1. How does Southwest Airlines compete? What are its advantages relative to other airlines? 2. The plane turnaround process requires coordination among twelve functional groups at SWA to service, in a brief period of time, an incoming plane and match it up with its new passengers and baggage for a prompt departure. Please evaluate the plane turnaround process at Baltimore -- resource utilization, capacity, bottlenecks, information flows, etc. How is the process working? 3. Why is the opearational performance at Baltimore eroding? What issues do you identify that require action? 4. What would you recommend Matt Hafner do? Answer please see attachment:
1 The competitive advantages of Southwest Airlines are as follow:
A. Unique operation system Unlike its industrial rivals who used the “hub and spoke” system, Southwest Airlines established its own point-to-point system instead. Even though economic theories tell Southwest’s system should be unworkable – the shorter the flight is, the higher the setup cost per seat mile, thanks to the well-known quick and efficient turnaround process, Southwest succeeded in creating a miracle. The point-to-point system not only enables Southwest to lower its costs and make frequent flights, but also to capture a niche market and compete with other transportation like trains and buses. This is because Southwest is able to provide passengers with short-hauling flights which can be substitutes to trains and buses. Consequently, it earns a considerable profit from the expanded market size.
B. Low costs Southwest is operating at a lower cost when comparing with its competitors. It minimizes its cost in four main ways:
1.The quick turnaround process: Southwest focuses on turning aircraft around quickly at the gate to minimize an airplane’s time on the ground. They do so by the relational coordination of their operation agents, which would be further discussed in Q2. 2.The use of a single aircraft type: Southwest uses only Boeing 737 and standardizes the cockpit configuration. These minimize additional training requirements for pilots and routinize ramp operations, which helps to save training costs and speed turnarounds at the gate. 3.The use of less-congested airports: Southwest uses such airports to avoid disrupting flight operations in those busy and high-traffic airports. 4.Cheap oil price: Southwest constantly monitors fuel prices at different airports and load fuels from places with attractive price. 5.Other practices like offering beverages and snacks instead of in-flight meals, transferring no baggage to other airlines, and open and single class seating can also help lower the operating costs.
C. A productive and loyal workforce Southwest places great emphasis on hiring team players willing to go beyond their primary responsibilities. They invest substantial amounts of time selecting employees for attitude, teamwork, and service orientation, resulting in a strong corporate culture of valuing excellent customer service. Meanwhile, Southwest also strives to build a loyal workforce. It treats its employees as family members and creates an enjoyable working environment. Employees’ opinions and suggestions are listened to and respected.
2. The plane turnaround process at Baltimore is quick and efficient due to (1) Process simplification and (2) Relational coordination powered by its operation agents. The process is said to be simplified relative to other airline companies because Southwest Airlines provides no-frill services – no in-flight meals and no transfer of baggage to other airlines. These lead to time reduction in the restock of provisions, cleaning of cabin area and handling of baggage. Moreover, Southwest also adopts the open seating system to encourage early gate arrival. The two practices thus speed up the turnaround process.
In addition, Southwest has increased its staffing of operations agents to a higher level than the industrial average,...