Southwest Airline Case Study

Topics: Southwest Airlines, Airline, Low-cost carrier Pages: 44 (15763 words) Published: April 13, 2008
Southwest Airlines has been a model of admiration for the airline industry and businesses from around the world combined. Southwest Airlines is a rag to riches story that has had to fight for everything it has become. Before Southwest was able to take on its first passengers, they had to fight competitors in the court system for nearly three and a half years. In 1966, Fortune Magazine states, “A San Antonio lawyer, Herb Kelleher, founded Southwest with one of his clients (now a Board member) over drinks at a local bar.” Southwest was started in a bar on a cocktail napkin. Fortune Magazine quoted Mr. Kelleher, “it was at the St. Anthony’s Club in San Antonio, Texas that Rollin King came to me with the idea of starting a low-fare airline in Texas.” Southwest did not make its maiden voyage until 1971 – from a napkin to the airways with their runway in the Court system. When Texas Aeronautics Commission authorized Southwest to fly, their competitors grounded them within the Court system with continuous litigation for three and a half years. The litigation went as high as the Supreme Court. Finally, on June 18, 1971, Rollin King and Herb Kelleher started an airline service 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 darn sure they have a good time doing it, people will fly your airline." They were right about that. Southwest Airline is now a major airline, in fact, the fourth largest airliner in the United States. Thousands of people travel by air; Southwest Airlines provides low-fare air transportation service among 58 cities in the United States. Although the industry suffered a major blow from the terrorist attack of September 11th, the company is still holding strong; while other airline companies are in debt. The information was majority gathered and analyzed from the internet; sources such as "News Week," and "Wall Street Journal." According to the acquired knowledge of Southwest, the company maintains steady sales. The major success to their continued success is due to their low-cost model and competitors are aware that they cannot match Southwest Airlines low prices therefore, by dropping the price even lower; Southwest Airlines can force a company to go bankrupt. The mission of Southwest Airlines is dedication to the highest quality of customer service delivered 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 service among 62 cities in the United States. Southwest is extremely committed to their employees. They believe in providing a stable work environment with equal opportunity for learning and personal growth. Creativity and innovation are encouraged for improving the effectiveness of Southwest Airlines. Above all, Employees will be provided the same concern, respect, and caring attitude within the organization that they are expected to share externally with every Southwest Customer. Key Personel within the organization are as follows:

Herbert (Herb) D. Kelleher: Chairman of the Board, Chairman of the Executive Committee, former CEO and co-founder of Southwest Airlines James (Jim) F. Parker: Vice Chairman of the Board and CEO
Colleen C. Barrett: President, Chief Operating Officer, and Director of Operations Gary C. Kelly: Chief Financial Officer and E.V.P.
All employees: The Southwest culture depicts all their employees as the foremost most important aspect of their company. Organization of Southwest Airlines is described as an upside-down pyramid. The upper management is at the bottom and supports the front line employees, who are the experts. This is Herb Kelleher's unorthodox leadership style, in which management decisions are made by everyone in the organization, not just the head executives. The company is described to not have much emphasis on structure;...
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