...------------------------------------------------- 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 spirit...
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...THE AIRLINE DEREGULATION EVOLUTION CONTINUES The Southwest Effect [pic] Prepared by: Randall D. Bennett James M. Craun Office of Aviation Analysis U.S. Department of Transportation May 1993 Table of Contents Major Findings 3 Southwest 4 Industry Structural Changes 5 The Southwest Effect 6 The importance of new entrants 8 Appendix A: Charts 10 Chart 1 10 Chart 2 10 Chart 3 11 Chart 4 11 Chart 5 12 Chart 6 12 Chart 7 13 Chart 8 13 Chart 9 14 Chart 10 14 Chart 11 15 Chart 12 16 Chart 13 16 Chart 14 17 Chart 15 17 Chart 16 18 Chart 17 18 Chart 18 19 Chart 19 19 Chart 20 20 Chart 21 20 Chart 22 21 Chart 23 21 Major Findings: The principal driving force behind dramatic fundamental changes that have occurred and will occur in the U.S. airline industry over the next few years is the dramatic growth of low-cost Southwest Airlines: • A return to profitability hinges on developing lower-cost services in short haul markets and increasing fares in longer-haul markets: • Other major airlines are giving up competing with Southwest's low-cost service for market share. Southwest's continuing expansion will force other airlines to bring about a major change in their cost structures by developing new, low-cost services in short-haul...
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...Analysis of Strategic Structure of Southwest Airlines Uploaded by so cerious on Jun 26, 2006 [pic] |Analysis of Strategic Structure of Southwest Airlines | | | |Twenty-nine 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. | | | |Within 28 years, Southwest Airlines became the fifth largest major airline in America. With the addition of service to Buffalo-Niagara | |International Airport on October 8, 2000, fly more than 57 million passengers a year to 57 great cities (58 airports) all over the | |Southwest and beyond. And she does it over 2,600 times a day. | | ...
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...Southwest CEO Rashanna Brown MAN103 September 13, 2013 Jean Anderson Southwest CEO The different cultures at southwest airlines that are displayed is, they are always being very serious and cautious about keeping their coast down, they are committed to provide their employees a stable work environment with equal opportunity for learning and personal growth. Southwest airlines are dedicated stated in their mission to high quality customer service delivered with warmth, friendliness, individual pride, and company spirit. None of their employees has ever gone on strike. Southwest Airlines leads industry in on time performance. Through the year 2002 their stock prices has increased for the preceding ten year period. One of southwest missions was to always be dedicated to the highest quality of customer service. The effective skills that Kelly possess that makes him an effective leader is he shows the customers that he care by talking to them and also remembering all the employees names. Kelly always makes sure things are done in an orderly fashion, not only for his benefit, but for the benefit of the company, employees, and customers. Kelley treats his customers as king and queen, but he treats his employee’s even better than the customers, that is a true team leader and in this conclusion Kelly also does things to save the airline money by locking up fuel hedging contracts that results in paying less for jet fuel than competitor airlines. Some of Southwest Airlines’...
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...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 renovate...
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...Running head: VALUES AND ETHICS: SOUTHWEST AIRLINES Values and Ethics: Southwest Airlines University of Phoenix Management 521 Abstract Personal values and organizational values are important concerning decisions for any company. Those values and the decision-making style of one team member, based on the Williams Institute Ethics Awareness Inventory Assessment, correlates with the organizational style of Southwest Airlines, as discussed in this paper. Ethics, values, and character are critical components of any successful company. Companies that operate by any different perspective usually are unsuccessful. The challenge of any manager is to make sure that all his or her employees understand that ethics, values, and character are the building blocks of how he or she will conduct business every day. In order for employees to follow these guidelines, managers must conduct themselves the same way. Values and Ethical Decision Making: Southwest Airlines Personal, organizational, and ethical values play an important role in the decisions we make in the workplace. People have their personal values just as companies have their organizational values. Therefore, when the two are combined and an ethical decision is made, it can be difficult to make a decision without breaking the morale of the company as well as his or her own personal values. The challenge each day for every manager is to develop a cohesive balance between ethics and values. This difficult process involves...
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...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...
