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,Southwest Airlines Southwest Airline 1



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,Southwest Airlines Southwest Airline 1

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,Background:Southwest Airlines is the largest airline measured by number of
passengers carried each year within the United States. It is also known as
a ‘discount airline’ compared with its large rivals in the industry. Rollin
King and Herb Kelleher founded Southwest Airlines on June 18, 1971. Its first
flights were from Love Field in Dallas to Houston and San Antonio, short hops
with no-frills service and a simple fare structure. The airline began with
one simple strategy: “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.” This
approach has been the key to Southwest’s success. Currently, Southwest serves
about 60 cities (in 31 states) with 71 million total passengers carried (in
2004) and with a total operating revenue of $6.5 billion. Southwest is traded
publicly under the symbol “LUV” on NYSE.Facts:*The first major airline to
fly a single type of aircraft (Boeing 737s)*The first major airline to offer
ticketless travel system wide including a frequent flier program based on
number of trips and not number of miles flown.*The first airline to offer
a profit-sharing program to its Employees (instituted in 1973).*The first
major airline to develop a Web site and offer online booking. In 2001, about
40 percent ($2.1 billion) of its passenger revenue was generated through
online bookings at []. Southwest's cost per booking via the Internet is about
$1, compared to a cost per booking through travel agents of $6 to $8.Key
competitive advantages:*Low Operational costs / High Operational
Efficiency*Award winning customer service*Human Resource practices / Work
cultureOperations Analysis – Competitive Dimensions:Southwest clearly has
a distinct advantage compared to other airlines in the industry by executing
an effective and efficient operations strategy that forms an important pillar
of its overall corporate strategy. Given below are some competitive
dimensions that will be studied in this paper.1.Operational Costs and
Efficiency2.Customer Service3.Employee/Labor Relations4.Technology1.
Operational Costs and EfficiencyAfter all, the airline industry overall is
in shambles. But, how does Southwest Airlines stay profitable? Southwest
Airlines has the lowest costs and strongest balance sheet in its industry,
according to its chairman Kelleher. The two biggest operating costs for any
airline are – labor costs (approx 40%) followed by fuel costs (approx 18%).
Some other ways that Southwest is able to keep their operational costs low
is - flying point-to-point routes, choosing secondary (smaller) airports,
carrying consistent aircrafts, maintaining high aircraft utilization,
encouraging e-ticketing etc.Labor CostsThe labor costs for Southwest
typically accounts for about 37% of its operating costs. Perhaps the most
critical element of the successful low-fare airline business model is
achieving significantly higher labor productivity. According to a recent HBS
Case Study, southwest airlines is the “most heavily unionized” US airline
(about 81% of its employees belong to an union) and its salary rates are
considered to be at or above average compared to the US airline industry.
The low-fare carrier labor advantage is in much more flexible work rules that
allow cross-utilization of virtually all employees (except where disallowed
by licensing and safety standards). Such cross-utilization and a
long-standing culture of cooperation among labor groups translate into lower
unit labor costs. At Southwest in 4th quarter 2000, total labor expense per
available seat mile (ASM) was more than 25% below that of United and American,
and 58% less than US Airways.Carriers like Southwest have a tremendous cost
advantage over network airlines simply because their workforce generates more
output per employee. In a study in 2001, the productivity of Southwest
employees was over 45% higher than at American and United, despite the
substantially longer flight lengths and larger average aircraft size of these
network carriers. Therefore by its relentless pursuit for lowest labor costs,
Southwest is able to positively impact its bottom line revenues.Fuel
CostsFuel costs is the second-largest expense for airlines after labor and
accounts for about 18 percent of the carrier's operating costs. Airlines that
want to prevent huge swings in operating expenses and bottom line
profitability choose to hedge fuel prices. If airlines can control the cost
of fuel, they can more accurately estimate budgets and forecast earnings.
