in 41 states and Puerto Rico. In 2012, Southwest Airlines was the market share leader in domestic air travel in the United States; it transported more passengers from U.S airports to U.S destinations than any other airline, and it offered more regularly scheduled domestic flights than any other airlines. For the 40th consecutive year, the Company was profitable, earning $421 million in net income. The mission of Southwest Airlines is dedication to the highest quality of Customer Service delivered with a sense of warmth, friendliness, individual pride, and Company Spirit. The mission statement has always regulated the way the company conducts their business. The company mission statement also highlights their desire to serve customers better and it provides them with direction when they have to make certain service-related decisions. The company mission statement is also another way of saying, "We always try to do the right thing!" According to the U.S. Department of Transportation, Southwest Airlines has the best cumulative consumer satisfaction record. * Market Share These three...
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...Economic Analysis of Southwest Airlines Facilitator: James Young MGT: 513 Managerial Economics October 14,2012 Economic Analysis of Southwest Airlines History of Southwest Airlines History and Key Defining Moments Southwest Airlines was founded in 1966 when a group of Texas investors pooled together 560,000 to form the Air Southwest Company, incorporated in 1967 the company was envisioned as a commuter airline serving the cities of Texas, Dallas, Houston and San Antonio. Although the Texas Aeronautics Commission (TAC), the body responsible for overseeing aviation within the state granted the company permission to fly the routes requested in February 1968, three competing airlines filed suits to prevent the airlines form getting off the ground. An attorney, who stake in the company was a mere 20,000, took the case all the way to the U.S. Supreme court and in December 1970 this court ruled in the favor of Air Southwest. Early in 1971, Air Southwest changed its name to Southwest Airlines, the fledgling airline began operations on June 18, 1971 under the stewardship of President M. Lamar Muse, the airline offered six daily roundtrip flights between Dallas and San Antonio, and twelve daily roundtrip flights between Dallas and Houston. The start of service in June 1971 was accomplished with three 737-200 aircrafts that had been obtained from Boeing on favorable terms, and a fourth aircraft was obtained in September of 1971. The rest of 1971 and 1972 saw operating...
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...Introduction to Southwest Airlines 3 1.1 Overview 3 1.1.1 History 3 1.1.2 Southwest Airlines’ offerings 4 1.2 Reasons for choosing Southwest Airlines as a case study on HR practices 5 2 Literature review 5 2.1 HR strategies 5 2.2 Training and development 7 2.3 Compensation 8 2.3.1 Financial compensation 8 2.3.2 Non-financial compensation 10 3 Human resource practices in Southwest Airlines 11 3.1 Human resource strategies in Southwest Airlines 11 3.1.1 Southwest Airlines Strategies 11 3.1.2 Role of HR Strategies in implementing Southwest Airlines’ strategies 12 3.1.3 Southwest Airlines human resources strategies and tactics 14 3.2 Training and development in Southwest Airlines 20 3.2.1 Southwest offer the employees the freedom to learn and grow 20 3.2.2 Safety and security training and outreach 21 3.2.3 Environmental and sustainability training 22 3.2.4 Diversity and inclusion education and outreach 23 3.2.5 University for people - leadership 23 3.3 Southwest Airlines’ Compensation and Benefits for People 27 3.3.1 The Freedom to Travel 28 3.3.2 The Freedom to create Financial Security 29 3.3.3 The Freedom to pursue Great Health 30 3.3.4 The Freedom to Learn and Grow 32 3.3.5 The Freedom to Work and Have Fun 33 3.3.6 Employee Recognition Programs 34 3.3.7 Distributed Leadership 35 CONCLUSION 37 REFERENCE 38 Introduction to Southwest Airlines Overview History Southwest Air was founded...
