Premium Essay

Southwest Airlines Does Luv Last

In: Other Topics

Submitted By m221023
Words 3714
Pages 15
Does “LUV” really last? Many relationship experts have stated that “LUV” is eternal and that it is like a muscle that must always be worked out to keep it in shape, in order for it to last forever. While some may disagree that “LUV” can’t last forever, when it comes to relationships, the “LUV” that is in question is Southwest Airlines. What once was a small commuter air service, has now grown to be one of the largest and most successful major airline companies in the United States. So how did Southwest Airlines become so successful? It all began with the founders Rollin King, an entrepreneur, and Herb Kelleher, an attorney, who demonstrated strategic leadership from the beginning. The strategic leadership began when the these two gentlemen saw an opportunity that would be beneficial due to the inconvenience and expense of ground travel by either bus, train, or automobile between three major cities, which were Houston, Dallas, and San Antonio. Due to this, the establishment of Southwest Airlines came into existence by providing point-to-point short haul flights to less popular and less congested airports. Shortly after its establishment, like any other new businesses, Southwest faced many barriers in the beginning phases, which pertained to safety issues, inspections, and flight operations, which Southwest was able to overcome due to Herb Kelleher’s legal experience. After overcoming the barriers, the strategic leadership continued with the incessant building of the organization. Southwest Airlines’ organization is like an upside-down pyramid where upper management is on the bottom and the employees, who are the experts, are at the top. This was the leadership style of Herb Kelleher, who always believed that regardless of your title, the people who kept the business afloat were the employees of the company because they were the key to having satisfied...

Similar Documents

Premium Essay

Happy Flier

...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......

Words: 1876 - Pages: 8

Premium Essay

An Investment Analysis of Southwest Airlines for Embry Investment Group

...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......

Words: 3034 - Pages: 13

Premium Essay

Assignment #1 Financial Report

...2015 DR. WOO In all its 44th year of service, Dallas-based Southwest Airlines (NYSE: LUV) continues to differentiate itself from other air carriers. When Southwest Airlines first took to the skies in 1971, the idea was simple—offer low-fare air travel with the best Customer Service delivered by people who have a passion for serving others. Southwest Airlines was founded by Herb Kelleher and Rolling King. The company started its services for San Antonio, Dallas and Houston. The company was the first to introduce passenger programs that changed the airline industry. In the mid-1980s, the company was first to offer the frequent miles program. This program allowed travelers to bank traveled air miles to be used later as credit for a reduced airfare or free ticket. It was also the first airline company to offer senior discounts, fun packs and fun fares. In the 90s, the airline continued to introduced passengers to “newness”. In 1994, Southwest became the first major airline to offer ticketless travel. In 1996, Southwest became the first major airline to post a website with the launch of our “Home Gate” site. Southwest Airlines had other “first” as well. It adopted the first profit sharing plan in the US airline industry in 1973. The employees own almost 10% of the company stock through this plan and others. 87 percent of the company is unionized. The pilots are represented by the pilot association of Southwest Airlines which is a union separate from the much larger Air Line......

Words: 709 - Pages: 3

Premium Essay

Southwest Airlines Analysis

...Introduction The domestic airline industry has experienced various adversities over the past five years. Rising fuel costs, increased ticket prices, and the recession in 2009 have all threatened profitability and demand. While the industry is expected to rebound, Southwest Airlines was one of the few airlines that did not find difficulty in sustaining profitable operations. Southwest has a reputation for offering low fares with an optimal customer satisfaction rating. The company is growing rapidly and recently purchased AirTran in 2011 (Kelly, 2013). After a thorough assessment of the company’s financial structure and performance using financial and operation ratios obtained from the financial statements, the company has proven to be a unique player in the aviation industry. Management has consistently done their job of maximizing the company’s value of equity despite difficult times. The following report highlights key factors in determining the feasibility of RenDi Corporation forming a five year contractual relationship with SWA. Analysis Table 1.0 – Annual Income Statement Annual Income Statement ($ in thousands) | Year End Dec. 31, 2012 | Year End Dec. 31, 2011 | Year End Dec. 31, 2010 | Passenger revenues | 16,093,000 | 14,735,000 | 11,489,000 | Freight revenues | 160,000 | 139,000 | 125,000 | Other revenues | 835,000 | 784,000 | 490,000 | Total operating revenues | 17,088,000 | 15,658,000 | 12,104,000 | Salaries, wages & benefits | 4,749,000 | 4,371...