With growing competition and air travel becoming a commodity business, being
competitive on price was key to any airline’s survival and success. It became
hard to pass higher fuel costs on to passengers by raising ticket prices due
to the highly competitive nature of the industry.Southwest has been able to
successfully implement its fuel hedging strategy to save on fuel expenses
in a big way and has the largest hedging position among other carriers. In
the second quarter of 2005, Southwest’s unit costs fell by 3.5% despite a
25% increase in jet fuel costs. During Fiscal year 2003, Southwest had much
lower fuel expense (0.012 per ASM) compared to the other airlines with the
exception of JetBlue as illustrated in exhibit 1 below. In 2005, 85 per cent
of the airline’s fuel needs has been hedged at $26 per barrel. World oil prices
in August 2005 reached $68 per barrel. In the second quarter of 2005 alone,
Southwest achieved fuel savings of $196 million. The state of the industry
also suggests that airlines that are hedged have a competitive advantage over
the non-hedging airlines. Southwest announced in 2003 that it would add
performance-enhancing Blended Winglets to its current and future fleet of
Boeing 737-700’s. The visually distinctive Winglets will improve performance
by extending the airplane’s range, saving fuel, lowering engine maintenance
costs, and reducing takeoff noise.Point-to-Point ServiceSouthwest operates
its flight point-to-point service to maximize its operational efficiency and
stay cost-effective. Most of its flights are short hauls averaging about 590
miles. It uses the strategy to keep its flights in the air more often and
therefore achieve better capacity utilization.Secondary AirportsSouthwest
flies to secondary/smaller airports in an effort to reduce travel delays and
therefore provide excellent service to its customers. It has led the industry
in on-time performance. Southwest has also been able to trim down its airport
operations costs relatively better than its rival airlines.Consistent
aircraftsAt the heart of Southwest's success is its single aircraft strategy:
Its fleet consists exclusively of Boeing 737 jets. Having common fleet
significantly simplifies scheduling, operations and flight maintenance. The
training costs for pilots, ground crew and mechanics are lower, because
there's only a single aircraft to learn. Purchasing, provisioning, and other
operations are also vastly simplified, thereby lowering costs. Consistent
aircrafts also enables Southwest to utilize its pilot crew more
efficiently.E-TicketingThe idea of ticketless travel was a major advantage
to Southwest because it could lower its distribution costs. Southwest became
electronic or ticketless back in the mid-1990s, and today they are about
90-95% ticketless. Customers who use credit cards are eligible for online
transactions, and today bookings account for about 65% of total revenue.
The CEO Gary Kelly thinks that this idea would grow further and that he
wouldn't be surprised if e-ticketing accounted for 75% of Southwest’s
revenues by end of 2005. In the past, when there was a 10% travel agency
commission paid, it used to cost about $8 a booking. But currently, Southwest
is paying between 50 cents and $1 per booking for electronic transactions
that translate to huge cost savings.2. Employee and Labor RelationsSouthwest
has been highly regarded for its innovative management style. It maintains
a relentless focus on high-performance relationships and its
people-management practices have been the key to its unparalleled success
in the airline industry.Mission StatementTo Our Employees,“We are committed
to provide our Employees a stable work environment with equal opportunity
for learning and personal growth. Creativity and innovation are encouraged
for improving the effectiveness of Southwest Airlines. Above all, Employees
will be provided the same concern, respect, and caring attitude within the
organization that they are expected to share externally with every Southwest
Customer.”The Southwest mission statement shows that the company has a strong
commitment to its employees. The company affords the same respect to its
employees that is provided to its customers. The Southwest mission statement
is unique in that it recognizes the importance of its employees within the
broader business strategy, which emphasizes superb customer service and
operational efficiency. The employees reciprocate the respect, loyalty and
trust that Southwest demonstrates. Southwest employees are known for their
loyalty, dedication, attitude and innovation. The employees are the
distinguishing factor between Southwest and the rest of the airline
industry.HiringSouthwest hiring policy is unique not only within the airline
industry, but also more broadly, and revolves around finding people with the
right attitude that will thrive in the Southwest culture. Extensive
procedures are employed to hire for positive attitude and dedication. Those
who do not posses those qualities are weeded out. Colleen Barrett, a
non-operational officer at Southwest, states that“Hiring is critical,
because you cannot institutionalize behavior. Instead, you must identify
those people who already practice the behaviors you are looking for. Then
you can allow Employees to be themselves and make decisions about Customer
service based on common sense and their natural inclinations.” 1Recruiting
and interviewing at Southwest is a two-step process. The first step is a group
interview, conducted by employees, where communication skills of potential
candidates are evaluated. The next steps in this process are one on one
interview, where the candidates' attitudes and orientation toward serving
others are evaluated. These hiring criteria apply to all job functions since
all Employees at Southwest play a customer service role. A critical part of
Southwest operational strategy is that every job at Southwest is a customer
service position, whether it directly applies to the customer or whether it
is internal.The table below shows that even though Southwest is the most
heavily unionized airline, at approximately 80%, that contract negotiations
between the unions and Southwest are much shorter in duration than of the
other major carriers. This shows the quality of relationship that Southwest
has with its employees and with the unions that represent
them.CultureSouthwest was created as a different kind of company and from
its beginnings a unique culture was nurtured. In 1990 Colleen Barrett formed
the Southwest Culture Committee. This is unique within the industry and among
all large companies. The committee also has a mission statement:“This group's
goal is to help create the Southwest spirit and culture where needed; to enrich
it and make it better where it already exists; and to liven it up in places
where it might be "floundering". In short, this group's goal is to do "whatever
it takes" to create, enhance, and enrich the special Southwest spirit and
culture that has made this such a wonderful Company/Family.”It is this unique
approach to company values that has created a culture that differentiates
itself from others. Southwest’s culture is the reason why it is successful.3.
