Premium Essay

History of Southwest Airlines

In: Business and Management

Submitted By ccarpio1
Words 509
Pages 3
Since the 1960’s, Southwest Airlines has been intensively competing to provide exceptional customer service and a stable work environment, while offering low airlines fares. On March 15, 1967, Air Southwest Co. was incorporated and in 1971 the airline changed its name to what is known today as Southwest Airlines. Herb Kelleher and Rollin King entered a highly competitive industry in the state of Texas, thus prompting three other airlines to file a temporary restraining order against Air Southwest from receiving the certificate of public convenience and necessity form the Texas Aeronautics Commission. Even though Southwest Airlines incurred net losses in the 1970’s, Herb was not deterred from continuing services in such competitive environment. It has been more than 38 years and Southwest Airlines mission remains the same – “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.”
Southwest Airlines maintains its mission of providing excellent services by allowing an open seating policy, this allows passengers to seat in any available seat once onboard the aircraft. This quality of services is rarely offered in other airlines. Also, all Business Select, EarlyBird check-in, and Rapid Rewards A-list members are automatically reserved for boarding and are able to print boarding pass at their own convenience and allowing passengers to proceed to their departure gate without stopping at ticket counters, skycap, or self kiosk. This speedy service prompts many travelers to choose Southwest Airlines over other competitors. While many other airlines charge for Check-In baggage, Southwest Airlines allows two Check-In pieces of baggage for free. By continuing this free service Southwest Airlines has kept a competitive edge over other airlines and…...

Similar Documents

Premium Essay

Southwest Airlines

...Environment | | Mary | 12/9/2012 | This is a topic about an airline that has the lowest cost for transportation in the world. It has been in business for over forty years. It is a commercial airline that services thirty nine cities. The company Head Quarters is in Dallas, Texas. They recently merged with Air Tran Airways and are now working under one name. | Identify the investor’s relations link and review the company’s investor relation information. The investor relation is dedicated to the three P’s. Performance, People, and the Planet Southwest (LUV) is the symbol that was chose to represent its home base of Dallas Love Field its employees and customer relations. It is known for its excellent customer service. Southwest Airlines has endured thirty-nine years of profits. It made over 400 million in free cash Flow which means a company is able to its debt. On May 2nd, 2011 Southwest finished its purchase on all the stock of Air Tran Holdings. There are forty- one years of service and they still can be differinate from other low cost carriers. Provide a financial summary of your selected company’s financial health. Southwest airlines received a B+ by the (GRI) Global Reporting Imitative which is a standard grading of company sustainability. December 31, 2011 the company operated 698 aircrafts, 610 was Boeing 737 and 88 Boeing 717 and serve 39 states and 72 cities. It is a passenger airline that offers air transportation in the US. The company......

Words: 567 - Pages: 3

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

Southwest Airlines

...Southwest Airlines has adopted a cost leadership strategy. Southwest chooses to operate by the most efficient way by concentrating on short-haul segments rather than hub-and-spoke system. Southwest Airlines has created its own niche by providing short-distance flights connected less populated airports that have often been ignored by the large carriers. They use the same fleet of aircraft that helps them in limiting the number and variety of technicians and the training expense that would be required of a fleet consisting of various different kinds of aircrafts. It also doesn’t provide full services such as food, designated seats etc. to keep their cost down. It also invests heavily in fuel futures by locking in fuel prices in advance that has helped them in saving millions in dollars even after the fuel prices have been increasing. It believes that it should satisfy its employees first and then they would satisfy its customers. It believes that it should trust and stand on its employee’s side. All the employees of Southwest Airlines work as a big family, and everyone in the crew share the responsibility of cleaning up the aircraft, and enabling their planes to have the take-off again after a spending very short period of time after the ground duty. The company has a strong, fun-loving, employee-oriented culture. The company's mission statement focuses on these aspects of the business. The result is a loyal employee base that is willing to work hard to achieve the......

