History of Southwest Airlines’ Operations Management Founded in 1971, Southwest Airlines is a low cost carrier that last year celebrated 41 consecutive years of profitability by posting record earnings in 2014 (PRNewswire, 2014). While its main competitive advantage is being able to provide service at a lower cost than other airlines, it also is able to differentiate itself from competitors through excellent customer service and through response in the form of rapid airport turn-around times and a larger number of flight options than its competitors. There are two main constants that have been critical to its success. From a corporate culture standpoint, the company values and empowers employees at all levels, creating a favorable labor relations climate. From an operations standpoint, the company has maintained the same strategic focus in four key areas that have kept the profits rolling in despite external upheavals, such as spikes in fuel prices, mega-mergers that solidified competition, and even the financial meltdown of 2008 and the 9/11 terrorist attacks, which saw drastic cutbacks in both business and leisure discretionary travel (Mutzabaugh, 2014). This paper will provide an overview of the company’s operating philosophy and explain how those four key areas relate to its overall strategy. Background Southwest began in 1971 with three planes serving only three cities in Texas, Dallas, Houston, and San Antonio. Those three planes were Boeing 737s, and they were one of
Southwest Airlines original name was Air Southwest in 1967 in Dallas, Texas, before the change of the name to Southwest Airlines in 1971. They were faced with battles due to legal issues with Dallas and Love field, because of the Wright Amendment, but the come to an agreement to allow 4 states to connect to Texas. Southwest bought 129 new planes, because of the expansion of the company growth, which currently have 141 planes that enhance the growth of the company because of shorter flights (Gimbel, 2005). Southwest was started in 1971, by Rollin King and Herb Kelleher, which released it first flight from Dallas Love Field that is located in Houston and San Antonio Texas. The passengers look for an airline services that can get them to their destination at a cheap price. Majority of the passenger are looking for an airline service that will eliminate layovers and multiple stops as possible.
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.
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.
At Southwest Airlines, the company’s business strategy has a positive effect on the training they provide to their employees. Southwest Airlines is a Texas based airline that started up in 1971 (Corporate Fact Sheet). Over the years the airline has been recognized for its outstanding customer service and its low airfare fees. Due to their excellent customer service, the company has been ranked number one in customer satisfaction in 2013 by the U.S Department of Transportation. In. 2015, Southwest airlines was recognized as one of the Best Places to Work in the Glassdoor Employees’ Choice Award. The reason that Southwest airlines is recognized for all these great things is because they obtain a good organizational control over the airline.
Southwest Airlines Co. began its operations in 1971 and has been serving the industry for the past 43 years now (Southwest Airlines, n.d.). It is the major domestic airline, and ranked number one in 2014 by the Bureau of Transportation Statistics (United States Department of Transportation, 2014). Back in 1971 the airline began its services in Texas in the cities of Houston, San Antonio, and Dallas. The company has been ranked as the nation's largest low cost carrier (Mergent, 2012). It offers the lowest fares, and has the lowest cost structure in the industry.
The management style of Southwest airline is characterized by how greatly it takes care of its employees’ well-being. The management considers it as a mean to achieve higher customer satisfaction: “Keep employees happy, then they will keep customers happy”.
Southwest Airlines represents a rather unique organizational force that has driven the company to success since its inception in 1971. One of the most unique features about the organizational structure is that it is largely decentralized and employees are openly welcomed to express their opinions on a wide range of organizational issues. However, despite the "hands off" management strategy, the company consistently ranks as one of the top airlines in regards to customer complaints; in 2008, for example, the company received 0.25 complaints on average for every one hundred thousand passengers who used the aviation services (Triangle Business Journal, 2009). This analysis will look at some of the organizational factors that have contributed to the success of Southwest Airlines over the course of the last few decades.
This short paper is an overview of Southwest Airlines, its strategy, and what role Human
During the rapid globalization, being one of the topmost and sustainable airlines is not easy due to the highly competitive airlines industry. Southwest Airlines, founded by Rolling King, Herbert Kelleher, and Lamar Muse in 1967, is considered a very long history of success following its goal that emphasizes on customers’ satisfaction. The key of organizational success relies on human value of Southwest CEO, managers, and employees who try to help each other in order to reach the customers’ best service because these people are the major factors to justify their own images that represent their organization. Furthermore, Southwest has motivated its employees to be more creative and improvable by allowing suitable norms and
When Herb Kelleher and Rollin King founded Southwest Airlines in 1971, their mission stated the “dedication of the highest quality of customer service delivered with a sense of warmth, friendliness, individual pride, and company spirit” (Smith, 2012). With that mission in mind, Herb Keller and Rollin King managed to make Southwest the only profitable airline in the United States (Smith, 2012). Southwest’s mission is not the only reason why the airline continues to grow. Without the way, Herb Kelleher former CEO of Southwest, had developed a particular leadership style, power base, and a set way the organization motivates its’ work force, the company would not be as successful as it is
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
Their first core value is keeping their employees happy. Because only employees with nice attitude can provide best service to customers and keep company benefit. According to this, Southwest Airlines’ practice is their operating structure. The organization of Southwest Airlines is more likely as an upside-down pyramid. The upper management is at the bottom and supports the front line employees. Front line employees are given great attention by the management and play a major role in the yearly business planning and operational budgeting. The company does not stress much on structure. Instead, employees are encouraged to think freely without constraints such as titles or official mandates. This whole structure is created by the co-founder Herb Kellehe and employees will feel respected and valued when management decisions are made by everyone in the organization, not just the head executives.
Southwest Airlines: Culture, Values and Operating Practices (in Thompson, A. A., Strickland. A. J. and Gamble, J. (2005) Crafting and Executing Strategy (Fourteenth Edition), McGraw-Hill, New York, pages C-636– C-664).
Rollin King and Herb Kelleher, founders of Southwest Airlines (SWA), previously referred to as Air Southwest Company, founded SWA back in 1967. The airline first operation was launched in 1971 servicing the Dallas, Houston, and San Antonio area (Muduli & Kaura, 2011). SWA started off as a small Texas airline and has now grown to become the fourth largest airliner in the United States of America (Unnikrishnan, 2016). SWA impressive performance is evidenced by the fact it has managed to earn a profit every year since 1973. As of 2017, SWA employs more than 53,000 people with a mission to deliver exemplary customer service throughout the organization. In addition to the exemplary customer service, Southwest rock bottom airfares, and low operating costs is what spells out success for the multi-billion-dollar commercial airline company (Southwest Fact Sheet, 2017).
HR Policies and Leadership: The advanced employee training techniques and employee engagement is an important element of Southwest’s success so far. The exceptional customer service which differentiates SW from their competitors is attributed to their strong employee base. Herb Kelleher, a transformational leader, led the organization by maintaining a fun-filled culture. By creating a friendly working environment in the organization, CEO of southwest airlines was able to retain the employees in the organization. Employees were not only extrinsically motivated to be in the company but intrinsically motivated to be a part of the Southwest Airlines family. It was demonstrated from the fact that when there was a downturn, managers froze their salary for 5 years just to maintain