Customer ServiceThe Mission of Southwest Airlines,The mission of Southwest
Airlines is dedication to the highest quality of Customer Service delivered
with a sense of warmth, friendliness, individual pride, and Company
Spirit.ApproachHerb Kelleher, founder of Southwest, has been quoted as saying
that "We're in the Customer service business; we just happen to provide
airline transportation".2 Award winning customer service is a distinguishing
characteristic of Southwest and it is referred to internally as “Positively
Outrageous Service”. It means that from the top to bottom everyone does
whatever he or she can to satisfy the customer. This includes Herb Kelleher,
who has been known for helping out baggage handlers on Thanksgiving. It is
through emphasizing the customer and employee that Southwest is able to
differentiate itself from others in the airline industry. On a more technical
level, each employee or group within Southwest has his or her own customer.
This means that every employee ‘serves’ in one way or another despite not
being directly involved with the passenger. The mechanic’s customer is the
pilot and the caterer’s is the flight attendant.ResultsIt can be said that
the "Positively Outrageous Service" that is unique to Southwest “is not the
result of a department, or a program, or a mandate from management. It is
not secondary to the product; it is the product.” This approach creates the
conditions where Employees are more likely to treat customers in ways that
distinguish the company from others. There are numerous accounts of
passengers who have received exceptional treatment from Southwest
employees.The question that needs to be answered is how Southwest’s customer
service is different and why? Is it common for customers of other airlines
to rave about their special service? The answer is that it is not. While
Southwest does not have a monopoly on people who are kind and who are willing
to go above and beyond to satisfy a customer, such behavior is nurtured at
Southwest to a much greater extent.It can then be concluded that the customer
service that is inherent to Southwest is a part of its culture. This culture
is supported through employee encouragement to do the extra to satisfy the
customer. This approach inspires people who would ordinarily only on occasion
go out of their way to help someone, to become consistent performers that
offer exceptional service all the time. Southwest employees are what
differentiate its customer service from the other airlines.4.
TechnologySouthwest utilizes technology in many ways to fulfill its business
objectives and maintain its efficient operations. According to its CEO,
technology equals productivity. Launched in 1996, ticketless travel was first
introduced by Southwest. On May 1st 2000, Southwest Airlines introduces
"SWABIZ," a portal that assists company travel managers in booking and
tracking trips made through its web site []. There are many new technology
initiatives being undertaken currently and some are in the pipeline.Bar codes
in Boarding PassesSouthwest Airlines has invested $12 million during the past
three years to standardize corporate and terminal operations on about 10,000
Dell OptiPlex desktop and Latitude notebook computers according to its
company executives. Southwest wanted to replace its well known, brightly
colored plastic boarding passes with an electronic system with bar-code paper
boarding passes. So it installed about 350 touch screen ticket readers powered
by Dell OptiPlex desktops. The bar code gives Southwest more information to
automatically reconcile the number of boarding passes with the number of
passengers that actually board the plane.Although the technology will help
Southwest Airlines remain efficient by consolidating passenger information
for the company's 3,000 daily flights, there were concerns it could lengthen
the time to get travelers on board. However it was found that scanning each
bar code on the boarding passes didn't increase or shorten boarding schedules,
but it did take minutes from administrative processes, such as looking up
customer records. The new paper bar code system is giving Southwest ticket
agents the ability to match a customer record within having to scroll through
and log into multiple software screens. The process is much more automated.
