‘Our People Are Our Single Greatest Strength And Most

Enduring Long-Term Competitive Advantage.’

Gary Kelly, CEO Southwest Airlines

Started in 1971 with little money but lots of personality.

Featured a bright RED HEART as its first logo.

Advertising showcased its focus on Low-Fares, Frequent

flights, On-time arrivals, Top safety record and how Bags

fly free.

Used humour to poke itself to convey its warm personality.

Personalized aircrafts such as a Flying Killer Whale, The

Texas flag and the Slam Dunk One.

United States’ MOST admired airline!

Profitable for 37 years straight!

One of Top 5 places to work!

BUSINESS MODEL

Southwest Airline streamlines operations which results in low fare and

customer satisfaction. The airline takes several steps to save money and

passes the savings to the customers through low fares!

Flies over 3100 short “point-to-point” trips daily.

Each flight makes an average of 6.25 flights daily.

Purchases fuel in advance to hedge fuel prices.

with fuel hedging!!!

Southwest saved more than

$2 Billion

Extremely fast turnaround service.

Follows a unique boarding system.

Enters new markets other airlines overprice.

Operates Boeing 737s for all its flights.

Makes sure that the planes are light with lighter models of

seats and power washing the engine to remove the dirt.

in fuel cost over just 3 months!!!

Southwest saved more than

$1.6 Billion

Advertisement by Southwest

Has pioneered services and programs such as

same day freight service

Senior Discounts

Fun Fares & Ticketless Travel

• Southwest was the first airline with a web site.

• Ranks on top for customer service.

• Receives the lowest ratio of complaints per

passenger.

Southwest consistently earned profits despite

the various industrial problems.

With such stability, It makes decisions and

adjusts policies which other burdened airlines

may not be able to make.

• Other airline companies pride themselves more

on service.

• Their ticket prices are not cheap.

• They generate huge revenues from the elite

people.

Firstly, Southwest Airlines has to run their

flights even if only half of the seats are full.

In that case the airlines have a risk of earning really

low revenue!

Secondly, South West Airlines is at constant

price wars with its competitors.

Sometimes South West is forced to keep the prices

of tickets really low!

“Our fares can be matched; our airplanes and

routes can be copied. But we pride on customer

service.”

-Sherry Phelps, Director of Corporate Employment

Let’s RECAP

Business Model Unique Model

Steps to Reduce Fares Future Prospects

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DISCLAIMER

Created by Atulya Manuraj, IIT Kanpur during an

internship by Professor Sameer Mathur, IIM Lucknow.