Southwest Airlines 2008
Case #20 – Southwest Airlines
Company History
1966 Rollin King approached Herb Kelleher’s law office with plan to start low-cost/lowfare airline
Ran into legal problems, rival airlines in Texas did everything they could to block new airline Herb Kelleher was determined to start up airline
1971 – Lamar Muse Southwest CEO, background in industry to get it up and starting
Raised $7 million in capital and private investors to purchase planes and equipment
Flights started between Dallas, San Antonio, and Houston known as the “Golden
Triangle”
First ever annual profit in 1973
2010 – market share leader in domestic air travel in US, consistently profitable even during down turning economy, profit every year since 1973
Number of passengers increased by more than 28 million
1. Is there anything that you find particularly impressive about Southwest Airlines?
One of the most impressive characteristics about Southwest Airlines is their fun, loving, determined company culture that believes first in making employees happy which then results in happy customers. Herb Kelleher was adamant about listening and allowing employees to think and to most importantly be heard. The strong value of the happiness of their spunky employees is their competitive advantage against other rival airlines in the industry. Southwest is able to create a competitive advantage not only with their low prices but also offering a fun and humorous experience when flying. Another characteristic of Southwest that is impressive is Herb
Kelleher’s role in the company even after stepping down and retiring from the CEO position and that he will remain a Southwest employee till July 2014. His decision to stay active in the company reflects his dedication and passion for the future success of Southwest Airlines.
2. What grade would you give Southwest management for the job it has done in crafting the company’s strategy? What is it that you like or dislike about the
Company History
1966 Rollin King approached Herb Kelleher’s law office with plan to start low-cost/lowfare airline
Ran into legal problems, rival airlines in Texas did everything they could to block new airline Herb Kelleher was determined to start up airline
1971 – Lamar Muse Southwest CEO, background in industry to get it up and starting
Raised $7 million in capital and private investors to purchase planes and equipment
Flights started between Dallas, San Antonio, and Houston known as the “Golden
Triangle”
First ever annual profit in 1973
2010 – market share leader in domestic air travel in US, consistently profitable even during down turning economy, profit every year since 1973
Number of passengers increased by more than 28 million
1. Is there anything that you find particularly impressive about Southwest Airlines?
One of the most impressive characteristics about Southwest Airlines is their fun, loving, determined company culture that believes first in making employees happy which then results in happy customers. Herb Kelleher was adamant about listening and allowing employees to think and to most importantly be heard. The strong value of the happiness of their spunky employees is their competitive advantage against other rival airlines in the industry. Southwest is able to create a competitive advantage not only with their low prices but also offering a fun and humorous experience when flying. Another characteristic of Southwest that is impressive is Herb
Kelleher’s role in the company even after stepping down and retiring from the CEO position and that he will remain a Southwest employee till July 2014. His decision to stay active in the company reflects his dedication and passion for the future success of Southwest Airlines.
2. What grade would you give Southwest management for the job it has done in crafting the company’s strategy? What is it that you like or dislike about the