Southwest Airlines Case Study

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This Case Study Analysis will attempt to take an objective look at the key issues and underlying implications of Southwest Airlines with respect to its impact on the airline industry. It will offer meaningful recommendations and plans for implementation.

This will be done by looking at Southwest’s pricing strategies, costs, and competition and putting it in context with the industry as a whole.

History, Development, and Growth

Southwest, founded by Rollin King and Herb Kelleher, began as a small Texan airline almost 35 years ago and has grown to become one of the largest airlines in America. It was created on the following premise: “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!” (www.southwest.com) Today Southwest Airlines flies more than 70 million passengers a year to 60 great cities all across the country, and they do it more than 3,000 times a day. They have 436 of the newest jets in the nation, with each plane being an average age of 9 years. (www.southwest.com) Southwest’s combination of low fares, outstanding customer service, and strong leadership have helped the airline remain profitable even in the midst of tragedies like the terrorist attacks on September 11, 2001.

Internal Strengths and Weaknesses
Southwest was set up for success from the beginning because of its unique upside-down organizational structure. Upper management is at the bottom and supports the front line employees, who are the real experts. Kelleher’s unorthodox leadership style, in which everyone in the company makes management decisions, is largely unheard of these days. The company doesn’t place much emphasis on structure; rather employees are encouraged to think freely without constraints such as titles. This, in addition to a profit-sharing program (first in the airline industry), higher salaries than any other...
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