Southwest Airlines Case Summary

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Southwest Airlines Case Summary

Southwest Airlines was originally named Air Southwest. It was started on March 15, 1967, by Rollin King and Herb Kelleher. Southwest Airlines is an American low fare airline based in Dallas, Texas. It is also the largest airline in the United States by number of passengers carried domestically in a year and the third largest airline in the world by number of passengers carried. Southwest is also one the most profitable airlines in the world posting a profit for 34 consecutive years. September 11th was the worst day for airline companies around the world. There was close to a 20% drop off in airline traffic in the fourth quarter of 2001. The U.S. commercial airline industry was in turmoil and
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They also had many legal struggles. Southwest infuriated local officials because they refused to leave Dallas Love Field. The courts ruled in Southwest 's favor and they did not change locations. They also received more problems because other airlines complained that if Southwest began serving smaller cities in Texas it would result in costly overcapacity. Once again Southwest prevailed. The Herb Kelleher era was the real beginning of Southwest Airlines. He took over in 1981, after Lamar Muse and Howard Putnam, and Southwest Airlines had 27 planes, $270 million in revenue, 2100 employees and flights to 14 cities. Over the next 20 years the airlines grew and going into 2003 Southwest was the 4th largest U.S. commercial airline in terms of passengers flown and 6th largest by revenue. It had $5 billion in revenues, 370 jets to 59 airports and 58 cities in 30 states, and 35,000 employees. Southwest wanted to stress the importance of low operating costs. To do this they implemented many strategies. They operated only one type of jet—Boeing 737s. This minimized their spare part inventories, cost them less to train maintenance and repair personnel. They were also the launch customer for Boeing 's 737-300, 737-500, and the 737-700 jets, and this enabled them to receive a big discount. They incorporated ticketless travel and save the
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