Southwest case

Topics: Southwest Airlines, Airline, Baltimore-Washington International Thurgood Marshall Airport Pages: 23 (10569 words) Published: April 20, 2015
9-602-156
JUNE 21, 2002

ROGELIO OLIVA
JODY HOFFER GITTELL

Southwest Airlines in Baltimore
Matt Hafner, the Southwest Airlines station manager1 at Baltimore Washington International Airport (BWI), slowly shook his head. It was June 7, 2001, and he had just received the final operating performance numbers for May. Station performance had certainly improved since his arrival at Baltimore 11 months before, thanks to an intense focus on hiring and controls. Still, he knew there was a long way to go. Matt2 had been with Southwest for 10 years and had worked in many different stations, from the smallest to now one of the largest. Baltimore was already bigger than Chicago and might even overtake Phoenix and Las Vegas, for Matt knew that Southwest planned to expand the Baltimore operation rapidly over the next few years. He wondered how the station could accommodate the additional growth when its operational performance still lagged Southwest’s system-wide average (see Exhibit 1).

An Overview of Southwest’s Strategy
Unlike the major U.S. airlines, Southwest Airlines viewed the car and bus as its chief competition. Advanced by Rollin King and Herb Kelleher, the company’s founders, this notion permeated the company and drove its commitment to the most inexpensive fares and most frequent flights (up to 10 a day) between urban markets separated by 500 miles or less. This too flew in the face of prevalent industry practice, in which a “hub and spoke” system consolidated passengers from small markets at hub airports to assure relatively full planes for long-haul flights. It also meant that Southwest planes spent less time aloft relative to other carriers’ planes. The time Southwest aircraft spent on the ground, as well as the physical stress on aircraft from a higher frequency of take-offs and landings, was costly and labor intensive: on the ground, a wide array of specialized handlers serviced the planes and processed the passengers.

1 Southwest referred to each airport where it had a presence as a station. 2 In keeping with the informal style of address used in this organization, we use first names for all employees.

________________________________________________________________________________________________________________ This case derives from an earlier case, “Southwest Airlines in Baltimore,” HBS No. 602-101, prepared by Professors Jody Hoffer Gittell and Rogelio Oliva. The case was prepared with assistance from Research Associate Anne D. Karshis and from Victor Rivas of the Massachusetts Institute of Technology Global Airline Industry Program. This version was prepared by Senior Researcher David Lane, Global Research Group, under the supervision of Professors Rogelio Oliva of Harvard Business School and Jody Hoffer Gittell of the Heller School for Social Policy and Management at Brandeis University. HBS cases are developed solely as the basis for class discussion. Cases are not intended to serve as endorsements, sources of primary data, or illustrations of effective or ineffective management. Copyright © 2002 President and Fellows of Harvard College. To order copies or request permission to reproduce materials, call 1-800-545-7685, write Harvard Business School Publishing, Boston, MA 02163, or go to http://www.hbsp.harvard.edu. No part of this publication may be reproduced, stored in a retrieval system, used in a spreadsheet, or transmitted in any form or by any means—electronic, mechanical, photocopying, recording, or otherwise—without the permission of Harvard Business School.

Purchased by matthew gibbons (mattgibbons2@gmail.com) on January 23, 2013

602-156

Southwest Airlines in Baltimore

Southwest Airlines adopted a number of operating strategies to reduce operating costs and offset the productivity disadvantages inherent in short-haul, point-to-point flying. First and foremost, Southwest focused on turning aircraft around quickly at the gate to minimize an airplane’s time on the...
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