Words: 696 - Pages: 3

Premium Essay

Southwest Airline (a)

...Case Assignment 1 (Southwest Airlines (A)) 1. What is Southwest’s general business strategy? Why has it been successful for so long? Can it be replicated by a competitor? Southwest Airline (SWA) has several successful business strategies: high aircraft utilization, low fare carrier, leadership, great customer service, attractive frequent flyer program, innovative marketing strategy, and human resource management. Regarding operations strategies, by only focusing on fuel-efficient aircrafts, 737s, SWA is able to save on maintenance and training costs. Offering short-haul, point-to-point routes using less congested airports that are close to metropolitan area leads to SWA’s efficiency. Moreover, by shrinking turnaround time, SWA can maximize the high aircraft utilization. Regarding leadership, Herb Kelleher, one of the best all-time CEO, has great leadership style and relaxed management style. His leadership style contributes to people-oriented firm’s philosophy. In terms of great customer service, SWA offers on-time and low cost fares. By having no central hub and spoke system, SWA is able to avoid the delays associated with connection flights. SWA’s average flight time, 65 minutes attracts new customers who usually drive to the final destination. By offering two types of fares on a route, SWA can save on operating system costs. Besides, SWA has own frequent flyer club based on the number of trip flown not on the mileage. Hence, SWA can reduce operating costs......

Words: 1067 - Pages: 5

Premium Essay

Southwest Airlines

...SOUTHWEST AIRLINES CO. CASE STUDY 2013 1) Financial data from 2012-2008 | Revenues(b) | Net Income (b) | Load Factor | Trips flown | 2012 | $17.09 | $0.42 | 80.3% | 1,361,558 | 2011 | $15.66 | $0.18 | 80.9% | 1,317,977 | 2010 | $12.10 | $0.46 | 79.3% | 1,114,451 | 2009 | $10.35 | $ 0.099 | 76.0% | 1,125,111 | 2008 | $11.02 | $0.18 | 71.2% | 1,191,151 | 2) Blue Ocean Strategy Blue ocean strategy refers to the creation of a new, uncontested market space by a company that makes competitors irrelevant and that creates new consumer value often while decreasing costs. Southwest airlines is a very good example for using Blue Ocean Strategy as by creating a new market by offering the speed of air travel with the low cost and flexibility of driving. The three main aspect of Blue Ocean Strategy are as follows and how the Southwest Airlines applies these to its business: FOCUS: Southwest focus only on three factors: friendly services, speed and frequent point-to-point departures. They doesn’t make investment in meals, lounges and seating choice and able to price against car transportation DIVERGENCE: While the other Airlines operated through hub-and-spoke systems, Southwest Airlines doesn’t followed them instead created new rules and alternatives by choosing point-to-point travels between midsize cities. COMPELLING TAGLINE: A Good strategy has a clear cut and compelling tagline, which not only provides clear, cut message but also......

Words: 1882 - Pages: 8

Premium Essay

Southwest Airlines

...Abir Abdulbaki 28053 Successful Southwest Airlines Southwest airlines (SWA) is an American airlines that provide traveling services with low prices. It operates only in the US and rely mostly on domestic passengers. It’s a very successful airlines with high revenues and performance. The company revenues, operating profit, and net profit increase consistently. In December 2006, it earned 9,086 million dollars which is 19.8% more than 2005. Moreover, the operating profit increased by 28.8 % to be 934 million dollars. The net profit in 2006 was 499 million dollars and this is an increase of 3.1% from year 2006 (Datamonitor,2007). Southwest airlines have been profitable even when its competitors have been struggling to gain a small amount of profit. What are the strategies that SWA is following to be this successful ? Alternatives to lay-offs : There are several alternatives to lay-offs that cut costs and reduce labor surplus with less disadvantages. Some examples of these alternatives are downsizing, pay reductions, transfers, work sharing, and hiring freeze (Noe,R. Hollenbeck,J.Gerhart,B, & Wright,P ,2010). In the wake of 9/11 terrorists attacks, Southwest refused to lay-off employees while its competitors got rid of employees and unprofitable routes. Southwest took the positive side of this difficult times and increased its existence and used their low cost model. Planned purchase of new planes was delayed. Also, it scraped ongoing plans to......

Words: 792 - Pages: 4

Premium Essay

Southwest Airline

...Learning Team A QNT 561 May 19, 2011 INTRODUCTION The airline industry has been devastated by rising fuel costs and the declining economy. The fuel costs in the USA have risen to levels that have led Southwest’s management to evaluate options to promote ticket sales during this tough economic time. The focus of Southwest Airlines is to survive, continue to be competitive and make a profit. The recent history of struggles they have encountered mainly due to the economy, fuel costs, and also the structural damage of the aircraft. Southwest has had to develop and execute plans to improve their business to retain a strong company. Southwest’s management team has requested a research team using a survey as the main instrument to help understand the airlines travelers concerns and desires to prevent them from seeking travel to other airlines. The research conducted will provide management with some insight into the reasons travelers will continue to utilize southwest as there primary airline of choice. BACKGROUND Southwest Airlines has built its culture and its reputation from the inside out. It values a happy workforce, and believes that its 32,000 satisfied employees will keep customers coming back. Southwest sees the importance of building and sustaining strong internal relationships. They believe in promoting from within and providing employees the opportunity to grow and learn from one another. Everyone at Southwest understands the role each individual plays and......