Words: 2736 - Pages: 11

Premium Essay

Marketing Strategy for Southwest Air

...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......

Words: 3971 - Pages: 16

Premium Essay

People

...People make Southwest Airlines one of the world’s most admired companies. As our greatest asset, our People create a FUN travel experience; respond with compassion when travel plans change; generate innovative ideas that enhance the Customer Experience; and donate their time and LUV to those who need it. At Southwest Airlines, we’re a Family dedicated to our Employees, our Customers, and the communities we serve. Our unique corporate Culture, commitment to giving back, and putting Employees first contributes to our being recognized as a best place to work. Southwest Airlines offers our Employees the freedom to pursue good health, create financial security, travel, make a positive difference, learn and grow, create and innovate, work hard and have FUN, and stay connected. In return, our Employees respond with passion, commitment, and a rich diversity of perspectives that translate into better Customer Service and a dedication to doing the right thing. Our Customers fly Southwest Airlines not only for programs like Bags Fly Free,® but because they like us. Together, as the hometown carrier that cares, we aspire to make a positive difference by giving back to the communities we serve. Our commitment to giving back gives our Employees a sense of pride and purpose that Southwest Airlines does the right thing. With a Warrior Spirit, a Servant’s Heart, and Fun-LUVing Attitude, we strive to do what’s right by our stakeholders and each other. It’s the Southwest......

Words: 13128 - Pages: 53

Premium Essay

Southwest Airlines: Leading Success

...Southwest Airlines: Leading Success Stephanie Pena Communication for Accountants/ COM530 July 14, 2014 Brent Smith Southwest Airlines: Leading Success Leadership, motivation, and workforce commitment are key building blocks within an organization. In a successful organization, these building blocks are connected and held together with the effectiveness of communication. Organizations develop their respective cultures through communication among leadership and with all employees, regarding their mission, values, and goals (Robbins & Judge, 2011). Leaders, both formal and informal, use communication within an organization as a means to motivate others, and to develop loyal and trustworthy employees. Such an organization is Southwest Airlines, whose company culture has been characterized over the years as having unique leadership and communications style. The style of leadership that exists within the organization sets the tone for the types of communication that are not only effective but are also motivational to its workforce. Analysis of Leadership Leadership is broadly defined as the ability to influence a group toward the achievement of vision or set of goals (Robbins & Judge, 2011). While no two people will lead in exactly the same manner, early research conducted by psychologist Kurt Lewin states that there are three basic leadership styles. The basic styles of leadership are (1) authoritarian, (2) participative and (3) delegative leadership (Cherry,......

Words: 1227 - Pages: 5

Premium Essay

Alaskaair Southwest Comparison

...Air Group and Southwest Airlines Co. | | 2/11/2012 | Introduction For the purpose of this paper, Alaska Air Group (ALK) is the subject of the primary financial analysis with the majority of comparisons made against Southwest Airlines Co (LUV). For financial purposes, the airline industry falls under the transportation sector, consisting of airlines, railroad, and trucking and characterized by the movement of people and products. For the purpose of this analysis, comparable airline carrier ratios are used. An enhanced look into the specifics of Alaska and Southwest’s financial statements and accounting methods explain their positioning in the airline industry and reflect their performance in recent years. Activities Alaska Airlines reported record earnings for the year 2010, with a $203 million improvement from 2009. A 9.8% increase in passenger traffic over the previous year drove the revenue increase (Alaska Air Group, Inc., 2011). Alaska also led the ten largest carriers in on-time performance for the year. For the third year in a row, it ranked highest in customer satisfaction among traditional network carriers, as listed by J.D. Power and Associates (Alaska Air Group, Inc., 2011). Challenges * The safety and financial results could be harmed in the event of an accident or incident * Changes in government regulations or restrictions could drive operating costs up * Security concerns related to the airline industry as a......

