Key Success Factors For Southwest Airlines

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).

Bargaining Power of Customers (high)- Customers has several options when it comes to flying. But the main attraction to customers are low prices and Southwest makes it known that they have some of the lowest airfares. The only way Southwest can take back the power is by offering direct flights to cities that other airliners do not offer. Besides the small occurrence of having a direct flight to a city that no other airline has, Southwest

Southwest Airlines was formed in 1967 by Rollin King and Herb Kelleher and started service in June of 1971. The airline is headquartered in Dallas, Texas and originally operated flights within the state of Texas. The company has since expanded and now operates flights from Dallas to almost all major cities in the United States and is considered the largest low-cost carrier in the country. “Southwest seeks to offer a travel product that is built around flights targeted to specific demographics and ticket pricing that is simplified so that passengers know

Southwest Airlines' successful and profitable business model has been driven by several strategies: high aircraft utilization; standard fleet; charismatic leadership; low fare carrier; excellent customer service practice; attractive frequent flier program; innovative and creative marketing program; performance focused organizational culture; strategic human resources management and a lean operations.

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

Southwest's competitive advantage in providing low cost is of the primary reasons which their competitors couldn’t match. The airline has the lowest costs on a per mile basis among all the major airlines as they used single aircraft type and the highly efficient, high-frequency ad point-to-point route scheme. Due to this commoditization of the industry, passenger profiles have changed with business and first class seat demand in great decline. This correlates perfectly with Southwest's position of no assigned seats or class designations. Competing companies have been forced to introduce low fare options in attempts to regain lost market share from low priced air carriers. Because Southwest's strategy has always been low cost, and standardized travel, they have not had to change strategy. This has saved them what could amount to millions on restructuring costs. Also, some of the competitors tried to increase no of flights which resulted in operational ineffectiveness

Southwest Airlines is a passenger airline company that arranges and provides scheduled flights for passenger and transportation freight services. The company mainly provides, low-fare, point-to-point services all over the US and near-international markets. The headquarters is located in Dallas, Texas and as of December 2014, the company employed over 46,278 people. The company was founded by Rollin King and Herb Kelleher in 1971. Southwest was the first airline to introduce the frequent mile program. This took place in the mid 1980’s. This type of program allowed passengers to add up traveled miles to use later as credit on a future airline ticket. The traveled miles would add up and would also reduce the price of a ticket. Southwest created the idea of senior discount, fun fares and the fun packs. These were perks that attracted people from different age groups. When Southwest originally was incorporated, the idea was to operate in three cities in Texas, but after taking over Morris Air and TranStar in 1987, this gave them a cutting advantage in the airline industry.

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

Southwest Airlines was incorporated in 1967 and founded by Rollin King and Herb Kelleher. However, due to lawsuits, Southwest was unable to fly their first commercial flight until 1971. Southwest founded their business on the quote: "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 yourairline5." Southwest focused on a point-to- point operational system and a low cost pricing strategy that is currently used today. The organization is very centralized due to its point to point emphasis. The centralization of the company requires very strategic route utilization. The company for instance, selects routes to airports with low competition and overall traffic. This allows the company to be more price competitive as competitors are reluctant to venture into less travelled routes. In order to make decisions regarding these routes a centralized organizational structure is warranted. In addition to the centralized organizational structure of Southwest, many committees, teams, and task forces are designed with the sole purpose of reducing waste and cost control. The airline industry is predicated on cost containment, particular those related to fuel and other commodity prices. Task forces are designed with the purpose of providing a sustainable means of reducing costs without a corresponding decline in customer experience. The centralized

of these features were exactly what defined a competitive airline at the time. And, all of these features added cost. Instead, Southwest Airlines selected a specific target customer — a Texan traveling between cities in Texas — and then determined what it would take to satisfy that customer.    That customer was far more interested in travel efficiency than travel class. That customer would be glad to forgo a meal, especially in exchange for a friendly flight attendant and a Dr. Pepper. That customer was trading off driving for flying, and needed flexibility in booking rather than navigating through the decisions and planning related to yield

Southwest Airlines began operations in 1971, and has remained profitable after 44 years. The company has experienced challenges such as high fuel prices, a recession, and even the tragedy of 9/11. Their strategy is unique and one-of-a-kind. They have innovated the airline industry by keeping costs low while not sacrificing quality or punctuality.

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.

Southwest Airlines faced many barriers to entry from the fierce competition of other airlines in the industry. Though competition was fierce, Southwest Airlines managed to succeed by doing things differently. Their mission was to provide affordable air travel to those who would not normally fly. Contradictory to the rest of the airline industry, Southwest maintained a profit while keeping its fares low. Southwest was unique to the industry in two ways. They focused on the short haul traveler and used a point-to-point method of flight connections.

Southwest Airlines was created in the late 1960’s by a businessperson Rolling King, and law school graduate Herb Kelleher, who sought a faster travel time between Houston, Dallas, and San Antonio, Texas (Dess, et al., 2014, p. C137). After overcoming all of the antagonism and legal problems of many major airlines, Southwest was able to take its first flight in 1971 (Dess, et al., 2014, p.C137). With a dedication and will power to grow the company, King and Kelleher sought out ways to increase growth.