Words: 1292 - Pages: 6

Premium Essay

Southwest Airlines

...business are we in”?  Why has it been so successful so long? In short, Southwest pursued a customer - driven strategy.  However, this strategy is composed of many different components.  By definition a customer – driven strategy is created to cater to the customers’ needs.  With this approach Southwest aimed to not only gain customers from their competitors, but to also continue to grow by continuously delivering greater value.  Their operational strategy also includes keeping their customer’s fares low, maintaining low business operating costs, and offering fewer flight routes, yet very frequent flight times.  All together this strategy proved to be a great choice for Southwest Airlines. This strategy initially differentiated Southwest by placing them in previously untouched niche market. Southwest Airlines was able to benefit from the first mover advantage, by being the pioneers of this innovative approach. However, as others in the industry became aware of Southwest’s success they wanted to attempt to duplicate this successful strategy.  Specifically, United, USAir, and Continental Airlines are three larger carriers that are making attempts to replicate the success of Southwest Airlines.            The question, “What business are we in?” is meant to imply what is the actual value that consumers get from a company’s product or service.  In the case of Southwest Airlines, they are technically in the airline business but in reality they are actually in the business of......

Words: 1676 - Pages: 7

Premium Essay

Southwest Airlines

...Case Study: Southwest Airlines MGT 620X- Operations Strategy February 27, 2015 Executive Summary This case study will look at the various services that Southwest Airlines is looking to add to their current offerings. Whether or not satellite-based WiFi internet, extensive wine and/or coffee offerings, and the possibility of international alliances with other airline carriers are areas that should be explored to enhance services at Southwest. While each of the above mentioned services are all luxuries that many customers would enjoy having on a flight the airline the airline must establish if they are all luxuries that customers would also be willing to pay for. Southwest prides their business on being able to offer low-cost fares adding services would mean increasing rates. Southwest must determine if the risk is worth the reward. This case study will help Southwest make some of those determinations. Introduction: LUV Southwest Airlines is defined by their mission statement: “dedication to the highest quality of customer service delivered with a sense of warmth, friendliness, individual pride, and company spirit” (Southwest, 2015). When making decisions on which path......

Words: 1853 - Pages: 8

Premium Essay

Southwest Airlines

...Southwest Airlines Corporation INTRODUCTION The Mission of Southwest Airlines 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. Southwest Airlines Co. is a major U.S. airline and the world's largest low-cost carrier, headquartered in Dallas, Texas. The airline was established in 1967and adopted its current name in 1971] The airline has 44,831 employees as of December 2013 and operates more than 3,400 flights per day. As of June 5, 2011, it carries the most domestic passengers of any U.S. airline. As of November 2014, Southwest Airlines has scheduled service to 93 destinations in 41 states, Puerto Rico and abroad. Southwest Airlines has used only Boeing 737s, except for a few years in the 1970s and 1980s, when it leased a few Boeing 727s. As of August 2012 Southwest is the largest operator of the 737 worldwide with over 550 in service, each averaging six flights per day. Southwest had the lowest operating-cost structure in the domestic airline industry and consistently offered the lowest and simplest fares. Southwest also had one of the best overall customer service records. In 2001, the airline had 35,000 employees and generated total operating revenues of $5.6 billion from a passenger load factor of 68.1 percent. Its stock exchange symbol was LUV, representing Southwest’s home at Dallas Love Field, as well as the theme of its employee and...

Words: 945 - Pages: 4

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

...Company Analysis Project – Final Paper – Southwest Airlines Charles M Mohr MBA 6008 – Global Economic Environment Capella University Doctor Halstead February 19, 2016 Abstract The aircraft carrier business contends in an oligopoly showcase. This implies just a few of airline companies control the significant bit of the business. Southwest Airlines is one of these organizations. They make up 16.6% of the business sector, second only to Delta. The motivation behind this paper is to talk about the microeconomic and macroeconomic situations that Southwest Airlines faces every day. The Airline Deregulation Act that was passed in 1978 was a huge impact on the aviation industry. There are administrative contemplations on financial choices, for example, group clamor and air quality. Southwest Airlines has moral (ethical) contemplations that should be tended to at whatever time financial choices are made. This paper additionally touches on the monetary hypotheses and models, including the Bertrand Model that Southwest Airlines ought to audit and consider for future accomplishment of the organization. Southwest Airlines must take after the Sustainability Accounting Standard for Airlines for all their bookkeeping purposes. Table of Contents Abstract 2 Microeconomic Environment 5 Macroeconomic Environment 8 Economic Implications 10 Regulatory Considerations on Economic Decisions 11 Ethical Considerations on Economic Decisions 13 Economic Theories and Models 14 ...