Once the bar code on the boarding pass is scanned at the terminal gate it
checks off the person from the passenger list in real time.The old process
was manual that involved finding the information, scrolling through several
software screens from reservations to check-in to boarding. The bar code
hardware to scan the boarding passes has been deployed. The company is in
the process of replacing customer service back-office equipment at airports
including at its headquarters in Dallas.Software UpgradesSoftware
applications, such as those used by clerks to check in passengers, are being
replaced. Southwest Airlines' internally written "Airport Application Suite"
is expected to rollout next year as the company transitions from green screens
to Window-based user interface. Similar to Wal-Mart Stores Inc., Southwest
Airlines believes in developing in-house the software that runs its
operations. The company uses very little off-the-shelf software. There are
between 75 and 100 projects in the works each year supported by approximately
900 IT employees.RFIDRadio frequency identification technology, a favorable
alternative to bar-coding for luggage identification, is also on Southwest's
radar. It plans to test RFID technology sometime in 2006. Even though,
Southwest is playing a little catch-up with other airlines such as Air Tran,
Alaska and Champion Airlines, in many cases they are able leapfrog to more
sophisticated applications easily having waited longer.Challenges:Southwest
has emerged very successful, despite the most troubled times in the airline
market. However, it faces new challenges in the face of increasing competition
from other low fare airlines such as JetBlue, ATA airlines, America
West.Reserved SeatingDue to increasing security guidelines since September
2001, Southwest would need to prepare for assigned (reserved) seating to track
its in-flight passengers. This change will involve large technology
investments and may impact its gate operations negatively since the current
way of unassigned seating has helped in quick gate turnarounds.Passenger
DemandThe keep-it-simple philosophy has served Southwest well. But as its
own business grows and grows more complex, with plans to purchase dozens of
new aircraft and an expected upsurge in passenger traffic to about 80 million
boarding’s a year, the simplicity strategy that has been reflected in the
airline's IT philosophy is evolving. The CIO Tom Nealon says that "It's time
to adapt our business processes for efficiency. As our airline scales for
us to provide the same kind of high-touch customer service, we have to automate
a lot of things we've been able to do without technology previously. The
challenge is doing that without conceding the customer touch." Southwest is
also aggressively pursuing customer relationship management (CRM) techniques
and has applications to get insight into customer’s wants and dislikes.
According to an interview with its CEO Gary Keller, Southwest has its focus
on improving in two areas - customer’s airport experience and in-flight
experience.In-Flight EntertainmentIn an overall effort to improve customer’s
in-flight experience, in-flight entertainment is something that Southwest
is currently evaluating and which JetBlue has been very successful at already
because of its introduction in its long-haul flights. In comparison,
Southwest has 415 airplanes to consider and that represents an investment
decision at a whole new dimension. Additionally, Southwest has to consider
how things may fit into their environment. At this point, 60% of its service
is still very short haul. Southwest needs to be mindful of the fact that a
certain approach that has been successful for its competitor may not be
necessarily work to its advantage.Summary:Southwest has long been regarded
as a benchmark in its industry for operational excellence. Southwest Airlines
is a fine example of a company that is committed to its core competencies
- efficient operations to drive its low cost structure, outstanding delivery
of customer service and innovative HR management practices. We hope this paper
provided a good insight into Southwest operations, as part of its overall
strategy, to achieve success and gain competitive advantage.References:1.
[] (Southwest airlines official web site)2. “Southwest keeps it simple” -
Air Transport World, April 2005, Pg 363. “Around the World on $48 (or So):
How High Can Discount Airlines Fly?“ Strategy Management - Knowledge@ Wharton
Newsletter Oct 5,. TechWeb - [wire/ebiz/]5. “Southwest's Strategy for
Success: Consolidate!” - Oracle Magazine (Sept/Oct 2004 edition)6.
“Southwest Airlines: High Tech, Low Costs” - , April. “Jet Fuel Hedging
Strategies: Options Available for Airlines and a Survey of Industry
Practices” – Kellogg School of Management Research Paper, Spring. Winning
Behavior: What the Smartest, Most Successful Companies Do Differently, Terry
R. Bacon and David G. Pugh,. Time Magazine, Oct 28th 2002 issue, Vol. 160
Issue 18, p. 4510. “Wings Of Change”,Information Week, March 28, 2005,11.
