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The Southwest Airlines‘s Weaknesses
Southwest airlines and american airlines case study brief
Southwest airlines and american airlines case study brief
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Recommended: The Southwest Airlines‘s Weaknesses
Customer Value Insights
Southwest Airlines has managed to keep a profit year after year while keeping customers happy. According to Southwest airlines official website, they have a track record of 42 consecutive years of profitability and they have been on Fortune magazine’s list of the most admired companies in the world (Gary Kelly chairman, president and CEO Southwest Airlines). How does Southwest maintain such a stellar service? Most airlines provide the same services and products. A southwest airline differentiates itself from others by providing those services and products at a lower cost and with more professionalism, courtesy, and humor.
Southwest’s customer-centric approach starts with its staff. The airline is always looking for
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Southwest airlines is now the nation’s largest carrier in terms of originating domestic passengers boarded according to the most recent data available from the U.S transportation. The carrier offers flights to some of the world’s most popular destinations. They also operate the largest fleet of Boeing aircraft in the world to serve 93 destinations in 40 states, the District of Columbia, the Commonwealth of Puerto Rico and five near international countries which are Aruba, Bahamas, Jamaica, Dominican Republic and Mexico (Swamedia, 2015). Another key point to Southwest’s successful operation is that they only employ one type of aircraft, the Boeing 737. By resisting the customary practice of employing numerous types of aircrafts, the carriers can save on operational costs such as training technicians and focus on other customer-driven needs (Slate, …show more content…
Their success is the reflection of hard work, good customer service, low cost and dedicated people who value business ethics and provide great services. Their secret is to get the basics done right. They lead a smooth operation with one fleet, which results in less technical failure and allows them to meet customers ‘expectations by consistently delivering the following: providing everyone personalized attention, delivering quality and comfort and meeting customers’ expectations, thereby adding value to the flight experience. As the passengers often put it: Not only are the airfares reasonable, but it is FUN to fly Southwest airlines. Indeed, when you make the customer’s experience pleasant and fun, you cannot go wrong.
Recommendations
Indeed, SWA is a great company to work for, fly with and partner with. However, we recommend that they expand their point of sales. We realize that tickets are mostly available on their official website and we would recommend that they have tickets available on different websites such as kayak.com, onetravel.com, cheaptickets.com, priceline.com, and others. Furthermore, we would recommend that in addition to baggage companies, taxi companies should also be available to the cruise lines passengers from the airport to the ports of cruises
Southwest airlines is one of the most widely respected companies among those profiled by Firms of Endearment. They are recognized for having one of the best corporate cultures, which is emphatically encouraged from the top down. Southwest’s model clearly exemplifies the concept of servant leadership, and we will elaborate on how this creates a firm of endearment.
Spirit makes our fares so low because they know that draws in the attention of the consumer. Once they have your attention you’re shocked at the price so you go for the deal, oblivious to the fact that you walked into their trap. Southwest’s symbol for shareholders is LUV while Spirit’s is SAVE. They are not the only companies to start to enter into these paths. Hotels, rental cars and cruises are all faced with the same choice to embrace the LUV or the thriftiness with SAVE (Elliot
Southwest Airlines is one of the biggest United States airlines which prides itself in its low-cost strategy to attract and keep up more clients. On a given day, Southwest Airlines operates over 3,400 flights. It has a more than of 46,000 employees. To reduce maintenance and training costs, Southwest Airlines use only Boeing 737s. As of today the company operates 647 Boeing 737s, which fly to 93 destinations across the US. Southwest Airlines have been able to survive even when faced with stiff competition because of its low cost approach. However, this success has also been attributed to the high level of care and appreciation on its clients and employees.
Another internal challenge for Southwest Airlines is the conflicting management style and business operation with AirTran. On top of that, the external challenges such as the increase of competitions and gas prices are some of issues f...
“Our people are our single greatest strength and most enduring long-term competitive advantage,” reports CEO Gary Kelly on the Southwest Airline website (https://www.southwest.com/html/about-southwest). The company works hard to hire great individuals and then rewards and supports them to make satisfied, productive employees (Ross & Beath, 2007). In fact, Southwest Airlines has received repeated recognition as a great place to work (“Southwest Corporate Fact Sheet,” n.d.). As a result, Southwest Airlines is able to provide a low-cost, fun-cultured experience with excellent customer service (Ross & Beath, 2007). This has allowed the company to build its final strength in this evaluation: a strong brand
Southwest Airlines strategy of focusing on short haul passenger and providing rates as low as one third of their competitors, they have seen tremendous growth in the last decade. Market share for top city pairs on Southwest's schedule has reached 80% to 85%. Maintaining the largest fleet of 737's in the world and utilizing point-to-point versus the hub-and-spoke method of connection philosophy allowed Southwest to provide their service to more people at a lower cost. By putting the employee first, Southwest has found the key to success in the airline business. A happy worker is a more productive one as well as a better service provider. Southwest will continue to reserve their growth in the future by entering select markets only after careful market research.
