Enhancing Service at Southwest Airlines
Kevin Winstead
Sullivan University
MGT 620
Executive Summary
This proposal addresses the needed steps to be taken in order for Southwest Airlines to see continued growth in the airline industry. Southwest Airlines has been able to remain one of the most profitable airlines in the industry for an extended period of time. Even with the hindrance of the 2001 terrorist attacks involving airplanes and the U.S recession of 2008, Southwest has continued to see strong revenue growth. Meanwhile, other companies were experiencing major losses and in some cases folding. Southwest Airlines has capitalized on the company’s strength of being the top low cost
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Customers are part of the process and taking their roles willingly. For distribution of tickets, initially commission was given to travel agents but later Southwest implemented a “ticketless” (paperless) travel program and later the development of Southwest.com as a means of using the internet to sell travel directly to customers. Southwest was a true pioneer in utilizing the internet, first establishing a website in 1995. This lowered distribution cost.
Southwest has an average turnaround time of 25 minutes. This is quite lower than the industry average. For this success, the factors that were responsible were; an absence of meals on all Southwest flights, a limited amount of checked luggage on Southwest’s typically 60- to 90- minutes flights, a near-uniform configuration for all of its 737 aircraft, a team-oriented approach to ground services with team measures for turning around planes and freedom to do whatever necessary to get a plane pushed off on time with a high speed boarding process.
Southwest has a great reputation of treating their passengers like family, often telling jokes and word games during the flights. Southwest also treats their employees very well, offering a wide range of perks and benefits. Southwest employees are routinely the highest paid in the industry.
Average First Year Airline Pilot Salary
Source: AirlinePilotCentral.com, an industry career page (Aug, 2011)
Problem:
Southwest Airlines is based in Dallas and founded in 1971. They are known for their higher airfares and good customer services. (Elliot) The employees are known to be social with the travelers. They often times make changes and waive airline requirements. (Elliot) For example: “Robert Siegel and his wife scheduled a
Southwest Airlines Co., established in 1971 by Rollin King and Herb Kelleher, began its operations with only three Boeing 737 aircrafts. It is headquartered in Dallas, Texas(Hawkins, Misra, & Tang, 2012). Southwest is well known as one of the largest low-cost carriers. With this strategy, the company has dramatically grown up and deeply rooted in the US airline industry. Now, Southwest Airlines Co. operates 633 aircrafts to 93 domestic cities and the highest number of passengers used Southwest Airlines to fly around U.S in Jan 2014 (Hawkins, Misra, & Tang, 2012). To accomplish more than 40th consecutive years of both profitability and competitiveness, Southwest Airlines Company is constantly trying to find the routes to differentiate itself from other domestic carriers (Hawkins, Misra, & Tang, 2012).
Bargaining Power of Customers (high)- Customers has several options when it comes to flying. But the main attraction to customers are low prices and Southwest makes it known that they have some of the lowest airfares. The only way Southwest can take back the power is by offering direct flights to cities that other airliners do not offer. Besides the small occurrence of having a direct flight to a city that no other airline has, Southwest
Work (Task) – Airline Operations. Requires skilled workforce and much emphasis is placed on customers relation and to providing quality service. To work for Southwest one must follow a vision that is customer service oriented and therefore, pleasant in demeanor and family friendly. Southwest has a special loyalty and commitment to its employees. Southwest had the lowest turnaround time for its aircrafts for a long period of time. To accomplish the difficult task, workers performed many tasks, including loading and unloading luggage, emptying wastes, taking packages and helping passengers, or they were trained to do a lot of multitasking.
Southwest Airlines Co. is an airline company that offers air transportation services within the United States and in international markets. The company operates within the airline industry that is highly regulated, technology intensive, labor intensive, and highly competitive (Southwest Airlines, 2017). Southwest Airlines operates a service business whereby the company offers a point to point air transport service to its passengers. Other than passenger transport, the company offers transportation services for pets and unaccompanied minors. The flights offered include short haul and long haul between various destinations within the United States and internationally. In 2016, the company’s operating revenues from international operations amounted to $383 million. A unique feature of the Southwest Airlines is its cost structure whereby the company focuses on cost discipline and uses one aircraft type to minimize costs.
The target demographic for Southwest is very broad. The fact the airline has a brand that appeals to price-conscious travelers who do not mind the airline’s no-frills philosophy means it attracts lots of small business owners, young adults, middle-class families, and those who are traveling a short distance. Southwest operates a simplified airline to keep costs down. It only operates one type of aircraft, and its no-frills plan includes no assigned seats or class seating, no meals, and no onboard movies. The company has a strong emphasis on customer service and a differentiation strategy to keep customers happy and loyal. When hiring for customer service positions within the organization, Southwest focuses on attitudes rather than skills and encourages peer hiring. This strategy helps the company identify those who fit the organizational culture and who are most likely to further the company’s philosophy of
Southwest Airlines is a major US airline established in 1967 that services a multitude of cities in all 50 states and beyond. The company is known for its outstanding quality in providing services and it 's cost effective ticket prices to its many passengers throughout the nation. This airline is based in the southwestern United States, in the city of Dallas Texas, and due to the tremendous number of airplanes that it has and the timely service that it provides to its passengers, this airline services more US passengers than any other airline. This airline also has the largest fleet of planes of any economical or low-cost airline service in the world and employees more than 45,000.