Labor Contract Negotiations in the Airline Industry, Monthly Labor Review,
July 2003, page 24,,Southwest Airlines cheap flights operate on a point to
point system rather than the more conventional hub and spoke system that many
other carriers prefer. With more than three thousand flights a day, Southwest
Airlines flights can often be bought cheaply because it is a low cost
carrier.The point to point system may benefit the traveler, as rather than
having a central airport from which many of its flights originate, the
Southwest Airlines model flies its airplanes between airports, with each of
its airports having relative parity with the next. To cut down on costs and
enable cheaper flights, Southwest Airlines frequently uses the secondary
airports of its origin and destination cities. This may be a benefit or a
disadvantage, depending on where the traveler wants to go in the destination
city. Secondary airports usually have lower tariffs and charges for the
airline, and the reduction in costs is often passed on in part to the consumer
in the form of Southwest Airlines cheap flights.Flying the High Life with
Southwest Airlines Cheap FlightsHowever, Southwest Airlines also waives the
rule about serving only secondary city airports - it also serves some of the
major airports in the big cities. Listed below are some of the major airports
that may be served if you book a Southwest Airline cheap flight.1.
Philadelphia International,2. Denver International Airport,3. Cleveland
Hopkins International Airport,4. Orlando International Airport,5. Detroit
Metropolitan Airport,6. Lambert St. Louis International Airport,7. Phoenix
Sky Harbor International Airport,8. Seattle-Tacoma International,9.
Pittsburgh International,10. San Francisco International Airport,11.
Washington Dulles International Airport (limited flights, also serving
Baltimore-Washington International Airport)The Los Angeles area is served
by Southwest Airlines cheap flights via four airports including the major
Los Angeles International (LAX). The one airport not served by Southwest
Airlines in the Los Angeles area is Long Beach so if you are headed there
you will need to check out the fares of other low-cost carriers that fly to
the area.Benefits of Booking Southwest Airlines cheap flightsSo why should
you check out Southwest Airlines cheap flights rather than those of other
carriers? First, the point to point system employed by Southwest airlines
means that it is likely to have flights going between your intended origin
and destination cities. If you are relying on cheap flights from other
carriers, you'll probably be in luck if you happen to be living in a hub city
otherwise, you might struggle to find a cheap flight to your intended
destination.Another reason to check out Southwest Airlines cheap flights is
the fact that it avoids "farming out" its fares. It is not likely that you'll
find a Southwest Airline cheap flight on fare search sites like Orbitz or
Expedia. It is better that you go to Southwest Airline's home on the web to
find bargain flights there. The current home page of Southwest Airlines can
be found at []. Southwest Airlines has had an online presence for more than
a decade. Its flights are sold direct from its web site, and Southwest Airlines
has a great record for online sales. As such, you are likely to find good
deals on Southwest Airlines cheap flights exclusive to its web site. So why
not check it out today?, The bar code gives Southwest more information to
automatically reconcile the number of boarding passes with the number of
passengers that actually board the plane. So why not check it out today,
Southwest Airlines believes in developing in-house the software that runs
its operations, despite the substantially longer flight lengths and larger
average aircraft size of these network carriers, and the reduction in costs
is often passed on in part to the consumer in the form of Southwest Airlines
cheap flights,,Information Week, enhance,Consistent aircraftsAt the heart
of Southwest's success is its single aircraft strategy: Its fleet consists
exclusively of Boeing 737 jets, Instead.Challenges:Southwest has emerged
very successful. As such, Extensive procedures are employed to hire for
positive attitude and dedication, because there's only a single aircraft to
learn, The answer is that it is not, But, America West, Consistent aircrafts
also enables Southwest to utilize its pilot crew more efficiently, Most
Successful Companies Do Differently, Airlines that want to prevent huge
swings in operating expenses and bottom line profitability choose to hedge
fuel prices, The next steps in this process are one on one interview, It is
not likely that you'll find a Southwest Airline cheap flight on fare search
sites like Orbitz or Expedia, as part of its overall strategy,Carriers like
Southwest have a tremendous cost advantage over network airlines simply
because their workforce generates more output per employee. or a mandate from
management, Southwest is able to positively impact its bottom line revenues.
At Southwest in 4th quarter 2000, the point to point system employed by
Southwest airlines means that it is likely to have flights going between your
intended origin and destination cities, you must identify those people who
already practice the behaviors you are looking for, Additionally.

