Southwest Airlines1
Southwest Airlines was formed in 1971 to serve inter-city routes in three Texas cities. By 1998, it had grown to approximately 24,000 employees serving 25 states with approximately 2,500 flights per day. Southwest operates as a low-cost, no-frills but high customer service airline flying point-to-point, rather than establishing the hub-and-spoke system common to its larger competitors. A key to its success is the achievement of low turnaround time—the time required for a plane to land and take off again—which requires a high level of teamwork, coordination, and flexibility among different employees and occupational groups. To accomplish this advantage, the company works hard at maintaining a culture that emphasizes flexibility, family orientation, and fun. It has been highly successful, generating profits each year since it was founded and realizing significant appreciation in the value of its stock over the life of the company. Southwest’s quality and productivity serve as benchmarks for the industry. It consistently ranks at the top of the various quality measures—including on-time performance, baggage handling, and customer complaints.
Employee Relations
Nearly 90 percent of Southwest’s workforce is organized into nine unions. Four—the pilots and three small technician unions—are independent organizations. The flight attendants and ramp workers are represented by the Transportation Workers Unions (TWU), the customer service and the reservation agents are represented by the International Association of Machinists (IAM), and the mechanics and cleaners are represented by the Teamsters (IBT). The company has enjoyed highly cooperative and peaceful labor relations since its founding. Its founders were not opposed to unions and essentially invited them into the organization. However, management has also worked hard to ensure that the unions