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Presented By:

Operations Management At

Southwest Airlines

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Background

In 1967,Rolling King and Herb Kelleher founded

Southwest an intrastate airlines.

In 1982, Just Say When campaign

In 1987,Frequent flier programme,no. of flightstaken.

In 1992,Southwest won the annual Triple Crown

Award.

In 1996,SW started selling through Websitewww.southwest.com

http://www.southwest.com/http://www.southwest.com/

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Cont.

In 2000,SW placed biggest aircraft order ever,

delivery of 94 Boeing737.

In 2001,sept terrorist attacks,SW managed to

post a profit. In 2002,the worst year ever for the airlines

industry ,SW posted its 30th consecutive profit.

In 2003,SWAirlines was the 4th largest US

airlines in terms of domestic customers carried.

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Southwests Business Model

Providing safe

Reliable

Short duration air service

Lowest possible fair Quality service

Point to Point

Blanketing stratgy

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Key operation parameters of sw

Passenger Load factor-

is the percentage of

a plane filled with paying

passengers. Revenue passenger

miles-

One paying passenger

flownone line

62

64

66

68

70

72

1998 1999 2000 2001 2002

Passenger Load Factor

%

0

20000

40000

60000

1998 1999 2000 2001 2002

Revenue passenger miles

million

Source:www.southwest.co

m

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Cont

Aircraft Utilization-in hours

and minutes in a day a

plane

is used0

1,000

2,000

3,000

Average Daily Passengers

passengers

11:02

11:09

11:16

11:24

1998 1999 2000 2001 2002

Aircraft Utilizatin

hr:min

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Contd.

In2002,Sluggish

economy

High energy prices

Tension in Gulf spelled

0

500

1000

0

2000

4000

6000

1998 1999 2000 2001 2002

SW's Revenue & NI(in $mn)

Revenue

NI

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SWs Top Ten Airport-Daily Departure

Southwest avoided

congested airport.

High employee

productivity.

Reliable on time

performance.

80 86

117 122130

141 150171 180

02040

6080

100120140160180200

No.o

fDaily

Flights

Airports

Daily Departure

No od Daily flights

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SW:Anatomy of a 15-minute Turnaround

7:55 Ground

crew chat

around gate

position

8:08 Boardingcall ,baggage

loading,

refueling

complete

8:03:30 Ground

crew move to

their vehicles

8:07

Passenger

off plane

8:04 crew

moves towards

gate

8:06:30

Baggage

unloaded,

refueling

8:15 Jet way

retracts

8:10 Boarding

complete.

ground crew

leaves

8:15:30Pushback

from backs

8:18 Pushbackdisengages

plane leaves for

runway

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How SW strategy is Implemented

Passenger

related

departur

e

Very

lowticket

prices

No site

assignments

No

baggag

e

transfer

s

No

connectio

n with

otherairlines

No

meals

Short

hual,poin

t to point

travel

Limited

Passeng

er

service

High

aircraft

utilizatin

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Activities

Standardized fleet of 737 aircrafts

Southwest the low fare airlines

High level of employee stock ownership

Flexible union contracts High compensation of employees

15-minute gate turnaround

Limited use travel agents

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Looking Ahead

Increase more non stop flights

Enrich operation system

Include daily non stop flights in busy air traffic

route.

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Any Questions

Thanks