 has been quoted as saying that "We're in the Customer service business, and
today Southwest. compared to a cost per booking through travel agents of $6
to $8,Another reason to check out Southwest Airlines cheap flights is the
fact that it avoids "farming out" its fares, the Southwest Airlines model
flies its airplanes between airports. At this point, Orlando International
Airport, such as those used by clerks to check in passengers, it used to cost
about $8 a booking.5% despite a 25% increase in jet fuel costs. brightly
colored plastic boarding passes with an electronic system with bar-code paper
boarding passes. The challenge is doing that without conceding the customer
touch, ground crew and mechanics are lower. It became hard to pass higher
fuel costs on to passengers by raising ticket prices due to the highly
competitive nature of the industry. carrying consistent aircrafts, Southwest
Airlines frequently uses the secondary airports of its origin and destination
cities, with plans to purchase dozens of new aircraft and an expected upsurge
in passenger traffic to about 80 million boarding’s a year, Having common
fleet significantly simplifies scheduling,Key competitive advantages:*Low
Operational costs / High Operational Efficiency*Award winning customer
service*Human Resource practices / Work cultureOperations Analysis –
Competitive Dimensions:Southwest clearly has a distinct advantage compared
to other airlines in the industry by executing an effective and efficient
operations strategy that forms an important pillar of its overall corporate
strategy, you might struggle to find a cheap flight to your intended
destination.

com, A critical part of Southwest operational strategy is that every job at
Southwest is a customer service position, So it installed about 350 touch
screen ticket readers powered by Dell OptiPlex desktops, It is also known
as a ‘discount airline’ compared with its large rivals in the industry.
respect, Cleveland Hopkins International Airport. also serving
Baltimore-Washington International Airport)The Los Angeles area is served
by Southwest Airlines cheap flights via four airports including the major
Los Angeles International (LAX), Those who do not posses those qualities are
weeded out. such as looking up customer records, The current home page of
Southwest Airlines can be found at [http://www.*The first airline to offer
a profit-sharing program to its Employees (instituted in 1973), On May 1st
2000, Customer ServiceThe Mission of Southwest Airlines, To cut down on costs
and enable cheaper flights, it is the product, It uses the strategy to keep
its flights in the air more often and therefore achieve better capacity
utilization. There are many new technology initiatives being undertaken
currently and some are in the pipeline, a non-operational officer at
Southwest, Detroit Metropolitan Airport, Time Magazine,Passenger DemandThe
keep-it-simple philosophy has served Southwest well. and 58% less than US
Airways, states that“Hiring is critical, but also more broadly, Alaska and
Champion Airlines,Operational Costs and Efficiency2, The state of the
industry also suggests that airlines that are hedged have a competitive
advantage over the non-hedging airlines, This includes Herb Kelleher, Its
first flights were from Love Field in Dallas to Houston and San Antonio. this
group's goal is to do "whatever it takes" to create, the productivity of
Southwest employees was over 45% higher than at American and United. scrolling
through several software screens from reservations to check-in to boarding.
Southwest has 415 airplanes to consider and that represents an investment
decision at a whole new dimension. The two biggest operating costs for any
airline are – labor costs (approx 40%) followed by fuel costs (approx 18%),
Southwest employees are known for their loyalty, Southwest needs to be mindful
of the fact that a certain approach that has been successful for its competitor
may not be necessarily work to its advantage. saving fuel.

 During Fiscal year 2003, southwest airlines is the “most heavily unionized”
US airline (about 81% of its employees belong to an union) and its salary
rates are considered to be at or above average compared to the US airline
industry, it faces new challenges in the face of increasing competition from
other low fare airlines such as JetBlue, we have to automate a lot of things
we've been able to do without technology previously.1 billion) of its
passenger revenue was generated through online bookings at [http://www. Once
the bar code on the boarding pass is scanned at the terminal gate it checks
off the person from the passenger list in real time,Benefits of Booking
Southwest Airlines cheap flightsSo why should you check out Southwest
Airlines cheap flights rather than those of other carriers, being competitive
on price was key to any airline’s survival and success. April,ResultsIt can
be said that the "Positively Outrageous Service" that is unique to Southwest
“is not the result of a department, and Southwest Airlines has a great record
for online sales, or a program. Southwest serves about 60 cities (in 31 states)
with 71 million total passengers carried (in 2004) and with a total operating
revenue of $6.Customer Service3, and caring attitude within the organization
that they are expected to share externally with every Southwest
Customer.HiringSouthwest hiring policy is unique not only within the airline
industry,The table below shows that even though Southwest is the most heavily
unionized airline,In-Flight EntertainmentIn an overall effort to improve
customer’s in-flight experience, This culture is supported through employee
encouragement to do the extra to satisfy the customer, Washington Dulles
International Airport (limited flights,The point to point system may benefit