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...4315*2 Team 4 Strategic Profile and Case Analysis Purpose In the airline industry competitors have to work hard to maintain market share and even more to increase their share. Southwest Airlines has become the market share leader in terms of passengers carried with the simple strategy: “low-cost/low-price/no-frills.” They have done an excellent job in implementing and executing their strategy elements. Some of the most crucial executions in the Southwest strategy are their point-to-point scheduling of flights, customer service and customer satisfaction, and appreciation of employee involvement for continuous company improvement. Although many other airlines can implement the same strategic elements as Southwest has, they would still be behind the times since Southwest has been working efficiently from inception. Throughout this analysis of their performance, one may conform his or her own opinion on how to grade Southwest with the information provided. Alternative strategic suggestions will be evaluated with a preferred alternative choice that could improve the Southwest image and performance. Situation Analysis General Environmental Analysis Until the Airline Deregulation Act of 1978, the government had control over airline fares, routes, and market entry. But since Southwest's initial plan was to fly only intrastate routes, they did not have to come under the regulation of the Civil Aeronautics Board. Southwest did, however, encounter some legal and regulatory...
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...SUMMARY Southwest Airlines provides short haul, high frequency, point-to-point, low-fare services to and from 58 cities across the United States. The company is known for its low-cost fares and superior customer service in the airline industry. The company was started in 1971 with a motto still lived by today, "If you get your passengers to their destinations when they want to get there, on time, at the lowest possible fares, and make darn sure they have a good time doing it, people will fly your airline." This motto has been effective for the company because they recently reported their 58th straight quarterly profit. SWOT Analysis The SWOT analysis describes the internal strengths and weaknesses, opportunities and threats of a company. The strengths of Southwest include its market leadership, its low-cost business model, and its strong financial performance. Weaknesses are the poor short-term liquidity situation, having only one established alliance, and the declining passenger revenue yields. Opportunities for the company include its new services, the new code-sharing agreement with ATA Airlines, and the overall positive outlook for the airline industry. Threats to Southwest include the increasing jet fuel costs, uncertainty in demand, and an increase in competition. Corporate and Business-level Strategies Southwest's corporate level is to focus on obtaining more of the low-fare market of the airline industry rather than to enter into other aspects of the airline industry...
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...Summary Corporate Culture & Southwest Airline Case Analysis CORPORATE CULTURE Corporate culture is an incredibly powerful factor in a company’s long-term success. No matter how good your strategy is, when it comes down to it, people always make the difference. Corporate Culture * Is the meshing of shared values, beliefs, business principles, and traditions that imbues a firm’s operating style, behavioral norms, ingrained attitudes, and work atmosphere. * Is important because it influences the firm’s actions and approaches to conducting business Corporate culture refers to the shared values, ingrained attitudes, core beliefs and company traditions that determine norms of behavior, accepted work practices, and styles of operating. How was a corporate culture developed and nurtured in your organization? A company’s culture is grounded in and shaped by its core values and ethical standards. I am working at PT. Tempo Scan Pacific, Tbk. and known as Tempo Group. Tempo Group has a “Corporate Culture” implemented in the 5 core values : 1. Honesty 2. Equality 3. Usefulness 4. Responsibility 5. Perseverance Here are a few ways my organization can facilitate the creation of a nurturing the culture : * Communications: This allows information and ideas to flow up from entry-level ranks to the top management of the company, but information from upper management is also shared more readily with the entire company. Always communicate...
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...commercial airline industry started in 1978 when President Carter signed the Airline Deregulation Act. Before deregulation, airlines were under the strict rules of the Civil Aeronautics Board that governed all aspects of the airline industry. This included the regulations of fares, rates of return, routes, and mergers. Plus, there was no price competition and a very limited number of carriers. After October 1978, fares fell dramatically and new companies began to enter the market. There were several difficulties in the subsequent years contributing to the early 1980’s recession and within the first ten years 150 carriers went bankrupt. The three largest airlines that remained ended up having 80% of the United States air traffic. The market rebounded in the mid-1990’s when the demand for airlines was greater than the supply which resulted in continued entrance in the market and continued failure. In recent years, the industry has gotten more condensed as companies begin to acquire each other. Price competition is still a major part of the industry as well as the struggle for lowering fixed cost to raise profit margins. The airline industry is not attractive to compete in because of its mature state in the product life cycle. The projected growth rate of the airline industry is small because it has become so well developed. Competition is also very fierce in the airline industry, especially after the Airline Deregulation Act created price wars. This same reason is why the airline industry...
