Southwest Airlines Corp Case

Southwest Airlines Corp.

Southwest's Basis for Competitive Advantage : Southwest had the lowest operating-cost structure in the domestic airline industry and consistently offered the lowest and simplest fares. It also had one of the best overall customer service records.

Strategies:

Short-Haul

Instead of using "hub-and spoke" approach as United American and Delta, Southwest uses short-haul with average flight time of 55 minutes and point-to-point flight such as Dallas to Houston and Los Angeles to Phoenix.

Low and simple fare

Southwest had no assigned seats, paid its crews by trip and used less congested airports. By using online booking system via southwest.com, it saves the booking cost from $6-$8 through a travel agent down to about $1 via the Internet.

Un-unionized pilots

Southwest pilots were the only pilots of a major US airline who did not belong to a national union which allowing them to fly far more hours than pilots at other airlines. Contracts of other workers were flexible to allow them to jump in and help out.

High frequency/Efficiency

It takes about 20 minutes and six employees at Southwest for the plant gets ready for takeoff from the time it landed, while United Airlines take about 35 minutes and 15 employees for the turnaround.

Control systems:

Putting employees first

Southwest employees were among the highest paid in the industry and Southwest's walls were filled with photographs of its employees. The good pay and friendly working environment results low employee turnover relative to the airline industry. Employees will be trained at its University of People. In-flight contests will be held to encourage employees for better performance. Recognition of personal initiative will reward employees with good performance.

Hiring process

The hiring process in Southwest in unique. Southwest first interviewed its top employees in each job function such as pilots, gate agents, ground crew and so on and identify their common strengths...