Southwest Airlines: Using Human Resources for Competitive Advantage

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Southwest Airlines: Using Human Resources for Competitive Advantage

Executive Summary Southwest was founded in 1971 with a fleet of three Boeing 737 aircraft. Headquartered at Love Field in Dallas, the airline followed a strategy of low fares, few frills, and excellent customer service. Early on, the airline faced many political and regulatory challenges including the Wright Amendment, which prohibited the carrier from offering direct service into Love Field from any state other than Texas and its four neighboring states. Under the leadership of co-founder and CEO Herb Kelleher, Southwest used these challenges to galvanize their employees, ultimately building a highly successful business with a uniquely committed workforce. By
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"LUV" is the company’s stock symbol and refers to the organization’s core values of respect for individuality and genuine concern for employees. "FUN" refers to the company 's belief that employees should enjoy themselves at work and its commitment to creating an atmosphere that encourages customers to have fun. The word "Customer" is consistently capitalized in the company 's corporate communications.
Southwest’s business model has resulted in consistent on-time performance, low fares, diligent bag handling, and high levels of customer satisfaction. Southwest passengers who experience the airline 's excellent service are loyal and this in turn attracts more business. Southwest has created a successful and profitable product in the tough airline industry year-on-year, resulting in creation of value and high return on investment for its shareholders.

Competitive Threat
Continental Lite was launched in 1993, immediately after Continental had emerged from its second bankruptcy and before it had become profitable. Employees weren’t thrilled with the extra duties and they’re not making their turnaround times. Its leader, Bob Ferguson, is known as a harsh taskmaster and has been known to alienate management and other executives. Although he has secured a Southwest alumni as marketing chief for Continental Lite, he concedes that the new business has “had some start-up pains and hasn’t operated very efficiently so far.”
United announced the launch of their Shuttle
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