Words: 5459 - Pages: 22

Premium Essay

Southwest Airlines

...Marketing Excellence Southwest Airlines Introduction Southwest Airlines Co. is the largest low-cost carrier in the United States, and is headquartered in Dallas, Texas. The airline was established in 1967, by Rollin King and Herb Kelleher. Southwest begins flying within the state of Texas (between Dallas, Houston, and San Antonio) with three Boeing 737 aircraft. Today Southwest operates nearly 400 Boeing 737 aircraft to 59 U.S. cities. Southwest has the lowest operating cost structure in the domestic airline industry and consistently offers the lowest and simplest fares. Southwest also has one of the best overall customer service records. Moreover, It is one of the few airlines with no layoffs aimed a travel slump created by the slow economy and the threat of terrorism. Southwest offers types of products and services which include; air transportation, mobile access, shuttle service, priority boarding, early bird check-in, and pet allowance. Southwest has pioneered in Senior Fares, a same-day air freight delivery service, Fun Fares, and Ticketless Travel. Southwest was the first airline with web page- southwest.com, DING! The first-ever direct link to Customer’s computer desktops that delivers live updates on ticket deals, and the first airline corporate blog. A timeline of key dates in Southwest Airlines history: 1971 - Southwest begins flying between Dallas, Houston, and San Antonio. The idea for the airline was hatched over drinks by San Antonio lawyer Herb Kelleher...

Words: 5871 - Pages: 24

Premium Essay

Research Final Project Dana

...STRATEGY MBL 915P Southwest Airlines in 2008: Culture, Values and Operating Practices Repeater Assignment 2 By : Refiloe Mokebe (72542683) 9/6/2011   Table of Contents Introduction 3 Question 1 – What is impressive about South West? 3 Question 2 – Benchmarking against the best practices 4 Question 3 – Key drivers for low cost / no frills strategy 6 Question 4 - What are the key elements of Southwest’s culture? 9 Question 5 - What grade would you give Southwest management? 13 Question 6 - What problems or weaknesses do you see at Southwest Airlines? 15 Question 7 - What recommendations would you make to Gary Kelly? 16 List of References 17 Introduction The objective of this assignment is to apply analytical methods on how Southwest Airlines strategy is executed. Various Strategic models will be used in analyzing how Southwest Airlines is applying and executing their strategy. In late 1966, Rollin King, a San Antonio entrepreneur who owned a small commuter air service, marched into Herb Kelleher’s law office with a plan to start a low cost/ low-fare airline that would shuttle passengers between San Antonio, Dallas and Houston. Southwest Airlines was founded as Air Southwest Company in 1967, it incorporated as Southwest Airlines in Texas and began customer service in 1971. The airline was founded on King’s simple business concept “attract passengers by flying convenient schedules, getting them to their destination on time with good......

Words: 9704 - Pages: 39

Premium Essay

Southwest Airlines

...Case study: Southwest Airlines 1. What I find impressive about this company. * Did not lay off any employees with the 9/11 crisis. * Attract passengers by flying convenient schedules and using low fares to do so. * They strive on getting customers to their designations on time. They basically target time and price sensitive customers. * Their willingness to fight to stay competitive and not be shut down by anybody. * The fact that Southwest airlines have been profitable since 1973. * Managers do not only work from their offices, but they move around between the employees and they listen to whatever anybody has to say. * Southwest encourages the employees to think ahead and be creative and solve a problem as they seem best. * Their cost saving strategies. * Their unconventional and attention-getting ads they use. 2. How I grade Southwest management I will give Southwest an 8 out of ten grade were 1 is weak and 10 is excellent. Likes and dislikes about the strategy Likes: * I like the low-cost/low-price strategy. It ensures that the company will be profitable and they reach their target market. * They keep their cost below those of their rivals. * They operate only Boeing 737’s to keep too minimize their inventory of spare parts and the maintenance employees training are simplified. * Using the internet as their main ticket selling device, it saves time and money for both the company and......

