Strategic Audit Us Airways vs Southwest Airlines

Business Strategy – BAD 4013 – SUMMER 1999 Case Study Southwest Airlines I. Strategic Profile and Case Analysis Purpose The mission of Southwest Airlines is dedication to the highest quality of customer service delivered with a sense of warmth, friendliness, individual pride, and company spirit. Twenty-seven years ago, Rolling King, owner of floundering commuter airline, and Herb Kelleher, King’s lawyer, got together and decided to start a different kind of airline that would provide a short-haul, low-fair, high-frequency, point-to-point service in the United States. The company began service on June 18, 1971 with flights between Dallas, Houston, and San Antonio (“The Golden Triangle” as Herb called it). Southwest Airlines is the fourth

Southwest Airlines Co., established in 1971 by Rollin King and Herb Kelleher, began its operations with only three Boeing 737 aircrafts. It is headquartered in Dallas, Texas(Hawkins, Misra, & Tang, 2012). Southwest is well known as one of the largest low-cost carriers. With this strategy, the company has dramatically grown up and deeply rooted in the US airline industry. Now, Southwest Airlines Co. operates 633 aircrafts to 93 domestic cities and the highest number of passengers used Southwest Airlines to fly around U.S in Jan 2014 (Hawkins, Misra, & Tang, 2012). To accomplish more than 40th consecutive years of both profitability and competitiveness, Southwest Airlines Company is constantly trying to find the routes to differentiate itself from other domestic carriers (Hawkins, Misra, & Tang, 2012).

Southwest Airlines boasts the best on-time record, best baggage handling, and fewest customer complaints in the airline industry. For these achievements, it won the industry's Triple Crown award for Best Airline five times in a row (Fortune 100 Best Companies, 2011). The Great Place to Work Institute, cites statistics published annually by the U.S. Department of Transportation (DOT) that Southwest has ranked number one in customer satisfaction for eleven consecutive years 1991 through 2001. Southwest is the only airline that has made money every year since 1973 (southwest.com).

This growth in combination with the growth from the acquisition of AirTran has put a strain on the airlines employees. This strain has had an effect on service “Southwest was last in on-time performance among major airlines and last among big airlines in baggage handling” (McCartney, 2014, p. 16). “Employees resist change for a variety of reason,” (Parnell, 2014, p.294). It has also had a negative impact on labor union contract negotiations (McCartney, 2014). “Southwest is 85% unionized,” (Parnell, 2014, p.389).

Southwest Airlines is a major US airline established in 1967 that services a multitude of cities in all 50 states and beyond. The company is known for its outstanding quality in providing services and it 's cost effective ticket prices to its many passengers throughout the nation. This airline is based in the southwestern United States, in the city of Dallas Texas, and due to the tremendous number of airplanes that it has and the timely service that it provides to its passengers, this airline services more US passengers than any other airline. This airline also has the largest fleet of planes of any economical or low-cost airline service in the world and employees more than 45,000.

This paper will give a historical overview of the company, discuss the ingredients to the company success, offer some financial strengths and present a final conclusion. Section I: Southwest's History Twenty-seven years ago, Rollin King, a San Antonio entrepreneur who owned a small commuter air service, and Kelleher, who was a lawyer at the time, got together and decided to start a different kind of airline. They began with one simple notion. If you get your passengers to their destinations when they want to get there, on time, at the lowest possible fares, and make certain they have a good time doing it, people will fly your airline. And you know what? They were right. Within those 27 years, Southwest Airlines became the fifth largest major airline in America. Today, they have flown over 50 million passengers a year to 54 cities all over the southwest and beyond. They do it over 2,300 times a day with over 267 of the newest jets in the nation and fly only one type aircraft; the B-737. The average age of their fleet is only 8.4 years and they own over sixty percent of them. In May 1988, they were the first airline to win the coveted U.S. Department of Transportation Triple Crown for a month - Best On-time Record, Best Baggage Handling, and Fewest Customer Complaints. Since then, they've won it

According to statistics, Southwest Airline carried more passengers than any other US based airline since 2006.These statistics include all the international and national passengers’ routes. It is estimated that Southwest is one of the most profitable airlines in the world.

Total Resource Network (TRN) congratulates Southwest Airlines for thirty-eight years of consecutive profitability. This is a major accomplishment that should be applauded especially during this economic recession and recovery period. Southwest’s success has been attributed to their core values and mission that begin with their employees and exceptional customer service. These two attributes along with low airfares have

The financial success of Southwest has received a large amount of free publicity that has certainly helped to create an image of an airline to be trusted and used by many passengers. They had 31 years of continuous profitability.

Southwest Airlines has been in business for more than thirty years. Presently, operating airplanes and flight services is very competitive, and in most cases, is not cost-effective industry; however, Southwest Airlines has been consistently profitable company, which is successfully designed with the intention of achieving high growth. According to an interview of Southwest Airlines former CEO, Herb Kelleher, when he visited Graduate School of Business at Stanford University, despite all airline industry challenges, the “low-fare airline has grown into the third largest in the world as measured by the number of passengers carried, and the largest with destinations exclusively in the United States” (2006). To the customers, Southwest

hundred companies to work for. Fortune has hailed Southwest as the most successful airline in

A critical analysis of Southwest Airlines with recommendation for future profitability. Today, Southwest is the only major airline that is surviving the economic recession. Prior to the economic recession, Southwest had 36th years of growth and profits in 2008. This all ended when economic recession hit causing Sou

This proposal addresses the needed steps to be taken in order for Southwest Airlines to see continued growth in the airline industry. Southwest Airlines has been able to remain one of the most profitable airlines in the industry for an extended period of time. Even with the hindrance of the 2001 terrorist attacks involving airplanes and the U.S recession of 2008, Southwest has continued to see strong revenue growth. Meanwhile, other companies were experiencing major losses and in some cases folding. Southwest Airlines has capitalized on the company’s strength of being the top low cost

Based on the case study, and on online and offline research into Southwest Airline’s current state, complete the following Tasks:

Southwest Airlines provides short haul, high frequency, point-to-point, low-fare services to and from 58 cities across the United States. The company is known for its low-cost fares and superior customer service in the airline industry. The company was started in 1971 with a motto still lived by today, "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." This motto has been effective for the company because they recently reported their 58th straight quarterly profit.