Premium Essay

Success of Southwest Airlines

In: Business and Management

Submitted By justis
Words 866
Pages 4
SUCCESS SOUTHWEST AIRLINES

So, to start with, the company was founded in 16th of March, 1967 Dallas by Herb Kelleher and Rollin King. It has a subsidiary company which is AirTran Airways. Southwest Airlines flies to 72 destinations in the United States. Key people of the company are Herb Kelleher (Co-founder), Rollin King (Co-founder) and Gary C. Kelly (President, CEO & Chairman). And total assets in 2010 were more than 15 billion dollars.
In simple words, more than 44 years ago, Rollin King and Herb Kelleher got together and decided to start a different kind of airline. They began with one simple notion: 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. And you know what? They were right.

[pic]
As we see, Southwest Airlines is among 3 biggest domestic United States airlines. Their biggest competitors are American Airlines and Delta Airlines. Also you can see AirTran Airways company which is now a subsidiary of Southwest Airlines.

So now we have a question – why the airlines are so successful? Here I’d like to point two sides – financial and attitude.
Financial reasons which help the company to save money and as a result to gain more profit are these:
One Plane Fits All
Southwest flies just one plane type, the Boeing 737 series. That saves Southwest millions in maintenance costs—spare-parts inventories, mechanic training and other nuts-and-bolts airline issues. It also gives the airline unique flexibility to move its 565 aircraft throughout the route network without costly disruptions and reconfigurations.
Point-to-Point Flying
Network carriers rely on a hub-and-spoke system but not Southwest. Most of its flying is nonstop between two points. That minimizes the time that planes sit on the ground at...

Similar Documents

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

Diversification Strategies: the Secret of Southwest Airlines" Success

...Diversification Strategies “The Secret of Southwest Airlines’ Success” BUS 508, Contemporary Business Determine how Southwest Airlines’ corporate culture differs from other airlines: From the time Herb Kelleher co-founded Southwest Airlines in 1971 his goal was to establish a company that cared about its employees, who would in turn care about and service the needs of their customers with pride. Southwest has created a fun-loving work environment that rewards and appreciates unique personalities and how they can enhance the customer service experience of their patrons. This is refreshing in today’s market and the main difference between Southwest and other airlines. The mission of Southwest Airlines is to ensure satisfaction of their internal as well as their external customers. The external, of course, being the traveler and the employee is viewed as an internal customer. Externally, Southwest focuses on customer service, delivered with “a sense of warmth, friendliness, individual pride, and company spirit.” Customer service is number one (#1) for this airline. It is displayed in their every movement. The airline’s president, Collen Barrett is quoted as saying, “Southwest likes to think of itself as a customer service organization that happens to fly airplanes.”(Smith, 2004) The airline is dedicated to their customers. When other airlines felt the economy crunch and decided to start charging customers to check bags, Southwest refused to add a charge to......

Words: 1274 - Pages: 6

Premium Essay

Southwest Airlines

...Southwest Airlines: In a Different World - Team 3 1.) Why has Southwest Airlines been more successful than its competitors? Herb Kelleher and Rollin King established Southwest Airlines in 1967. For the first few years, Southwest Airlines battled illegal lawsuits from larger airlines that did not want Southwest to enter the market. After many years in the courts Southwest Airlines was able to offer flights to customers. Starting a new company with large expenses is not an easy task. Southwest Airlines had to find a way to stand out to customers so they could sell their airline tickets. In the beginning Southwest offered a low fair price to fly. One of their promotions was a one-way fare for only $20. Southwest wanted to expand their flights to more cities and needed more revenue. In order to increase their prices and not lose customers, Southwest promoted free alcoholic beverages with airfare. Many customers had no problem paying more for flights and Southwest expanded. Southwest did not charge for additional luggage, which helped out those who had an abundance of luggage on trips – giving them an advantage and separating them from other airlines. Southwest also used many promotional schemes to attract new customers. One of them was “long legs and short skirts” for stewardesses on board the flights. The same person who hired hostesses for Hugh Hefner’s Playboy jet hired many of Southwest Airlines stewardesses. Southwest has always hired interesting employees......