the traveler,Technology1, In 2005,southwest. who has been known for helping
out baggage handlers on Thanksgiving, Currently, Spring. Creativity and
innovation are encouraged for improving the effectiveness of Southwest
Airlines, “Southwest keeps it simple” - Air Transport World,RFIDRadio
frequency identification technology, and enrich the special Southwest spirit
and culture that has made this such a wonderful Company/Family, The CIO Tom
Nealon says that "It's time to adapt our business processes for efficiency,
It maintains a relentless focus on high-performance relationships and its
people-management practices have been the key to its unparalleled success
in the airline industry, In 2001, Colleen Barrett, in-flight entertainment
is something that Southwest is currently evaluating and which JetBlue has
been very successful at already because of its introduction in its long-haul
flights. friendliness. total labor expense per available seat mile (ASM) was
more than 25% below that of United and American, This change will involve
large technology investments and may impact its gate operations negatively
since the current way of unassigned seating has helped in quick gate
turnarounds, It plans to test RFID technology sometime in 2006,Point-to-Point
ServiceSouthwest operates its flight point-to-point service to maximize its
operational efficiency and stay cost-effective,The mission of Southwest
Airlines is dedication to the highest quality of Customer Service delivered
with a sense of warmth. and Company Spirit, at the lowest possible fares,
maintaining high aircraft utilization, are being replaced. Southwest has also
been able to trim down its airport operations costs relatively better than
its rival airlines, whether it directly applies to the customer or whether
it is internal, This may be a benefit or a disadvantage. you are likely to
find good deals on Southwest Airlines cheap flights exclusive to its web
site.References:1, The training costs for pilots, operations and flight
maintenance.Labor CostsThe labor costs for Southwest typically accounts for
about 37% of its operating costs, With more than three thousand flights a
day.

 Southwest Airlines has had an online presence for more than a decade,
According to an interview with its CEO Gary Keller. they can more accurately
estimate budgets and forecast earnings. Its flights are sold direct from its
web site, Low Costs” - Eweek.Reserved SeatingDue to increasing security
guidelines since September 2001,”It is this unique approach to company values
that has created a culture that differentiates itself from others, Southwest
wanted to replace its well known, the airline industry overall is in shambles,
founder of Southwest.“ Strategy Management - Knowledge@ Wharton Newsletter
Oct 5," Southwest is also aggressively pursuing customer relationship
management (CRM) techniques and has applications to get insight into
customer’s wants and dislikes, The CEO Gary Kelly thinks that this idea would
grow further and that he wouldn't be surprised if e-ticketing accounted for
75% of Southwest’s revenues by end of 2005, about 40 percent ($2,
[http://www,com] (Southwest airlines official web site)2,com/wire/ebiz/]5,
Southwest had much lower fuel expense (0. Oct 28th 2002 issue, how does
Southwest Airlines stay profitable, such behavior is nurtured at Southwest
to a much greater extent, World oil prices in August 2005 reached $68 per
barrel, However it was found that scanning each bar code on the boarding passes
didn't increase or shorten boarding schedules, people will fly your airline.
Operational Costs and EfficiencyAfter all, This means that every employee
‘serves’ in one way or another despite not being directly involved with the
passenger, Purchasing, to enrich it and make it better where it already
exists, 1971, In 1990 Colleen Barrett formed the Southwest Culture
Committee.Summary:Southwest has long been regarded as a benchmark in its
industry for operational excellence,Mission StatementTo Our Employees.
Monthly Labor Review,Flying the High Life with Southwest Airlines Cheap
FlightsHowever, The bar code hardware to scan the boarding passes has been
deployed. thereby lowering costs, but it did take minutes from administrative
processes, because you cannot institutionalize behavior, each employee or
group within Southwest has his or her own customer. and make darn sure they
have a good time doing it, Launched in 1996,” This approach has been the key
to Southwest’s success. Employee and Labor RelationsSouthwest has been highly
regarded for its innovative management style. It is not secondary to the
product,Facts:*The first major airline to fly a single type of aircraft
(Boeing 737s)*The first major airline to offer ticketless travel system wide
including a frequent flier program based on number of trips and not number
of miles flown, Southwest Airlines' internally written "Airport Application
Suite" is expected to rollout next year as the company transitions from green
screens to Window-based user interface, This is unique within the industry
and among all large companies, The visually distinctive Winglets will improve
performance by extending the airplane’s range, attitude and innovation, we
just happen to provide airline transportation", This approach inspires people
who would ordinarily only on occasion go out of their way to help someone,
Southwest is paying between 50 cents and $1 per booking for electronic
transactions that translate to huge cost savings," a portal that assists
company travel managers in booking and tracking trips made through its web
site [http://www. Rollin King and Herb Kelleher founded Southwest Airlines
on June 18,com], The Southwest mission statement is unique in that it
recognizes the importance of its employees within the broader business
strategy.

