Share the Spirit “ A Symbol of Freedom ”
Rollin King
Herb Kelleher
“Herb, let’s start an airline”
“Rollin, you’re crazy. Let’s do it!”
The Napkin Concept
The Mission Statement of Southwest Airlines
Dedication to the highest quality of Customer Service
delivered with a sense of warmth, friendliness, individual pride, and Company Spirit.
Vision Statement of Southwest Airlines
At Southwest, we strive to be the new generation of flight transportation while providing luxury at a price anyone can afford.
• Just say when campaign
• Expands service to California, begins at Chicago’s Midway
Airport.• Acquires a
competitor, Muse Air
1971 1972 1973 1972 -19791967 1982-1985
Southwest Airlines is formed
Southwest was forced to sell one of its four
planes to meet payroll. Employees made up for the lost jet by turning
planes around and starting the next flight in
10 minutes.
Southwest begins service in New Orleans.
Until Congress deregulated the airline
industry (in 1978), Southwest couldn't fly
beyond Texas
Southwest begins flying between Dallas,
Houston, and San Antonio.
Southwest makes money, starting a string of 36 straight profitable
years.
Timeline
1996 2000 2001 20021987 2003
Frequent flier program and Increased number
of Flights.
In 2000,SW placed biggest aircraft order ever, delivery of 94
Boeing737.
the worst year ever for the airlines industry ,SW
posted its 30th consecutive profit
SW started selling through Website
www.southwest.com
September terrorist attacks : SW managed to
post a profit
SW Airlines was the 4th largest US airlines in terms of domestic customers carried
2006 2008 2002
Begins phasing out plastic reusable
boarding passes. New rules after the 2001
terror attacks required boarding passes with
passenger's name.
The Federal Aviation Administration proposes
a $10.2 million civil penalty against
Southwest for using planes that hadn't been inspected for fuselage
cracks.
Congress votes to repeal a law in 2014 that
prevents Southwest from operating long flights from its home base at Dallas Love
Field.
Several planes were later found to have cracks.
Revenue reduced. Kelleher steps down as
chairman.
Southwest launches service in Minneapolis and announces plans to
expand to New York's LaGuardia Airport, Boston's Logan Airport, and Milwaukee.
2009
SWA Divided the US passenger Airline Market into 3 categories:
1) Major Carrier• annual revenue 1billion; 95% domestic passengers carried • 80% all major carrier domestic
2) National Carrier • annual revenue 100million-1billion
3) Regional and Commuter Carrier • annual revenue less than 100million
• In 1978, the United States had 36 domestic carriers• The major carriers adopted the hub-and-spoke route system, SWA
adopted point-to-point route system.
•
Bold & Creative Advertisements
This is how SW Airlines replies to
their Competitors
CUSTOMERS
EMPLOYEES
MANAGEMENT
Inverted Pyramid Approach
‘Keep it Simple’ Business Model
They are known forSparse customer amenities
No seating class distinctions
Fewest customer options
No choices on type of aircraft
Simplest pricing structure
no meals
But, they are very well known for
Providing safe, Reliable, Short duration air service
Lowest possible fare
Good schedules for destinations served
Fewest cancellations
Best on-time performance
Safest airline worldwide
Fastest gate turnaround
Simplest customer-interface
Highest customer ratings
Most consistently profitable
“ The Fantastic Fifteen ”
SW:Anatomy of a 15-minute Turnaround
7:55 Ground crew chat around gate
position
8:08 Boarding call ,baggage
loading, refueling complete
8:03:30 Ground crew move to their vehicles
8:07 Passenger off
plane
8:04 crew moves towards gate
8:06:30 Baggage unloaded, refueling
8:15 Jet way retracts
8:10 Boarding complete. ground
crew leaves
8:15:30 Pushback
from backs
8:18 Pushback disengages plane leaves for runway
How SW strategy is Implemented
Passenger related
departure
Very low
ticket prices
No site assignments
No baggage transfer
No connection with other
airlines
No meals
Short haul, point to
point travel
Limited Passenger
service
High aircraft
utilization
What Makes Southwest Unique?
Southwest Airlines has become a legendary example of the power of servant leadership principles.
Its achievements are impressive considering the competitive, cut-throat airline industry in which it thrives.