Since 1973, Southwest has been profitable even year. Their strategy included many factors like offering no-frills, short-haul, high-frequency, point-to-point, and low-fair service. Using point-to-point because they acquired only one model of the plane then figured out the latest way to turn an airplane around, using less busy airports, alongside with no meals provided or assigned seating. Southwest also did not have an assigned seat for their passengers but rather given the boarding numbers at the gate eliminating the double-booked seats. Further through the case, it
Southwest Airlines is a passenger airline company that arranges and provides scheduled flights for passenger and transportation freight services. The company mainly provides, low-fare, point-to-point services all over the US and near-international markets. The headquarters is located in Dallas, Texas and as of December 2014, the company employed over 46,278 people. The company was founded by Rollin King and Herb Kelleher in 1971. Southwest was the first airline to introduce the frequent mile program. This took place in the mid 1980’s. This type of program allowed passengers to add up traveled miles to use later as credit on a future airline ticket. The traveled miles would add up and would also reduce the price of a ticket. Southwest created the idea of senior discount, fun fares and the fun packs. These were perks that attracted people from different age groups. When Southwest originally was incorporated, the idea was to operate in three cities in Texas, but after taking over Morris Air and TranStar in 1987, this gave them a cutting advantage in the airline industry.
Southwest Airlines represents a rather unique organizational force that has driven the company to success since its inception in 1971. One of the most unique features about the organizational structure is that it is largely decentralized and employees are openly welcomed to express their opinions on a wide range of organizational issues. However, despite the "hands off" management strategy, the company consistently ranks as one of the top airlines in regards to customer complaints; in 2008, for example, the company received 0.25 complaints on average for every one hundred thousand passengers who used the aviation services (Triangle Business Journal, 2009). This analysis will look at some of the organizational factors that have contributed to the success of Southwest Airlines over the course of the last few decades.
Southwest Airline employees mainly belong to the Union and they are mainly full time workers. Since the Union has demand more services and benefits for their members, the company gain limited profit. To fix this the company should hire more part time workers instead of full time workers because they do not have to provide full benefits and instead focusing on gaining profit. And also, Southwest Airlines should make all flights within the states point-to-point flights, and give their employees a strict time lines to alleviate delays. This will keep an accurate time frame for customers. As far as the flight concerns, Southwest Airline has only one dependable
When on vacation, the first people you deal with are the airline companies, yes this is the dreaded trip to the airport. Way to often people have their happy vacations ruined by inconsistent and unreliable customer service, making them late for flights because of long lines, slow service, and unreliable technology that is difficult to use. However, Southwest airlines is one company that is standing out above all others. Known for their outstanding customer service and “Bags Fly Free” campaign, Southwest has held their ground against rising prices in airline travel and continued to expand its reaches while at the same time attracting many satisfied customers. Southwest Airlines was founded on June 18, 1971 by Rollen King and Herb Kellener. The very same year, Southwest began its flights servicing Dallas, Houston, and San Antonio. Southwest quickly climbed the ranks within airline the industry and became the fifth largest US air carrier by 1998, carrying an average of 50 million passengers a year across the United States. From then on, Southwest soared above the rest of the mid-range air carriers, and continues to do so to this day. Southwest quickly became known for its innovation when it comes to customer service and satisfaction, and it is still well known today for its simple and convenient customer service. Southwest has also been deeply involved when it comes to their social responsibilities, taking action to be ecofriendly whenever, and wherever possible. (Avstop)
In the first year of operation, Southwest was experiencing cash flow problems. While other companies may have begun layoffs, the President of Southwest went to the ground service people and discussed the issue with them. Together, the company set a goal of decreasing the turnaround time for at the airport gate from 55 to 15 minutes increasing the revenue capability of the airplane. Having found a way to increase revenue without losing any people, the ground service crew felt like a valuable part of the team and the President of Southwest did lay anyone off. (Smith, 2004) In the second instance of potential layoffs, revenue passengers became scarcer in the wake of September 11, 2001. To help the company through the crisis, Southwest asked employees to take a pay cut instead of having to
operated. During this time, travel agent fees were going through the roof and reserving an airline ticket was a complicated, drawn-out process. To counter this, Southwest implemented its own reservation system tailored to their own needs, which also included the industry’s first paperless ticketing system; but this wasn’t the end of IT innovation from Southwest Airlines. In 1995, Southwest.com was launched, and the online ticketing and reservation system was launched in 1996. Soon thereafter, Southwest Airlines ticket sales were primarily coming from their online reservation system (70%). By the late 90’s, Southwest.com was the most visited airline website [4].
Upon review on a profile of a successful company we see Southwest Airlines as a prime example. Their ability to recognize weakness in their management system and adjust strategies has allowed them to emerge as a leader in the US airline industry. Southwest is the largest US low fare carrier with low fare rates, no additional fees and excellent customer service. Southwest Airlines currently has one of the most innovative management practices in the US to date. A review of the critical elements of Southwest Airlines proves to be effective and innovative.