SOUTHWEST AIRLINES

BY-

VISWACHAITHANYA (2T3-11)

ANUPAMA (2T3-12)

D. PALLAVI (2T3-13)

EVITA (2T3-14)

BHANU PRIYADARSHINI (2T3-15)

G. SAI SOWJANYA (2T3-17)

Siva Sivani Institute of Management , Kompally, Hyderabad(2013-2015 )

About SouthWest Airlines

Started Services in Texas in U.S. by Herb Kelleher and Rollin king in 1971.Known as a “discount airline” since 1973.• 737 Boeing Air crafts,• 46000 employees,• 3600 flights per day• Providing services in an approximate of 57,900 customers per day.• 93 destinations over 41 states .

MISSION

• Dedication to the highest quality of customer servicedelivered with a sense of warmth, friendliness,individual pride, and company spirit.

• It primarily provides short haul, high-frequency,point-to-point, low-fare air transportation serviceamong 93 destinations in the United States.

Achievements

• 2014 – Travelers Choice Award.

• 2003 Selected as “AIRLINE FOR THE YEAR”

• 2007 included in top 100 most innovative technologyorganization.

• First airline to establish a home page on internet

• Ranked number one in customer service

• 43 consecutive year of profitability

• How they acquired the #1 position in terms of services providing to customers and what are the strategies they are following to achieve these continuous profitability?

UNIQNESS

• Service

• Operations

• Cost control

• Marketing

• People

• Corporate culture

Southwest Service

• Passengers related activities

• Employees related activities

• They encourage good relations between employees and passengers.

• They made an experiment by giving traditional tickets.

SouthWest Operations

• Own ticketing

• Travel agents – 10% commission, 55% booked by them.

• Flew into uncongested airports which reduced 15%-25%of average flight time.

• Interline baggage–doesn't coordinate with other airlines.

• Drinks and snacks were served

• 84% unionized workforce

• Southwest flew only BOEING 737 JETS.

• The company had 150 that, in total, flew an average of 1,500 trips per day.

• The 737 was the smallest plane in Boeing’s fleet, seating 137 passengers.

• The 737s had an average life of 20 years.

• The average age of Southwest’s planes was seven years, one of the lowest averages in the industry.

SouthWest Cost Control

• Cost control in operations like fuel

• Gate costs and landing fees differ everywhere.

• No. of departures, 10 from each gate.

Marketing

• Expansion in new cities

• Public relations- Sponsored golf tournament

• Ambassadors- customers

People

• Customers are important in selection process, provide feedback in decision making

• Peer hiring, pilot-pilot hiring and line employees- lines employees hiring.

• Cross training- Switch jobs and Broad latitude – serve customers.

• Recognition

• Compensation was low, but the employees had psychological satisfaction

INVERTED PYRAMID APPROACH

Corporate Culture

• The feeling of the place

• Small family and spirit

• Working towards one common goal

SWOT ANALYSIS

Strengths:

• Employee Satisfaction

• Low fares

• Stable profitability

• Scheduled services

• Leadership

• Customer service

Weakness

• No international flights

• Carry small amount of freight and cargo

Opportunities

• Focus on international level.

• Focus on popular destinations.

Threats

• Fluctuation in fuel charges.

Growth Strategy

• Expansion-trouble with facilities

• New cities and routes-not for everyone and everywhere

Marketing entry strategy

• Low operating costs

• Load factor- adding services to balance supply and demand

Fuel hedging (1998)

• Purchased fuel options for years in advance to smooth out fluctuations in fuel costs

• Substantially increased its hedging in 2001 in response to projections of increased crude oil prices

The immediate expansion decision (Delivery of two uncommitted 737’s)

• The first option was to expand within the system and add a new segment directly between Detroit and Phoenix.

• The second option was to enter the Dayton market.

• The final option was to establish a base on the East Coast, initiating service in Baltimore.

Challenges of SouthWest Airlines

• Meeting growth objectives while maintaining focus

• Preserve the SouthWest culture and spirit that had enabled it

1st Option 2nd Option 3rd Option

• Average: $2.50• Detroit and

Phoenix• 3 trips per day• Gate and landing

fees are high• Phoenix- $2.75• Detroit- $3.25• 500 letter written

• Average: $2.5 • Dayton market• 226 miles• 9,70,000 population• Relatively stable• Fare raising• 50 min TAT• Dayton-2.00

• Average: 2.5• Baltimore• 2.4 million people• 611 miles• 90 minutes• Weather conditions• Delays-50%

Thank you!!!!!!