A Tale of Southwest Airlines

A Tale of Southwest Airlines

Jeffrey A. Harden

Com/530 Communications for Accountants

6 Oct 14

University of Phoenix

A Tale of Southwest Airlines

A relative newcomer in the airline industry, Southwest Airlines (SWA) has become a model for rivals in the business. Three passions set by senior leadership are performance, people, and planet.[1] By incorporating a different strategy and operations concepts, they have changed the market place. Founded on two principals that govern, strategy and culture Southwest Airlines have set a new trend in the market place.

Strategy

Founded in 1971 by H. Kelleher and R. King, Southwest Airlines (SWA) started with four airplanes serving the Texas area. By 2009 the airline has reached fourth highest in the market, supporting revenue of $9 million dollars.[2] Since 1987, Southwest Airlines has fewest customer grievances and best on-time record plus ranked on the top of the Fortune magazine’s “Top 100 Best Companies to Work for in America”.[3]

What lead to these achievements? The model that changed the industry was a decision to change from usual business that other airlines were using and not making a profit. Their idea was to move airplanes and passengers point to point versus the major hub to major hub approach used by major airlines to profit on longer flights. Using a point to point means needing to have quick aircraft turnaround, no inflight services, highly coordinated staff on both ends and one type of selected aircraft to reduce maintenance costs. Southwest Airlines mostly directed by its senior leaders, worked extremely hard to develop a strategy that resulted in less (more self-service) but positive interactions at the gate and throughout the group categorized by working hard all the time, setting attainable goals, communication and respect for each other and customers. The culture also emphasized excellent (though “no frills”) customer service.[4] Fewer services provided at each...