Before David Neeleman’s non-compete agreement with Southwest Airlines expired, he envisioned the concept of starting a low-fare airline that would combine common sense, innovation, and technology and bring the humanity back into air travel (Gittel & O’Reilly, 2001). In 1998, JetBlue was born. In order for David to fulfill his goal of a “do-it-right” kind of airline, he needed to recruit superior industry veterans who were willing to start from scratch and place an emphasis on employees and customers. Each of these individuals, from the President, General Counsel, CFO, and the HR director, wanted to create an airline that was fun, had integrity, was safe, and cared for their employees, plus had a passion to get it right (Gittel & O’Reilly, 2001).…
Southwest Airlines’ corporate culture differs significantly from the other airlines in many ways, as we shall see herein below. The unique difference between the corporate culture of Southwest Airlines and the other airlines is one of the major factors responsible for the prosperous survival of Southwest Airlines. There is a fierce competition in the airline industry. Perhaps because of this competition, companies that are established in…
Even with legal and financial problems in the beginning, “morale and enthusiasm remained high; company personnel displayed can-do attitudes and adeptness at getting by on whatever resources were available.”5 The key to success in the airline industry was not only low prices but market visibility. Southwest was willing to take risks to gain that visibility by employing gorgeous flight hostesses who wore colorful hot pants and knee-high boots which attracted customers, free alcohol to any ticketholder over 21 and their wildly popular “LUV” campaign. “Southwest reported its first-ever annual profit in 1973.”5…
Southwest Airlines strict adherence to its mission to provide the highest quality of customer service delivered with a sense of warmth, friendliness, individual pride, and company spirit is a key factor to the company’s success (About Southwest Airlines Co, 2013). The airlines ability to commit to employees to provide them with a stable work environment that ensures equal opportunity for learning and personal growth. Southwest prides itself on allowing all within the company to be creativity and innovative to help improve the effectiveness of Southwest Airlines. The most important benefit, employees will be provided the same concern, respect, and caring attitude within the organization that they are expected to share externally with every Southwest Customer.…
This internal business analysis is on Southwest Airlines, which was founded in 1967 by Rollin King and Herb Kelleher. The main focus for Southwest Airlines was to provide low cost flights for their customers, and also have exceptional customer satisfaction. Southwest is a leading airline company that continues to do well in an industry that has been historically challenging. For instance, in the span of two years (2005-2007) five major airlines have filed for bankruptcy. The challenges are great in the airline industry, because competitors are trying to imitate the “low-cost” offering of Southwest. Many companies have tried to do what Southwest has done, and many have failed to stay in business. Surprisingly, many of those companies were started by ex-employees of Southwest. Southwest currently has a profitability record for the past thirty six years, which is spectacular in such a challenging industry. Herb Kelleher has been replaced by Gary C. Kelly, as the president when he resigned in May of 2008. Southwest is in the process of expanding the locations they serve so that they can increase market share, and also find ways to cut costs without losing their quality. In order for southwest to continue their consecutive financial success there is a necessity for excellence in the execution process of their strategy.…
Southwest’s relentless commitment goes beyond the lip service most companies uphold. From line level to the C-suite, everyone works hard to ensure customers feel they are the center of attention. Flight crew routinely exceeds passengers’ expectations to the point it has become routine. Attendants feel encouraged to be creative. They feel their duties entail not just standard tasks, but going further to ensure customers are entertained or engaged in other ways that would ‘infect them’ with Southwest’s positive energy. Senior management does its part by, for example, doing everything to keep prices as low as possible low and using fees for special services only as a last resort.…
Classic Airlines has is ranked in the top five of the world’s largest airlines. As one of the largest, it does not come without its company concerns of daily operation and consumer insight. Classic’s consumer rewards program has seen a 19% decrease in members and among those remaining a 21% decrease in booking flights (University of Phoenix, Classic Airlines). Finding the proper balance between consumers and the company, and remaining there continuously is the challenging part of business. Classic Airlines has much to change and not just one course of action could be the proper adjustment to boost the sales figures.…
