South West Airline

919 WordsSep 3, 20084 Pages
While the major airlines in the United Stated were making a lost of approximately $8 billion, Southwest was the only airline company that was profitable as well as facing a rapid grow-with a 25 percent sales increase in 1992. In 2005, Southwest was the sixth largest airline in United Stated. The success of Southwest is mainly linked to its pricing strategy, it positioned itself as a low-price, short hauls and bare bones operation. There are numerous distinctive characteristics that had lead to the success of Southwest’s pricing strategy, this report has summarised these characteristics into four key categories and followed by a detailed explanation. These key factors appear to be niche marketing, cost containment, employee commitment…show more content…
However, passengers found these services are acceptable because of the short-haul situation, and dependable and reasonable services were still maintained with the cheap price they have paid. Employee Commitment Kelleher’s extroverted, zany, and down-home personality helps Southwest to generate a team of employees who are highly committed and loyal to the company, which also becomes a competitive advantage for Southwest as employees are the most valuable assets for every organisation. Kelleher is a successful leader who creates a fun and friendly working environment, and with his sincere interest in the employees and company parties, which resulted that Southwest employees are unionised but has no relationship with unions. The benefits is that Southwest is able to negotiate flexible working rules with employees, they brought a dedication to serving customers, flight attendants and even pilots are willing to help with plane cleanup. This is one of the reasons that why Southwest is able to achieves fast turnaround time. As employees enjoying their works, they tend to achieve high productivity, and Southwest was enabling to be leanly staffed. Kelleher also introduced the first pro-sharing plan in the US airline industry in 1974, employees own a total of 13 percent of the company stock. This profit-share plan promotes employees’ productivity, and creates a sense of security and loyalty for employees. Employees are motivated through fun working
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