Soaring with Southwest Airlines: Understanding Success as a Result of Structure, Strategy, and Society

In the past three years the airline industry has faced an unparalleled list of challenges and American Airlines has certainly had more than the others. Year by year AA has tried to recover with a great deal of effort to turn the company around. The strategies they are applying to counteract the status are : Lower costs to compete, give to the customers the service they are expecting

September 11, 2001, was a horrific event that rocked the world and the way people viewed the safety of airline travel. The airline industry was hit the hardest after that day and it was uncertain if they could regain their customer’s

In 2008, the senior management team at Continental Airlines, commanded by Lawrence Kellner, the Chairman and Chief Executive Officer, convened a special meeting to discuss the firm’s latest quarterly financial results. A bleak situation lay before them. Continental had incurred an operating loss of $71 million dollars—its second consecutive quarterly earnings decline that year. Likewise, passenger volume was significantly down, dropping by nearly 5 percent from the prior year’s quarter. Continental’s senior management needed to act swiftly to reverse this trend and return to profitability.

American airline industry is steadily growing at an extremely strong rate. This growth comes with a number economic and social advantage. This contributes a great deal to the international inventory. The US airline industry is a major economic aspect in both the outcome on other related industries like tourism and manufacturing of aircraft and its own terms of operation. The airline industry is receiving massive media attention unlike other industries through participating and making of government policies. As Hoffman and Bateson (2011) show the major competitors include Southwest Airlines, Delta Airline, and United Airline.

1. There are a few trends in the US airline industry. One is consolidation, wherein existing players merge in an attempt to lower their costs and generate operating synergies. The most recent major merger was the United Continental merger, which is still an ongoing affair, but has created the largest airline in the United States by market share (Martin, 2012). Another trend is towards low-cost carriers. In the US, Southwest has been a long-running success and JetBlue a strong new competitor, but in other countries this business model has proven exceptionally successful. The third major trend is the upward trend in jet fuel prices, and the increasing importance that this puts on hedging fuel prices and capacity management (Hinton, 2011).

This report provides an examinaion of the current structure, performance, stragergy and management of Delta Airlines, along with an industry analysis of the airline industry. The report uses current and past financial and statistical data for the company along with other up to date material to determine Delta's current market position and future potential.

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.

This paper explores American Airlines pit falls that made it behind in the market and it imposes the three principles that are used to reinforce and bring up the bankrupted Walton Works 2 by Peggy Sinclair through advises from Andy in the book Gung Ho! Turn on the People in Any Organization written by Ken Blanchard and Sheldon Bowls. American Airlines concentrates only on acquiring most of the routes to establish themselves leaving no option to the customers in the market. American Airlines vision is to hold most of the passengers but not the productivity and service efficiency. To achieve utmost contribution of because of improved pride, possession and passion, American has to implement three principles as follows to increase the

At the onset of the airline industry in the United States, major network airlines were the sole providers of air travel. This multifaceted industry was a difficult industry to break into as a consequence of “sophisticated customer segmentation, hub-and spoke models and costly information systems for reservations, fare wars and intense competition” (Thompson 2008). Shrinkage in airline ticket prices augmented the demand for airline travel. Many markets were simply deserted or over-looked by major network airlines; this is a region a fresh “second tier of service providers” could enter into. This endeavor proved to provide a consumer savings of billions per year. Thus in June of 1971, after a tumultuous battle with other Texas-based

The type of corporate culture Southwest Airlines (Southwest) exhibits is a high-performance culture. According to Thompson et al. (2016) one of the traits of high-performance company is a “can-do” spirit (p. 351). Southwest’s can-do spirit derived from the company’s legal, regulatory, and competitive struggles during its formation, which was led by Herb Kelleher and supported by employees who were driven to assist the airline to succeed despite these oppositions and this attitude has endured within the company (Thompson & Gamble, 2014, p. C-344). This is supported by Colleen Barret’s, Southwest’s former president, comment that “The warrior mentality, the very fight to survive, is what created our culture” (Thompson & Gamble, 2014, p.C-344). This warrior mentality or “Warrior Spirit” is one of the elements of the company’s “Living the Southwest Way” which implores employees to work hard, desire to be the best, be courageous, display a sense of urgency, preserve, and innovate (Thompson & Gamble, 2014, p. C-366).

From the humble financial portfolio as a crop dusting outfit in the mid twentieth century, to the multi-billion dollar portfolio of a major airline in the twenty first century, Delta Air Lines has risen as a successful business. The airline industry is directly affected by outside economic conditions and is also cyclical in nature. These factors make it very difficult for airlines to make predictions to stay financially afloat. Delta has ridden the bumpy path of the last twenty years and managed to survive. In the past twenty years there has been many events that

A drop in fares has been the best result of the Airline Deregulation Act of 1978. It has been the impetus for the increase in the number of flights, which in turn has spurred a drive for greater safety in airlines. But with the current airline market, this development has given us one negative. Since ticket prices have dropped to new lows, the realities of an industry which operates on such economies of scale dictates that only a few competitors have the capacity to operate within the market. This is not the desired effect of either political side on this issue, but it is an economic necessity with the environment that has been created, very similar to that of public utilities and phone companies.

Launched just 8 years ago, today, the Jetstar Group consists of a network of value-based air carriers that deliver high quality air passenger services for budget-minded travelers across Australia, New Zealand and the Asia Pacific region. Beginning with just 400 employees, the company currently employs more than 7,000 people and carries about 20 million passengers a year. To gain some insights into how the Jetstar Group achieved this impressive growth in such a short amount of time, this paper provides a review of the relevant literature concerning the air passenger industry in general and the business strategy used by the Jetstar Group in particular. A summary of the research and recommendations for this company are provided in the paper's conclusion.

The Airline industry has experienced continual problems with rising costs with both fuel and maintenance which has caused them to increase their fees to the consumers to pay for those rising costs. This paper will help explain what an airline such as Delta does to help alleviate such costs without forcing its consumers to flip the bill through high fees that consist of tickets, baggage fees and food. The costs of doing business in aviation today have spiraled out of control making it very expensive for both airlines and the

In examining the history of aviation in the U.S. and the development of the airlines, it is clear that the Federal Government played a vital role in the development of both. Historical records clearly show that this involvement by the Federal Government was critical in getting them established and in helping to develop them into the globally dominant enterprises they are today. Furthermore, it can be easily argued that U.S. aviation as a whole, and the airlines in particular, would not be where they are today without this direct involvement by the Federal Government and some of the very specific actions that it has taken to keep them relevant and competitive during the most dire of times. The Federal Government ensured that U.S. aviation and its airlines would develop and achieve a worldwide leadership role by becoming involved in three major ways: through funding, legislation, and policy setting.