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...An Investment Analysis of Southwest Airlines for Embry Investment Group Kenneth O’Connor Embry-Riddle Aeronautical University, Worldwide Table of Contents Tables and Figures 3 Abstract 3 Introduction 3 Why this Analysis was Done 3 The Limitations of this Report 4 Background Information on Southwest Airlines 4 Analysis Methodology 4 Short Conclusion 5 Supporting details and data 5 The Financial Reasons to Invest in Southwest Airlines 5 An Assessment of Southwest Airlines Past Performance 5 2013 Financial Statistics 6 An Assessment of Southwest Airlines Future Performance 7 The Numbers 7 The Logical Reasons to Invest in Southwest Airlines 8 Aircrew 8 Ground crew 8 Aircraft maintenance 9 Business administration 9 A short Timeline of Southwest’s Fleets Major Upgrades 10 Conclusion 12 Glossary 13 Appendix A 14 Detailed Graph Creation 14 Appendix B 15 Additional Information on Southwest Airlines and AirTran Airways 15 Southwest Airlines' Recognitions 15 Appendix C 17 About Red Rock Biofuels 17 Appendix D 18 The stock price data from my father 18 References 19 Tables and Figures Figure 1. 9 Year Closing Price $ 5 Figure 2. 1 Year Closing Price $ 6 Figure 3. Southwest and AirTran destinations 15 Abstract Dallas-based Southwest Airlines is in their 44th year of service, and with 41 consecutive years of profitability, they continue to be one of the most admired airlines in the world. This...
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...An Analysis of “Southwest Airlines: We Love Your Bags” I visited the Southwest Airlines website and clicked on the “Our Culture “ tab. On this page, Southwest has culture defined as such: Cul’ture: the development, improvement, and refinement of the originality, individuality, identity, and personality of a given people (“Culture”, 2012). Southwest Airlines has stood out from the rest of the airlines even before I ever read a case study on the company and its business model. Although I have never flown on a Southwest Airline airplane, the difference can be seen just by walking through an airport that they service. The people look more relaxed, happier, and dedicated to their jobs. The company has capitalized by tailoring their culture to fit their customers and their employees versus tailoring their culture to adapt to the market/environment of the airline business. While they may not be the fanciest company in the airport, the friendly service is seen wherever you see their logo. It is an airline designed for the individuals looking for great value and dependability. When you look at the mission statement for Southwest, it is evident that they are committed to its employees. In a Knowledge@Wharton article, Colleen Barrett was quoted as saying ”Our mission statement is posted every three feet, all over every location that we have, so if you are a customer, you’ve seen it”(Knowledge@Wharton, nd, para. 3). The mission statement states, “Above all, Employees will...
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...Happy Flier: A Financial Analysis on Southwest Airlines Thomas J. Baucus FIN 200 12/20/2014 Executive Summary The purpose of this report is an in-depth analysis on the financial position of Southwest Airlines Co. (LUV). As it stands, Southwest Airlines is a big player in the Regional Airline Industry due to the company’s focus on efficiency and consumer support. The company is prepared to handle the conditions cause by the decline in the economic cycle due to a conservative approach. Southwest Airline’s financial statements and ratios indicate a large increase in operations and profitability in the last three years. However, recent financing activities indicate an increase in current liabilities, PPE and a decrease in long-term debt. Analysts are worried that the company’s market price is inflated and are recommending the company less because of this. Despite these worries, Southwest Airlines is projected to be profitable in the upcoming years. This report is organized as so: the title page, the executive summary, the introduction, the current financial climate, financial statement and ratio analysis, short and long-term financing, risk management, and at last, the conclusion. A page containing my references used is available at the end of the report. Introduction Southwest Airlines Co. (LUV) is a leader in the regional airlines industry. Yahoo Finance states that “as of December 31, 2012, the company operated 694 aircraft… (and)... served 97 destinations...
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...Southwest Airlines MGMT 420 Abstract Since the early 1980’s the number of passengers travelling via airlines has increased drastically. The airlines all went through a troubling time when the Deregulation Act of 1978 came into effect. It opened doors for more competitive airlines to be built and created a competitive environment for the airlines. Southwest Airlines since it was developed has had numerous challenges to overcome and to operate. Since those challenges have depleted it has risen to be one of the top airlines that offer the lowest air fares for its customers. They also offer their employees the best work atmosphere and culture. Their mission statement is directed to both employees and customers. They have placed multiple strategic plans that has made them successful especially after the effects of 9/11 on the economy and trust of the consumer. Though the employees of the airlines are mostly Union workers, Southwest Airline has only had one strike from their employees during their time of operation. Southwest Airlines utilized promotional tactics such as offering safe, reliable, low cost flights with exceptional service. The company wanted to ensure that it was meeting the needs of both leisure travelers that did not have the funds to pay for expensive flights and for the travelers that were on time restraints and had to get to their location on time. Southwest has successfully done better than its competitors when it comes to cost and respect. Their frequent...
