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Strengths and weaknesses of southwest airlines
Strengths and weaknesses of southwest airlines
Strengths and weaknesses of southwest airlines
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Southwest Airlines roots can be traced back to Texas in the 1960’s where a company by the name of Air Southwest Co. was created to provide interstate flights in Texas to avoid federal aviation laws. This technique of trying to avoid federal regulation was challenged when 3 other major airlines filed a lawsuit against Air Southwest Co.; later the state of Texas upheld Air Southwest Co. right to fly within the state of Texas and the Supreme Court decided not to review the case. (Southwest Airlines, n.d.) This was a challenging start for Southwest as it was being targeted right off the bat by some of its competitors. The company name was changed in the early 1970’s to Southwest Airlines Co. and a headquarters was established in Dallas, TX. The company’s main focus was interstate flights between the 3 major cities in Texas including Dallas, Houston, and San Antonio. (Southwest Airlines, n.d.)
Southwest Airlines founder Herb Kelleher studied other airlines to try and figure out what culture he wanted to bring to Southwest Airlines. Herb Kelleher and President Lamar Muse ended up using a model copied almost word for word from an airline out of California called Pacific Southwest Airlines. (Southwest Airlines, n.d.) Pacific Southwest Airlines (PSA) motto was pretty simple as they wanted to also be known as the “The World’s Friendliest Airline” You could tell PSA wanted to be the friendliest airline by the big smiley face that was on the front of each of the companies Boeing 727 airplanes. (Pacific Southwest Airlines, n.d.) Kelleher and Muse saw the success that the culture brought to PSA and they wanted to bring that success to Southwest Airlines. Muse later confessed that creating the operations manual for Southwest Airlines was pr...
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...ed May 5, 2014, from http://www.forbes.com/sites/carminegallo/2014/01/21/southwest-airlines-motivates-its-employees-with-a-purpose-bigger-than-a-paycheck/
Southwest Airlines. (n.d.). In Wikipedia. Retrieved May 5, 2014, from http://en.wikipedia.org/wiki/Southwest_Airlines
Pacific Southwest Airlines. (n.d.). In Wikipedia. Retrieved May 6, 2014, from http://en.wikipedia.org/wiki/Pacific_Southwest_Airlines
Mouawad, Jad. (2010, November 20). Pushing 40, Southwest Is Still Playing the Rebel. The New York Times. Page BU1. Retrieved May 7, 2014 from http://www.nytimes.com/2010/11/21/business/21south.html?pagewanted=all&_r=0
Southwest Airlines. (2014). Southwest Citizenship. Retrieved May 8, 2014 from http://www.southwest.com/citizenship/
Southwest Airlines. (2014). Ellen Torbet. Retrieved May 8, 2014 from http://swamedia.com/channels/Officer-Biographies/pages/ellen_torbert
As the project management triangle states, “do you want something done good, cheap, or fast?. Pick two!” That had been the constraints applied to many businesses until the launch of Southwest airlines in the mid 1960’s. Southwest managed to break free of the management triangle and offer safe (good), low cost (cheap), and timely (fast) air service in Texas and eventually across the United States. From the beginning, the company’s staff and management shared these goals, and developed a foundation on which to build the business. Visionary leaders Rollin King, Herb Kelleher, Colleen Barrett and other early leaders at Southwest, proved that there is no more competitive advantage than a dedicated, loyal work force. Her Kelleher’s transformational leadership style was just what the new airline needed to be successful, and motivate the staff of SWA to do what no other airline had done before: offer cheap, short distance, no frills air service, and make a profit doing it.
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...
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.
Founded by Rollin King and Herb Kelleher, Air Southwest Company was created in 1967 to fly within the state of Texas. On March 29th, 1971 Air Southwest Co. changed its name to Southwest Airlines Company with headquarters located in Dallas Texas. Today, Southwest Airlines serves over 94 destinations across the United States making it a major player in the domestic airline industry. Southwest ended the 2014 year by servicing 93 destinations within 40 states, Washington DC, Puerto Rico, and the five near international countries of; Mexico, Jamaica, The Bahamas, Aruba, and the Dominican Republic. At the end of 2014 Southwest operated a total of 665 Boeing 737 after phasing out older AirTran models.
