This case study examines these issues and tries to proffer solutions to them.
Key Issues: Southwest faces a challenging future despite several years of success as America’s only profitable Airline. The very basis of those successes is about to be tested with a looming negotiations with its ‘best-paid’ Pilot union and the coming end of fuel hedging contract. There is also the problem of the record rate of unemployment and the general economic outlook that is gloomy to say the least. These indeed are challenging times that the organization is faced with. But behind these challenges are opportunities that it can exploit to remain indeed a profitable Airline.
Define the Problem & the Opportunity. Many of the problems faced by Southwest Airlines are indeed out of its control. The global economic situation and the attending employment crisis are some of those. With the Wall Street Journal reports of “investors fretting over a sluggish economy and early evidence of decelerating revenue growth ahead of the busy holiday weekend” while recently analyzing the Airline industry as a whole.
But within the reach or immediate control of Southwest is its looming negotiation with its Pilots Union. While the relationship between the...