Also, Southwest is renowned in the airline industry for its short turnaround time on arrivals and departures. And since people's biggest concern nowadays is money and time, having low price airline tickets to cater their traveling needs in a shorter period of time will surely satisfy them. Moreover, aside from the low prices offered, what attracts customers is Southwest’s way of dealing with them. The employees of the airline treat their customers well and really listen to their needs. Southwest Airlines is also well-known for having a very productive and loyal workforce.
Since 1987, when the Department of Transportation began tracking Customer Satisfaction statistics, Southwest has consistently led the entire airline industry with the lowest ratio of complaints per passengers boarded. Many airlines have tried to copy Southwest’s business model, and the Culture of Southwest is admired and emulated by corporations and organizations in all walks of life. Always the innovator, Southwest pioneered Senior Fares, a same-day air freight delivery service, and Ticketless Travel. Southwest led the way with the first airline web page—southwest.com, DING, the first-ever direct link to Customer’s computer desktops that delivers live updates on the hottest deals, and the first airline corporate blog, Nuts About Southwest. Our Share the Spirit community programs make Southwest the hometown airline of every city we serve.
The marketing approach of Southwest Airlines is built upon their strong business model. They have successfully managed to target two specific market segments of the airline industry while remaining profitable. Their strategy is simple, to offer frequent non-stop flights with the lowest costs which appeal to both the business and budget travelers. By segmenting their target audience to specific demographics and ticket pricing, passengers know exactly what they are getting for the price they pay.
Deregulation for 16 years (1978) has resulted in an icnrease of domestic carriers from 36 in 1978 to 100 in 1985.
Southwest has comprehensive strategy and they work with harmony. They are low cost airlines which make the customer feel like royalty. Southwest have a winning strategy is proven by their profit year after year even thought they had economy crisis. Since 1973 Southwest reported a profit each year even when they lost billions of dollars from the year 1980 to 2009 because of the low operating cost strategy, low fares and customer service. Since the start of Southwest they have stay faithful of keeping low cost across the industry. Their value in corporate culture reflected through their prices and customer service.
For years, Southwest Airlines has been experiencing stable costs, low fares and traffic stimulation. However, the latest changes in the marketplace (See Exhibit 1: SWOT Analysis), including the higher energy costs and the entrance of new low fare/cost carriers are threatening the future of the airline. As a result, LUV needs to decide whether or not to acquire the slots and gates from the bankrupt ATA Airlines at LaGuardia (LGA) terminal in New York City (NYC) in order to expand its capabilities.
It all started in 1971, when Rolling King and Herb Kelleher decided to challenge the existing rut of charging high prices for air travels. They considered the railways and roadways their competitors and decided to offer cheaper travel for smaller routes. The company was incorporated in 1967, apart from initial entry troubles, Southwest has been the only US airline to have earned profits since 1973. The eccentric company’s outlandish way of conducting themselves has been the sole reason for Southwest Airlines to succeed in a highly competitive and packed industry.
The mission of Southwest Airlines is a dedication to the highest quality of service delivered with warmth, friendliness, individual pride, and company spirit (Mission…, 2007). The company also provides opportunities for learning and personal growth to each employee. Creativity and innovation is very important and highly encouraged, for the purposes of improving effectiveness. Employees are to be provided the same concern, respect, and caring attitude within the organization that the employees are expected to share with the customer. Southwest Airlines was initially created to be a low-cost alternative to high price of intra-Texas air carriers (Freiberg, 1996). Southwest’s fares were originally supposed to compete with car and bus transportation. It was a little airline, and it would withstand the test of time. As a discount, no-frills airline, it would provide stiff competition for larger airlines. Their strategy was to operate at low cost, offering no food, no movies, no first class, and no reserved seats. They created their own market and provided increased turnaround times at the gate, by avoiding hub-and-spoke airports and opting for short-haul, direct flights. Through this market approach, Southwest has a majority of market share in the markets they serve.
...yees fit within the corporate culture believing that truly fun-loving and spirited employees bring superior customer service through their inherent attitudes that are allowed to shine without the confining regulations and propriety that so many other airlines practice. Southwest employees routinely go the extra mile to help a customer because—by and large—they genuinely care about making people happy. Just as most other wildly successful companies, Southwest’s philosophy agrees that happy employees translates into happy customers and happy stockholders.