Words: 3947 - Pages: 16

Premium Essay

Southwest Airlines

...For the exclusive use of M. Park, 2016. CASE: HR-1A DATE: 1995 (REV’D. 04/05/06) SOUTHWEST AIRLINES (A) “The workforce is dedicated to the company. They’re Moonies basically. That’s the way they 1 operate.” —Edward J. Starkman, Airline Analyst, PaineWebber Ann Rhoades, vice president of people for Southwest Airlines, was packing her briefcase at the end of a 17-hour day. Tomorrow was an off-site meeting with the top nine executives of Southwest Airlines. The agenda for the meeting was to review Southwest’s competitive position in light of recent actions by United and Continental, both of whom had entered Southwest’s low fare market. That day’s New York Times (September 16, 1994) had an article that characterized the situation as a major showdown in airline industry: This is a battle royal that has implications for the industry, said Kevin C. Murphy, an airline stock analyst at Morgan Stanley. The battle will, after all, be as much a test of strategy as a contest between two airlines. United and other big carriers like USAir and Continental have decided that they can lower their costs by creating a so-called airline-within-an-airline that offers low fares, few flights, and frequent service. The new operations are unabashedly modeled after Southwest, the pioneer of this strategy and keeper of the healthiest balance sheet in the industry.2 The reasons for this competition were easy to understand. Over 45 percent of United’s revenues came from......

Words: 12669 - Pages: 51

Premium Essay

Southwest Airlines

...Organizational Behavior and Communication - Southwest Airlines University of Phoenix COM/530 Organizational Behavior and Communication - Southwest Airlines Culture, Values, and Communication Southwest Airlines (SWA) is a company of more than 37,000 employees (Southwest Airlines, 2011). It has been recognized as: #1 and #2 by Fortune magazine’s “100 Best Companies to Work for in America”; the only airline to win the Triple Crown (#1 in most on-time flights, least lost baggage, and fewest Customer complaints) (McGee-Cooper, Trammell, & Looper, 2008); and although unionized, the lowest turnover rate and the best labor relations in the industry (Quick, 1992). “The Southwest Way” drives SWA’s culture with values of “Warrior Spirit, Leading with Servant’s Heart, and a Fun-LUVing Attitude!” (McGee-Cooper, Trammell, & Looper, 2008). “LUV” is SWA’s stock ticker symbol derived from their “LUV” for Customer Service (Southwest Airlines, 2011). The first value, Warrior Spirit, empowers employees to work hard, desire to be the best, and innovate (Southwest Airlines, 2011). When a SWA employee, still in her probationary period, hired three buses to get customers safely to their destinations after bad weather caused cancellation of a late flight, leadership commended her for her innovativeness (McGee-Cooper, Trammell, & Looper, 2008). The second value, Lead with a Servant’s Heart, follows the Golden Rule, “Treat others as you want to be treated.” SWA leadership......

Words: 1044 - Pages: 5

Premium Essay

Southwest Airlines

...Southwest Airlines has been profitable since 1973â�"an enviable record no other U.S. airline can match, let alone beat. Much of the credit for the airline's enduring success goes to CIO Herb Kelleher, an affable, hard-driving leader whose fun-loving personality pervades the entire organization, top to bottom. After all, how many airlines have the ticker symbol LUV or paint Seaworld's "Shamu the Whale" on a jetliner? The history of Southwest reflects its CEO's tenacity. Kelleher had a law practice in San Antonio when a client suggested starting a discount airline to link three Texas cities. After five years of legal battles due to competitors' objectionsâ�"before deregulation opened the skies to anything-goes competition and pricingâ�"southwest finally got off the ground in 1971. To keep airfares low, the start-up avoided extras such as meal service and got planes in and out of the gate in twenty minutes or less. The airline now serves dozens of cities across the United States using the original formula of low prices, low costs, and high productivity to keep profits high. In fact, Southwest's operating margins are now three times higher than the industry average. Kelleher knows that other airlines can buy the same planes and fly the same routes, even set the same prices. What they can't imitate, he pointedly notes, is Southwest's legendary team spirit. The workforce of 30,000 is fiercely loyal to Kelleher and the company, pitching in to get things done on time and within......

Words: 669 - Pages: 3