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.
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.
This has rattled the global financial markets. The stocks of the airline industry have been hit very hard whereby fears of the demand for traveling are slackening. It is expressed by the International Air Transport Association, there are expectations for the passenger market of the U.K. to shrink by 2020 in the band of 3—5% due to the Brexit materializing, (Inkpen & Degroot, 14). The strategy of the Southwest Airlines is to focus on a short-haul passenger and to provide rates that are as low as a third of the competitors. Its HRM strategy is to be using the business model that is very straightforward and rather than having a hub-and-spoke service, they have a point-to-point
One of Southwest Airlines’ operations resources is their flight point-to-point service to maximize its operational efficiency and stay cost-effective, where its aim is to keep their aircrafts in the air more often to achieve better capacity utilization. Another resource that they have is the consistent aircrafts that they employ, in which they only use one type of aircraft , the Boeing 737 jets. By maintaining a single model fleet, it significantly simplifies scheduling, operations and flight maintenance. Then training costs for pilots, ground crew and mechanics are not as high, due to the fact that there's only a single aircraft to learn. This then makes the purchasing, provisioning, and other operations vastly simplified and thereby lowering costs. A third operations resource that they have is their airport operations that include the following: “Ramp Agents, Operations Agents, Customer Service Agents, Provisioning Agents and Cargo Agents” (Our People). Without them, a flight on Southwest would not go as smoothly as it does now. The last operations resource to consider is Online or E-tickets. This allows the customer to be able to find the flight they want in their own home without the hassle of booking through a travel agent, it is fast and convenient.
Chief executive Gary Kelley has said “the airline has an opportunity to add up to 50 new destinations over the next few years as it continues to grow” (CEO Lays Groundwork). This is a huge step for Southwest and will allow them to stay competitive in the industry. They are also looking at having more straight flights available to states within the United States that cut out layovers. This would increase customer satisfaction and retention. Looking at aspects such as customer satisfaction is a big way for Southwest Airlines to stay competitive. The low-fares and customer satisfaction is what Southwest Airlines is built on, and in order for them to stay competitive, they must maintain that foundation. Just in their slight mess up in 2014, they were able to see how important pleasing their customers actually is. It did not take them very long to reverse their actions. When it is all said and done, making more money by cramming flights together was not cost effective considering the loss of customers. It is also important for Southwest to continue innovation and creativity. In a competitive industry that is always changing, they will need to stay up to date and fresh when it comes to new ideas. They should continue looking at ways to grow and expand, without giving up any of the aspects that make them the successful company that they
Southwest Airlines is a fairly impressive organization. Throughout their history they have proven to be resilient. In their early days they had to ward off pressures that were placed on them from the more dominant airlines in their area. These airlines tried to force them out of business using regulatory pressures. The second impressive show of resiliency came when in the 1970’s the government tried to force southwest out of Love Field to the new Fort Worth airport that the government had invested in heavily. Another impressive feat of the airline is its can-do attitude. Throughout it’s history even when things were dire they still persevered. In my experience this is a monumental task as it is so easy to breed negativity instead of being positive about outcomes. Lastly, it is very impressive that Southwest was able, even in these trying times, to lower fairs and provide excellent customer service. Ideas such as their $10 fair Houston-> Dallas flight proved to be more successful than anticipated.
Southwest has done what others in its industry seem to struggle to do, which is to make flying fun. This has been the cornerstone for how the Southwest operates, thinks, and plans. Many of the policies, procedures, and practices Southwest has used are aimed directly at providing patrons with a unique, fun, and enjoyable experience. This value and the effort Southwest has made to place customers at the forefront of its plans and strategy, has paid off as the company is one of the most popular and well-respected in the transportation industry.
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.
This chapter will focus on defining the creative marketing and organizational culture theories that correspond to the stated hypothesis. The necessities identified regarding these subjects will provide a clear understanding of what Southwest needs to address to regain its competitive advantage. A comparison of other organizations that also experienced marketing and/or cultural issues will be presented. This chapter will additionally compare the management strategies implemented by those businesses and their outcomes. Implementing comparable strategies will provide Southwest Airlines with the necessary strategic plan to reverse its current situation.
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.