Words: 1923 - Pages: 8

Premium Essay

Southwest Airlines: Leadership Matters

...Southwest Airlines: Leadership Matters Latrice Alston University of Phoenix COM 530: Communication for Accountants Tonya Boddie September 12, 2012 Southwest Airlines: Leadership Matters Leadership styles affect the way organizations function and interact with employees, consumers, and business partners. Leaders develop a style of communicating based many times on experience. Southwest Airlines, a leader in the airline industry has enjoyed unparalleled success due to its business plan and dynamic leadership. For Southwest Airlines, senior management places great emphasis on employees realizing satisfied employees are pivotal to the success the organization has and will continue to experience. Effective leaders are critical to advancing the vision and mission of the organization. Southwest Airlines continues to make strides in the airline industry based the strategic vision of management. Southwest’s mission to provide excellent customer service delivered in with warmth, friendliness and pride is the mantra of the organization. Leadership comes with a price and those tasked with leading must be able to balance both the mission of the organization and the needs of employees. Unlike other organizations Southwest Airlines, due to the multi-faceted leadership style has a very low rate of negative attrition. Factors impacting attrition within organization can most time be attributed to the way organizations are managed. Having......

Words: 1364 - Pages: 6

Premium Essay

Southwest Culture

...Abstract Southwest Airlines has a one of a kind culture primarily based on customer service. Southwest Airlines dedication to happy employees has been the platform for their success. Like any organization, communication is essential to keep employees and customers informed and united. Southwest Airlines has numerous forms of both internal and external communication such as newsletters, customer interaction software, and much more. Southwest Airlines adopted values most definitely align with their enacted value, which they call their formula for success; a happy employee equals a happy customer (Southwest Airlines, 2013). Southwest Airlines is one of the nation’s leaders in customer service, and it roots from the culture of the organization. Southwest Airlines vision is to grow by doing it conservatively. They want to capitalize and cut back on schedules for other airlines which will result in a long-haul success. Their mission statement is to provide the highest level of customer service with friendliness and company spirit. From the very beginning, Southwest Airlines motto was to give everyday people a chance to fly and their low-cost fares definitely support their values. Southwest Airlines biggest dedication is to their employees. They continuously provide employees with a steady work environment with equal opportunities for learning and advancements. They encourage employee’s voice his or her opinions and new ideas they may have for improvement. To Southwest......

Words: 631 - Pages: 3

Premium Essay

Southwest

...Southwest’s Success Commercial air travel is one of the most competitive industries in the world. From its onset, Southwest Airlines has made significant inroads in pursuit of low fares. The organization has been determined to be the lowest cost airline in the industry for the selected routes that it flies. Considering their position, the question arises as to how they consistently remain more successful than their competition. The answer is not one that sheds light on one specific area, but a series of factors that, when combined, allow Southwest Airlines to shine above their peers. The goals of Southwest’s management within Southwest include keeping operations simple and consistent, maximizing assets, managing customer expectations, and keeping costs to a minimum. Management has achieved these goals by incorporating the following: 1. Using a One plane fits all philosophy. The competition operates many different jets to meet their missions. Southwest saves millions in inventories, training, maintenance, and other problems associated to non-commonality. This is in addition to having the ability to swap planes from one route to another. 2. Flying from one point to another. Other airlines use the common “hub and spoke” system, unlike Southwest, which flies from one point to another, non-stop. This reduces ground time and delays, while assisting with on-time performance. 3. Implementing a “no frills, no fees” policy. To keep cost to a minimum, Southwest sells seats in......

Words: 2094 - Pages: 9

Premium Essay

Southwest Airlines

...------------------------------------------------- Southwest Airlines Thousands of people travel by air; Southwest Airlines provides low-fare air transportation service among 58 cities in the United States. Although the industry suffered a major blow from the terrorist attack of September 11th, the company is still holding strong; while other airline companies are in debt. The information was majority gathered and analyzed from the Internet; sources such as "News Week," and "Wall Street Journal." According to the acquired knowledge of Southwest, the company maintains steady sales. The major success to their continued success is due to their low-cost model and competitors are aware that they cannot match Southwest Airlines low prices therefore, by dropping the price even lower; Southwest Airlines can force a company to go bankrupt.  Introduction In 1971, Rollin King and Herb Kelleher started an airline service with one simple notion: "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." They were right about that. Southwest Airline is now a major airline, in fact, the fourth largest airliner in the United States that is trading under the Symbol LUV on NYSE.  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......