Despite the challenges SWA faces, I am optimistic about the future of SWA. For 30 plus consecutive years Southwest air has been able to sustain its advantage and profit, while not falling into the growth trap. The company’s financial stability enables it to finance new ventures and pursue innovative technologies. The internal strengths of Southwest Airlines are vast and include a great work climate for employees. They are heralded as one of the greatest companies to work for due to a strong internal support network for employees. The culture and image of the company are also widely known to and favored by…
As Southwest continues expanding, it is important that they maintain the low cost structure that has made them so successful historically. As larger and more congested destinations are added to Southwest’s routes, they must focus on customer service as the on-time arrivals and other metrics are certain to deteriorate. Additionally, in order to protect from volatile fuel prices, it would be prudent to expand the fuel-efficiency of the fleet by capitalizing on Boeing’s most recent advances. Southwest must also maintain its position as the “hassle-free” low-cost carrier, with more subtle method of collecting additional fees than checked baggage and reservation changes.…
The airline industry is highly cost-driven creating an extremely competitive environment in which to operate. The majority of customers prefer an inexpensive and hassle-free airline experience; for those business customers who previously paid for the extra features, such as first class, the ability to reduce costs has become more important causing them to consider finding lower priced business class seats or flying coach instead. This trend is referenced in Exhibit 1. The airlines which have focused on building their business model to provide a unique or exceptional flight experience in…
The U.S. airline industry has proven to be one of the least profitable in the entire world. It has been plagued by fierce competition and destructive price wars, extraordinary fixed costs, and heated labor relations. Despite these numerous challenges, Southwest Airlines has been able to stand out from the competition and has established itself as one of the only consistently profitable airlines, with a record of twenty-one straight profitable years and stock earnings that have only been rivaled by Wal-Mart. Southwest’s success can be attributed to a combination of a number of factors, including a strategy that lowers costs for itself and its customers, a liberal and fun focused culture, an extremely motivated and loyal workforce, and a highly coordinated and team oriented system that spans across the company. These four components, and their related elements, fit into the organizational behavior diamond framework to reinforce each other and form the basis of Southwest’s competitive advantage over its rivals.…
Despite operating in one of the most unattractive industries, Southwest Airlines has being very successful in its operations. Its operational success can be attributed to the use of a single aircraft type by the airlines targeted at minimizing the maintenance as well as the operational costs (Jackson et al., 2011). The airline also targets the smaller as well as the less congested airports to minimize delays as well as schedule disruptions. The aircrafts are easily turned around easily minimizing the time spend on air and this is accomplished by minimizing meal services as well as the seating assignments. However, although these are attributed to e the primary reasons behind the aircraft’s success, initiatives by other aircrafts to copy the…
Since its very first round of commercial flights in the summer of June 1971; Southwest was initially founded on the basis as a “low-cost” provider without compromising quality of service.. Its popular low-fares made air travel more affordable that captured an underserved demographic proportion, especially during the economic “melt-down” of 2008 (Gamble & Thompson, 2008).…
Southwest Airlines was founded more than 36 years ago by Rollin King and Herb Kelleher who decided to create a different type of airline. Rollin King and Herb Kelleher started with the simple idea: “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” (SWA, August 2007, ¶ 1). This is an examination of what sets Southwest Airlines apart from the industry standard…
Southwest Airline started out in 1967 and has been different even from its inception. The airline flew to three cities at first and allured customers with flights that departed and arrived on time at the lowest rate possible. This was important to business people that needed to get to and from Dallas, Houston, and San Antonio on business (History, 2013). It was also important to make sure people had a good time while traveling and dedicated their business to a high quality of customer satisfaction. Southwest success has been built on a cocktail of low costs, low fares, frequent flights and a rapid expansion to new cities. But with the high fuel prices, growth has been harder to find, and analysts have questioned whether…