Southwest Airlines has been named "one of the "Top Five Best Companies to Work for in America" by Fortune Magazine
It has had the fewest customer complaints 18 years in a row as reported by the DOT Air Travel Consumer Report
The Southwest Airlines has been profitable for 31 consecutive years, named the "2nd Most Admired Company in America by Fortune Magazine, and has an average employee turnover rate of less than 10%
If you made a $10,000 investment in Southwest Airlines in 1972, it would be worth more than $10 million today.
It has developed strong employee and customer loyalty - a feeling of devotion, duty and attachment to Southwest (West, 2005)
Southwest’s 10 Practices for Building High Performance Relationships
SUCCESS IS HOW HIGH YOU BOUNCE WHEN YOU HIT BOTTOM
WHY IT IS SUCCESSFUL ?
Competitive advantage
Internal customers
Management style Leadership
Work-culture
Family spirit
Trust
Training
Collective bargaining
Creative spirit
Discounted stock purchase
Flexibility
Open sharing of information
SWOT
•low-fare, high frequency airline committed to exceptional customer service.• great climate and culture for employees, “We hire Attitudes.”•Excellent service in the areas of on-time performance, baggage handling, and overall customer satisfaction.•SW has 481 Boeing 737 jets.
•No hub-and-spoke system (although considered by many to be a positive)•No first class seating•Fly only in USA , 63 cities and 32 states.•Uses only one type of planes.•Lack of unity in decision making ability.
•Hire more part time workers•Provide higher quality and luxuries for customers willing to pay extra•With airline companies selling planes SW can purchase models similar to the 737•Add new cities not flown to by Southwest such as Atlanta, Charlotte, Chicago, and New York
• Mergers and takeovers of other airlines could produce low-cost challenges to Southwest by those competitors•Government regulations and restrictions, Fluctuation in gas and oil prices• New entrants into the airline industry is an extremely low risk, due to the costs but it still prevails.
STRE
NG
THS
OPP
ORT
UN
ITIE
SW
EAKNESSES
THREATS
1) For the 12th year in a row, FORTUNE magazine recognized Southwest Airlines in its annual survey of corporate reputations in 2008.
2) 2003 Selected as “AIRLINE FOR THE YEAR”
3) 2007 included in top 100 most innovative technology organization
4) First airline to establish a home page on internet
5) Ranked number one in customer service
6) 36 consecutive year of profitability
ACHIEVEMENTS
7. ONE OF THE TOP 50 BEST PLACE TO WORK-AT 12TH PLACE.
8. GRASSROOTS INNOVATION AWARD -2013.
9. AIRLINES RATING IN LOW COST-AT 2ND PLACE.
10. IN WORLS MOST ADMIRED COMPANIES AT 7TH PLACE IN 2013.
11. TOP 25 Brands of 2013, AT 1ST
12. AT 1ST PLACE IN CUSTOMER SATISFACTION-2013.
13. U.S TOP 100 GLOBAL REPUTATION PULSE-AT 46 PLACE.
ALASKA AMERICAN WEST
SOUTHWEST US AIRWAYS DELTA UNITED AMERICAN
OPERATING INCOME (in $Mn) NaN 11 -56 291 20 -114 -469 -760
-900
-700
-500
-300
-100
100
300
OPERATING INCOME (in $Mn) in 2001OPERATING INCOME (in $Mn)
Operating income
ALASKA AMERICAN WEST SOUTHWEST US AIRWAYS DELTA UNITED AMERICAN
NET INCOME (in $Mn) NaN 5 -43 176 -24 -90 -365 -507
-550
-450
-350
-250
-150
-50
50
150
250
NET INCOME (in $Mn) in 2001NET INCOME (in $Mn)
Net income
CURRENT STATISTICS OF SOUTHWEST AIRLINES
Cities
Daily Nonstop Cities
Served
Year
Departures Established WN FLChicago (Midway)
233 64 1985 1994
Las Vegas 210 54 1982 2003
Baltimore 206 57 1993 2001Denver 167 56 2006 2003Houston (Hobby)
161 45 1971 1997
Phoenix 162 46 1982 2007Atlanta 165 44 2012 1993Dallas (Love Field)
124 18 1971 -
Orlando 120 43 1996 1998Los Angeles 109 23 1982 2003
Type Number
BOEING 737-300 122
BOEING 737-500 15
BOEING 737-700 425
BOEING 737-800 52
Credits:
KASHYAP SHAH
VINITA GOSWAMI
VRINDA JAIN
ANUBHUTI GUPTA
MANISHA NANDAL
MANTHAN JANI
SRIRAM KRISHNAMURTHY
Thank You !- Have a safe journey…