Words: 2861 - Pages: 12

Premium Essay

Southwest

...Southwest Airlines 1 Southwest Airlines: What is Southwest Airlines Doing Right? Management Southwest Airlines 2 Southwest Airlines: What is Southwest Airlines Doing Right? Time and time again Southwest Airlines has been recognized for its outstanding customer service, employee loyalty and unorthodox leadership methods. Southwest Airlines success can be attributed to the enforced morals and belief system of its leaders; they treat their customers fairly and their employees like family. There are numerous reasons why Southwest Airlines has been so successful; some of the most important being employee and customer satisfaction, keeping costs down and strong future initiatives. These key areas would not be what they are today without the strong leadership behind this great company. Southwest also believes in educating its employees formally and informally, Southwest Airlines Chief Executive Gary Kelly incorporates several policies of his own to keep the company going. These policies are: First question authority and challenge convention, second remove the fear of failure, third make work an adventure, and fourth play to win, don’t play not to lose. Southwest Airlines has one of the lowest absenteeism rates of major companies and almost a complete lack of tardiness on staff, as a reward Southwest Airlines implemented casual Friday’s everyday. The......

Words: 2366 - Pages: 10

Premium Essay

Strategy

...Southwest Airline Strategic Choice Christine Stevenson University of Phoenix STR/581 January 26, 2011 Dennis Madison Southwest Airline Strategic Choice Southwest Airline is one of the most successful airlines. Southwest Airline success is because the airline stays on track with the company’s mission. The mission of Southwest Airlines is dedication to the highest quality of customer service delivered while keeping cost low. Since September 11, 2001 many airlines have struggle to survive. The airlines again are struggling because of the low economy. Southwest Airlines shows the example on how combining different strategies a company can because successful. Value Discipline Southwest Airlines set bar for other airlines after September 11, 2001 terrorist attack on the New York Trade Centers. As many airlines went into bankruptcy. Southwest airlines continued to have success. Part of Southwest Airlines success is because of the value discipline to observe operational efficiency and keep cost as low as possible. Southwest Airline became known for its low cost solution in its industry. Southwest Airlines changed people views on traveling by air in the United States. Each department followed the airline’s objective making the airline the top airline in the industry. Southwest Airline took the philosophy to sell a product, the product has to be the right price, place, and timing. Operational efficiency of Southwest Airlines built on the key points: Price (low ticket......

Words: 1016 - Pages: 5

Premium Essay

Accounting

...Southwest Airlines Kaushal Desai Vaishali Patel Debra Quach Introduction Although the airline industry is no longer experiencing the rapid growth it exhibited before 1990; commercial air travel in the U.S. remains the preferred method of transportation for a majority of Americans due to cost-effectiveness and timesaving characteristics. From 1980 to 1990 the number of passengers traveling by air increased by approximately 72%, in contrast, in the 1990-1998 period, the airline industry only experienced 36% growth. Furthermore, during 1965-1978, the government regulated the airline industry by forcing artificial wage increases and artificial price levels. In the postderegulation era, labor negotiations were the cause of many labor strikes. The big carriers have tried to cut costs, but have been constrained by strong union opposition. For example, “Unions have fought against moves to shift unprofitable routes to lower cost regional jets with lower paid pilots.” Confronted with cut-throat competition, particularly from low-cost rivals such as Southwest, now America's fourth largest carrier in terms of traffic flown, the big airlines have found themselves caught traditional fare wars that cut into their already slim profit margins. The domestic airline industry in the United States is characterized by intense rivalry and low profit margins. Through product differentiation and a strategy of low cost and no frills, Southwest has been successful in distinguishing itself from......

Words: 3410 - Pages: 14

Premium Essay

Southwest Airlines Evaluation

...Submission Southwest Airlines Evaluation Introduction Southwest Airlines is a unique short-haul airline operating in United States with its headquarters in Dallas, Texas. It was started nearly three decades ago, and it has been considered as model as a model for the industry. It was started in 1967, but started flying in 1971 following successful court battle from competitors who argued against its entry into the market (Doganis 124). Southwest airlines have come along way as low-fair airline managing to compete fairly with its larger competitors. The airline has managed to survive three decades of cut-throat competition by concentrating on offering short sectors. This sector targets at offering low unrestricted fares, excellent online departure, and high point-to-point frequencies. Its strategies targeted at diverting passengers from ground transport to air transport. This paper will evaluate the success of Southwest airlines in relation to its financial control, financial planning, management of costs and effectiveness of its decision making process. Evaluation of Southwest Airlines Success Factors Right from its inception into the airline market, Southwest airlines have been very keen on its financial planning especially with regard to operating at costs that are consistently below its revenues. Despite the fact that its unit revenues are not below those of its competitors, it has managed to operate at cost levels that are 25-40 % lower (Doganis 132). The airline......