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...Leadership is the most important thing when it comes to running any kind of business or organization. Southwest Airlines is one of America’s favorite airlines and this could be contributed to the type of leadership that the company has had and still has. Herb Keller, cofounder and former CEO, set certain core values that helped the company gain the success that it still has today. The leadership style of connecting with employees and connecting with customers has also helped the company stay afloat during a time when all other airlines seemed to be under the storm. This goes to show us that maybe at the end of the day it is all about the leadership that you choose to have for your company. To me Herb Kelleher was a visionary leader more than he was a servant leader; he looked more towards the future of the company. The success that Southwest Airlines has today comes from the core values that were developed by Herb Kelleher. “Kelleher is one of those rare birds: an entrepreneur who managed to create a successful startup, then stuck around to build it into a huge corporation” (Reingold). This shows that Kelleher was always thinking about the future of the company which makes him a visionary leader. The most predominate leadership style at Southwest Airlines would be the affinitive leader, which means the company uses harmony more than anything else to solve any conflict that many arise. One can see this by first looking at the company’s NYSE stock sticker symbol, which is LUV...
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...1. Main Issues Analysed Should Southwest airline acquire the slots and gates vacated at La Guardia terminal in New York City? This problem should be analyses in three different dimensions: a. The Company culture/Values One of Southwest airlines strengths was their low-fares, costumer oriented politic and fun employees. In Kelly words: “outstanding, passionate, caring, customer service combined with an efficient, simple, low-fare costumer experience provide with reliability and operating expertise.”” The service should be memorable and inexpensive to deliver”. They recruited people with “personality” for the airline. Employees capable of using good judgment to implement southwest´s policy. To captivated employees they gave good pay waves and the opportunity to participate in the company´s success through profit-sharing and stock ownership programs. According to the article “the organization was imbued with a sense of ownership.” To keep such good staff the southwest airlines need to keep growing. But moving to an airport like La Guardia they could not be able to guaranty the same experience especial due to delays and this alone could harm the brand. b. Uncertain demand/Competition With 9/11 the demand was affected and the completion increase as legacy airlines adapt to the new to new reality and internet made easier for customers to compare fare and new low-cost carriers that have lower labour rates enter the market. The Market is evolving and demanding more at...
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...characterize the business model of Southwestern Airlines? How does this differ from the Business model used at many other airlines, such as United and American Airlines? 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. 2.) Identify the Resources, capabilities and distinctive competencies of Southwestern Airlines. Southwest Airlines faced many barriers to entry from the fierce competition of other airlines in the industry. Though competition was fierce, Southwest Airlines managed to succeed by doing things differently. Their mission was to provide affordable air travel to those who would not normally fly. Contradictory to the rest of the airline industry, Southwest maintained a profit while keeping its fares low. Southwest was unique to the industry in two ways. They focused...
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...Introduction Both Southwest Airlines and Semco are successful organizations in their own market segments despite the economic struggles in 1980’s and 1990’s. Southwest Airlines began operating in 1971, its primary operating philosophy is low fares and lots of flights. Much of organization’s success is due to the willingness of its leadership to be innovative. Semco founded by Antonio Semler in 1912, was traditionally managed industrial equipment company. SEMCO is located in Sao Paulo, Brazil. Richard Semler, instituted an employee-friendly and employee empowered management system. Semco’s success is basically attributed to three interdependent core values: employee participation, free sharing of information and profit sharing. Case Study It is widely discussed that both companies share success factors that make them market leaders. Non-conventional organizational structure Non-conventional organizational structure is adopted in both organizations. SMA and Semco both break the rules of hierarchy structure and bureaucracy. SMA adopts decentralized organizational structure. ‘ the company cuts across hierarchical and job distinctions’ (Child). Team work, group decision making, training and stress on positive attitude are greatly embraced at the organization. Job specialization doesn’t go as far with other airlines like it does with Southwest. An example of this is in order to reduce the turnaround time, pilots help to clean the aircraft which rarely ever happens. Also...
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...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 with...
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...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...
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...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 company's...
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...Introduction Southwest Airlines is a major airlines company which provides air transportation to the people in U.S. It is headquartered in Dallas, Texas, and employs 34,901 people. It was co-founded in March 16, 1967 as Southwest Co. by Rollin King and Herb Kelleher initially named Air Southwest until changing the name to Southwest Airlines in early 1971 (matthew, n.d.). The main objectives of the firm was to attract the passengers by providing convenient schedules, taking people to their destination on time, and charging fees compatible with their automobile. Their target market is the business travelers and price- sensitive leisure travelers. There are a number of strategies of the company. The company is known among the top market leaders by following the low-cost differentiation strategy. Their tagline “Freedom to Fly” gives them another advantage. They provide fare promotions to stimulate ticket sales on flights. Passengers do not have to pay for their bags. In addition to that, there are special benefit programs like frequent flyer program giving rewards like Standard Rewards which include a free round trip if the passengers earn 16 credits in 24 months. Similarly another reward like Companion Passes gives the passengers a free round trip if they earn 100 credits in 12 months. (Hadi, 2012) Furthermore, they plan to expand to new geographical markets and adding flights to those areas where their rivals are cutting back services. There is huge competition in the airline business...
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