Southwest Airlines Case Study
Southwest Airlines Case Study
1. Southwest Airlines was successful for many reasons, including low airfare cost, “quick turns” , and “spider web” system. But, probably most important was their Corporate Culture of putting their employees first and really taking care of them. Southwest believes by doing this makes their employees happy and in turn, they will take care of them….. and ultimately that means repeat business.
2. Southwest’s quick turns allowed for them to have twice the industry average number of flights per plane per day. Its planes were in the air 12 hours a day (compared to the industry average of 8 hours). Southwest did this by offering no frills, low cost flights to and from secondary airports. Management’s focus was the short haul, point to point strategy, which advocated short flights to uncrowded airports for quick turns. Southwest also chose to use the spider web system because the hub and spoke network tied up too many valuable assets at too few pressure points, whereas a spider web system allowed maximum flexibility to disperse assets and reduce stress in the system. Southwest’s 10 – 15 minute turns became an advantage and allowed them to be more profitable by being more time efficient, offer more flights, and spend less time on the ground and instead, in the air where they were making money. Southwest’s competitors weren’t as profitable and some failed because they spent too much time on the ground, focused on more glamorous routes, and used the hub and spoke system in which big planes flew to major airports (hubs) and then linked up with smaller airports (spokes).
3. Challenges facing Southwest in the future: * Turnover in senior management * Adverse labor relations * Competition (new, low cost/fare carriers that copied and improved upon Southwest’s model)
How should Southwest meet those challenges: * Parker, appointed by Kelleher in 2001, stated he would step down in 2004. Southwest appointed Kelly,
1. Southwest Airlines was successful for many reasons, including low airfare cost, “quick turns” , and “spider web” system. But, probably most important was their Corporate Culture of putting their employees first and really taking care of them. Southwest believes by doing this makes their employees happy and in turn, they will take care of them….. and ultimately that means repeat business.
2. Southwest’s quick turns allowed for them to have twice the industry average number of flights per plane per day. Its planes were in the air 12 hours a day (compared to the industry average of 8 hours). Southwest did this by offering no frills, low cost flights to and from secondary airports. Management’s focus was the short haul, point to point strategy, which advocated short flights to uncrowded airports for quick turns. Southwest also chose to use the spider web system because the hub and spoke network tied up too many valuable assets at too few pressure points, whereas a spider web system allowed maximum flexibility to disperse assets and reduce stress in the system. Southwest’s 10 – 15 minute turns became an advantage and allowed them to be more profitable by being more time efficient, offer more flights, and spend less time on the ground and instead, in the air where they were making money. Southwest’s competitors weren’t as profitable and some failed because they spent too much time on the ground, focused on more glamorous routes, and used the hub and spoke system in which big planes flew to major airports (hubs) and then linked up with smaller airports (spokes).
3. Challenges facing Southwest in the future: * Turnover in senior management * Adverse labor relations * Competition (new, low cost/fare carriers that copied and improved upon Southwest’s model)
How should Southwest meet those challenges: * Parker, appointed by Kelleher in 2001, stated he would step down in 2004. Southwest appointed Kelly,