Words: 1557 - Pages: 7

Premium Essay

Mgt 445

...University of Phoenix Week 5 Southwest Airlines is a company that has endured many changes through its more than 38 years in the airline industry through an understanding of what leadership and management is. What began as a small Texas airline has grown to become one of the largest airlines in America. Today, Southwest Airlines flies over 100 million passengers a year to 66 different cities all across the country, and they do it more than 3,200 times a day. The Department of Transportation began tracking Customer Satisfaction statistics in 1987, and since then, Southwest Airlines has led the entire airline industry with the lowest ratio of complaints per passenger boarded. So what is it that makes Southwest Airlines so different from the other airlines, it is a correlation of doing many things right. These things include but are not limited to, leadership, management, and dealing with occupational stress. Let us take a closer look into the success of this company and how it overcame some seemingly impossible obstacles. When industries and [pic]its customers complained on how they are treated, there is something wrong fundamentally. Many Airlines have chosen an alternative to respond to this crisis by cutting down in services and workforces. It is not a lot to anticipate enterprises or airlines to provide a profitable return to investors, job’s for their employees and reliable services that is high in quality. The airline industries are failing when......

Words: 1819 - Pages: 8

Premium Essay

Southwest Airlines

...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......

Words: 2475 - Pages: 10

Premium Essay

Southwest Ceo

...Southwest CEO Amanda McKenna MAN103-015-002 Sunday November 25, 2012 Instructor: Jean Anderson Southwest Airlines has been in business for over 25 years. It has high executive development. The most impressive thing about Southwest Airlines, perhaps, is that over the past 25 years it has managed to retain its one- of a-kind corporate culture. Southwest has grown from a three airplane Texas puddle jumper into the world’s sixth largest airline in terms of enplanements. Southwest operates a fleet of 243 Boeing 737s and it now employs 23,000 people. They serve 51 cities in 25 U.S states. Southwest offers manager in training programs as well as leadership classes. Southwest recruits about 95% of executives internally. It is said that the airlines success rate is bringing in outside executives is probably no better than 50%. Southwest has a culture that depends on employees at all levels. Southwest’ success is entirely home grown. Southwest Airlines maintain permanent low cost for permanent low fares. It is the only way to run a permanently profitable airline. Southwest ranked N0.4 among U.S majors in terms of passenger enplanements. Southwest’s route map comprises 59 airports serving 58 cities in densely populated areas. So, Southwest Airlines offers low cost air fare and is a high-tech company. It has several different airports in many cities and is constantly growing and evolving. They treat their customers as well as their employees with high respect and kindness.......

Words: 855 - Pages: 4

Premium Essay

Business

...University Southwest Airlines Case Study Analysis MBA 6143: Entrepreneurial Leadership August 17, 2012 Abstract This paper analyzes Southwest Airlines Case Study. Southwest Airlines was originally incorporated to serve three cities in Texas as Air Southwest on March 15, 1967, by Rollin King and Herb Kelleher. Leadership at Southwest Airlines plays a paramount role in the success of the company. Before its role is discussed in detail though, a definition of leadership will provide a foundation for the rest of this analysis. The paper explains the Southwest Airlines company history, background of the company, the role of leadership at Southwest Airlines, how culture is displayed at the company, competitive dimensions, leadership practices of CEO, recasting the role of the CEO, and 21st century entrepreneurial leader. Keywords: 21st century entrepreneurial leader, Southwest Airlines, Leadership, CEO Company History Southwest Airlines was originally incorporated to serve three cities in Texas as Air Southwest on March 15, 1967, by Rollin King and Herb Kelleher. According to frequently-cited story, King described the concept to Kelleher over dinner by drawing on a paper napkin a triangle symbolizing the routes (Dallas, Houston, and San Antonio). Some of the incumbent airlines of the time (Braniff, Aloha Airlines, United Airlines, Trans-Texas, and Continental Airlines)......

Words: 4445 - Pages: 18