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...EWMBA 299 – Competitive Strategy Southwest Airlines Introduction The domestic US airline industry has been intensely competitive since it was deregulated in 1978. In a regulated environment, most of the cost increases were passed along to consumers under a fixed rate-of-return based pricing scheme. This allowed labor unions to acquire a lot of power and workers at the major incumbent carriers were overpaid. After deregulation, the incumbent carriers felt the most pain, and the floodgates had opened for newer more nimble carriers with lower cost structures to compete head-on with the established airlines. There were several bankruptcies followed by a wave of consolidation with the fittest carriers surviving and the rest being acquired or going out of business. Analysis of the airline industry To determine the profitability of the airline industry, we will do an industry analysis using Porter’s five-forces framework. This industry analysis will help us in understanding the size of the Potential Industry Earnings (PIE), and how much of this the different participants can extract. Rivalry among competitors There is intense rivalry among different airlines. In the pre-deregulation days, airlines competed mostly on things like service, meals and in-flight movies etc., since prices were mandated by the Civil Aeronautics Board. In the post-de-regulation era, this rivalry has taken on the form of severe price competition, with airlines ruthlessly undercutting each other with...
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...Introduction Southwest Airlines is a major airlines company which provides air transportation to the people in U.S. It is headquartered in Dallas, Texas, and employs 34,901 people. It was co-founded in March 16, 1967 as Southwest Co. by Rollin King and Herb Kelleher initially named Air Southwest until changing the name to Southwest Airlines in early 1971 (matthew, n.d.). The main objectives of the firm was to attract the passengers by providing convenient schedules, taking people to their destination on time, and charging fees compatible with their automobile. Their target market is the business travelers and price- sensitive leisure travelers. There are a number of strategies of the company. The company is known among the top market leaders by following the low-cost differentiation strategy. Their tagline “Freedom to Fly” gives them another advantage. They provide fare promotions to stimulate ticket sales on flights. Passengers do not have to pay for their bags. In addition to that, there are special benefit programs like frequent flyer program giving rewards like Standard Rewards which include a free round trip if the passengers earn 16 credits in 24 months. Similarly another reward like Companion Passes gives the passengers a free round trip if they earn 100 credits in 12 months. (Hadi, 2012) Furthermore, they plan to expand to new geographical markets and adding flights to those areas where their rivals are cutting back services. There is huge competition in the airline business...
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...MARKETING TERM PAPER FOR [pic] AIRLINES: A MODEL OF EXCELLENCE IN THE CIVIL AVIATION INDUSTRY Table of Contents 1.0 INTRODUCTION 3 1.1 Company Background 3 1.2 Research Topic 5 2.0 ENVIRONMENTAL ANALYSIS 6 2.1 Political, Economic, Social and Technological Analysis 6 2.2 Strengths, Weaknesses, Opportunities and Threats (SWOT) Analysis 7 2.3 Summary 9 3.0 SEGMENTATION, TARGET AND POSITIONING (STP) 10 4.0 PRODUCT, PRICE, PLACE AND PROMOTION (4Ps) 11 5.0 CONCLUSION 12 6.0 REFERENCES 13 6.1 ANNEX I 14 INTRODUCTION The Airline Industry has experienced global economic and ecological turmoil in the past two decades. This turmoil has brought to the fore the challenges being faced by the Aviation Industry in the world which have, in most cases, led to decreased profitability, lower growth rates, safety concerns and employee lay-offs among others. However, in-spite of the above mentioned challenges in the industry, Southwest Airlines has emerged as one of the most creative, most price competitive, safe, innovative and flexible company in the industry. The company has overcome unsurmountable challenges to become what is perceived today as a successful model of excellence in the industry with an extraordinary safety record in the last 40 years. In its forty-three years of service, the Dallas-based Airline continues to differentiate itself from other carriers with exemplary customer service delivered...
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