Southwest Airlines operates a low-fares, high frequency scheduled passenger airline serving short haul, point to point routes between 68 cities in the United States. Southwest operates more than 3,200 flights a day coast-to-coast in 2009. (Southwest Airlines Co., 2008)
The company sells seats on a one-way basis. Fares are set on the basis of demand for particular flights and by reference to the period remaining to the date of departure of the flights. Higher fares are charged on flights with higher levels of demand made nearer to the date of departure.
The company provides various ancillary services and engages in other activities connected with its core air passenger service. These include non-flight scheduled services, the in-flight sale of beverages, food and merchandise and Internet-related services. As part of its non-flight scheduled and Internet-related services, the company distributes accommodation services and travel insurance through both its website and its telephone reservation offices. Southwest also sells bus and rail tickets onboard its aircraft and through its website.
Southwest Airlines was established in 1971 in Texas with three Boeing 737 planes and routes between Dallas, Houston and San Antonio. The company's business model was simply: "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." (Southwest Airlines Co., 2010)
Rollin King and Herb Kelleher decided to start an airline that is distinct and unique in terms of services and fare. They envision an airline that caters to the travelling businessmen and other passengers who requires frequent point to point flights. With President Lamar Muse at the helm, Southwest Airlines took off on its maiden voyage in 1971 and began service between Dallas, Houston, and San Antonio. In 1979, innovative self-service ticketing machines were introduced and utilized in ten cities to make the ticketing faster and more convenient for customers. (Southwest Airlines Co., 2010)
By 1980s, Herbert D. Kelleher comes aboard as permanent President, CEO, and Chairman of the Board for Southwest Airlines, and Southwest spreads its wings to San Francisco, Los Angeles, San Diego, Las Vegas, Kansas City, and Phoenix. Three additional Boeing 737-200s are purchased, and Southwest flies over 9,500,000 satisfied Customers. And in 1989, it reaches its billion dollar revenue mark and become a major player in the airline industry. (Southwest Airlines Co., 2010)
By 1994, the company introduced Ticketless Travel in four cities and became available system wide by January 1995. And in 2004, the company began offering online boarding passes via southwest.com. Today Southwest Airlines is the largest airline in the United States, based on domestic passengers servicing 68 cities with a fleet of 537 planes and is on its 37th straight year of profitability. Southwest became a major airline in 1989 when it exceeded the billion-dollar revenue mark. Southwest is the United States' most successful low-fare, high frequency, point-to-point carrier. (Southwest Airlines Co., 2010)
B. Business Vision and Mission Statements
Figure . Southwest's vision and mission statements ( (Southwest Airlines Co., 1988)
C. External Opportunities and Threats
Fuel Price Impact
Fuel prices can have a significant impact on Southwest's profitability. Volatile fuel costs, coupled with a continued domestic economic downturn, had a significant effect on Southwest and the airline industry, in general. In 2008, the higher fuel prices during most of the year led to industry-wide capacity ...
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It is the biggest domestic airline in United States of America. The company has enjoyed profitability after the initial two years of its inception and has never seen a net loss in any year after 1972. This alone signifies the performance of Southwest Airlines.
airline industry has led to affect the business of Southeast airline. The major areas of concern for Southwest airline was decreasing profit and market share. During 1989, Southwest Airline was one of the leading airline services providers but the new entrants like United Airlines, Northwest Airline, and American Airline etc became vital threats to Southwest Airline.
Southwest Airlines Introduction The Southwest Airlines was established in 1966, a brainchild of Rollin King, an entrepreneur from San Antonio (Thompson & Gamble, 2011). The business was formally incorporated in 1967 with Herb Kelleher as a shareholder. The business was established to offer reliable, affordable, and convenient air transport services to customers, mainly business people who needed to travel between Houston, San Antonio and Dallas.
Financial Performance 7 3.1 Liquidity ratio 9 3.2 Solvency Ratio 10 3.3 Profitability Ratio 11 3.4 Efficiency ratio 13 3.5 Comparison with Competitors 14 4. Key Performance Indicators 15 Advancement of security and culture of Southwest 15 Value the employees 16 Make a place in the minds and hearts of the customers 16 Use Resources Sensibly 16 5.
'First Break all the rules' is a remarkable book written by Marcus Buckingham and Curt Coffman. It is more than a book, in that it is an extensive research of eighty thousand manager's successful managers of various businesses large and small, with a resounding conclusion, that very often the best do things their own way even if it is different or against convention and that actually is part of what makes them stand apart.
The competitive and legal battles developed a fighting streak and the desire to survive and succeed despite all odds.
The warrior attitude that the airlines developed over the initial years has shaped up its
He involved Herb Kelleher in his business and together they put together their efforts and money to start the business. In the beginning, Lamar Muse, an airline veteran, was brought in as CEO and later, Howard Putnam (1978-82) took charge. Herb Kelleher took over as CEO in 1982. Colleen Barrett has been the president and COO since 2001 and James F. Parker is the CEO. Gary C. Kelly replaced Parker in 2004.
There were three key reasons that have contributed to its continued success: human resource; customer service; and innovative cost effective strategy of operation. The organizational culture of the company is highly encouraging. It