Words: 1789 - Pages: 8

Premium Essay

Hr Analysis in Southwest Airline

...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......

Words: 9022 - Pages: 37

Premium Essay

Case Study Southwest Airlines

...Southwest Airlines, owned by Southwest Airlines Company, is a passenger airline primarily operating in the United States. Based on information in their annual stockholders report (Southwest Airlines, 2012), they provide scheduled air transportation for passengers departing and arriving from 103 cities in 41 states. This is limited compared to some of the larger airlines. The airline is the largest US domestic airlines based on the total number of originating passengers boarded. This does not mean they are the largest by fleet size or number of employees. Because of the point to point model rather than the typical hub and spoke model, 71% of Southwest’s fares are non-stop allowing them to increase the total passengers per day per plane. With this point to point model Southwest has made a profit for the past 39 years, and has grown into a $15.7 billion business operating 140 aircraft. Based on Gwynne (2012), Southwest started as a low cost point to point airlines operating from 3 Texas cities in 1971. They offered ticket prices as low as $40 per seat between Dallas, Houston, and San Antonio. Southwest flew from small airports and was able to get people in and out quickly with fewer hassles as compared to the major airlines of the time. Their market strategy at the time was simple. Get people where they wanted to go, on time, for the lowest price possible. This follows the production concept as described by A Framework For Marketing Management (2012). The early Southwest......

Words: 1311 - Pages: 6

Premium Essay

Airlines

...Strategic Report for Southwest Airlines Tycen Bundgaard John Bejjani Edmund Helmer April 12, 2006 Table of Contents EXECUTIVE SUMMARY............................................................................................... 3 COMPANY BACKGROUND ....................................................................................... 6 PORTER’S FIVE FORCES............................................................................................ 10 MARKET DEFINITION .............................................................................................................. 10 INTERNAL RIVALRY ................................................................................................................. 11 ENTRY ....................................................................................................................................... 12 SUBSTITUTES AND COMPLEMENTS ........................................................................................ 14 SUPPLIER POWER ..................................................................................................................... 15 BUYER POWER .......................................................................................................................... 18 FINANCIAL ANALYSIS.............................................................................................. 19 OPERATION FINANCIALS .................................................................................

Words: 8674 - Pages: 35

Premium Essay

Southwest Airlines

...Running head: VALUES AND ETHICS: SOUTHWEST AIRLINES Values and Ethics: Southwest Airlines University of Phoenix Management 521 Abstract Personal values and organizational values are important concerning decisions for any company. Those values and the decision-making style of one team member, based on the Williams Institute Ethics Awareness Inventory Assessment, correlates with the organizational style of Southwest Airlines, as discussed in this paper. Ethics, values, and character are critical components of any successful company. Companies that operate by any different perspective usually are unsuccessful. The challenge of any manager is to make sure that all his or her employees understand that ethics, values, and character are the building blocks of how he or she will conduct business every day. In order for employees to follow these guidelines, managers must conduct themselves the same way. Values and Ethical Decision Making: Southwest Airlines Personal, organizational, and ethical values play an important role in the decisions we make in the workplace. People have their personal values just as companies have their organizational values. Therefore, when the two are combined and an ethical decision is made, it can be difficult to make a decision without breaking the morale of the company as well as his or her own personal values. The challenge each day for every manager is to develop a cohesive balance between ethics and values. This difficult process......

Words: 1508 - Pages: 7