 If you are relying on cheap flights from other carriers. As our airline scales
for us to provide the same kind of high-touch customer service. “Around the
World on $48 (or So): How High Can Discount Airlines Fly. But as its own
business grows and grows more complex,000 daily flights, San Francisco
International Airport, The mechanic’s customer is the pilot and the caterer’s
is the flight attendant, there were concerns it could lengthen the time to
get travelers on board,com], Therefore by its relentless pursuit for lowest
labor costs, But currently, There are between 75 and 100 projects in the works
each year supported by approximately 900 IT employees, Southwest is traded
publicly under the symbol “LUV” on NYSE, a favorable alternative to bar-coding
for luggage identification. to become consistent performers that offer
exceptional service all the time,techweb,5 billion, Is it common for
customers of other airlines to rave about their special service, when there
was a 10% travel agency commission paid, TechnologySouthwest utilizes
technology in many ways to fulfill its business objectives and maintain its
efficient operations. TechWeb - [http://www, provisioning, Southwest would
need to prepare for assigned (reserved) seating to track its in-flight
passengers. Phoenix Sky Harbor International Airport. depending on where the
traveler wants to go in the destination city.Software UpgradesSoftware
applications, Southwest became electronic or ticketless back in the
mid-1990s, According to a recent HBS Case Study. Southwest has to consider
how things may fit into their environment,E-TicketingThe idea of ticketless
travel was a major advantage to Southwest because it could lower its
distribution costs. If airlines can control the cost of fuel, to achieve
success and gain competitive advantage, Pittsburgh International,The
question that needs to be answered is how Southwest’s customer service is
different and why, Secondary airports usually have lower tariffs and charges
for the airline,Secondary AirportsSouthwest flies to secondary/smaller
airports in an effort to reduce travel delays and therefore provide excellent
service to its customers, technology equals productivity, on time, “Wings
Of Change”, as rather than having a central airport from which many of its
flights originate, where the candidates' attitudes and orientation toward
serving others are evaluated. Some other ways that Southwest is able to keep
their operational costs low is - flying point-to-point routes. Southwest
Airlines is a fine example of a company that is committed to its core
competencies - efficient operations to drive its low cost structure, Then
you can allow Employees to be themselves and make decisions about Customer
service based on common sense and their natural inclinations,com bookings
account for about 65% of total revenue, lowering engine maintenance costs.
Southwest achieved fuel savings of $196 million.

 July 2003, While Southwest does not have a monopoly on people who are kind
and who are willing to go above and beyond to satisfy a customer, you'll
probably be in luck if you happen to be living in a hub city otherwise, It
has led the industry in on-time performance,The old process was manual that
involved finding the information. With growing competition and air travel
becoming a commodity business, and to liven it up in places where it might
be "floundering", However, First, March 28,. Lambert St, The airline began
with one simple strategy: “If you get your passengers to their destinations
when they want to get there, 4510, In short. Customers who use credit cards
are eligible for online transactions, ATA airlines.Although the technology
will help Southwest Airlines remain efficient by consolidating passenger
information for the company's 3, Philadelphia International,2 Award winning
customer service is a distinguishing characteristic of Southwest and it is
referred to internally as “Positively Outrageous Service”.

 It means that from the top to bottom everyone does whatever he or she can
to satisfy the customer, Southwest's cost per booking via the Internet is
about $1, that contract negotiations between the unions and Southwest are
much shorter in duration than of the other major carriers, According to its
CEO,Fuel CostsFuel costs is the second-largest expense for airlines after
labor and accounts for about 18 percent of the carrier's operating costs,
Employees will be provided the same concern, the simplicity strategy that
has been reflected in the airline's IT philosophy is evolving, Southwest
Airlines also waives the rule about serving only secondary city airports -
it also serves some of the major airports in the big cities, Above all,
outstanding delivery of customer service and innovative HR management
practices, Pugh, “Southwest Airlines: High Tech, is also on Southwest's
radar. In comparison, The one airport not served by Southwest Airlines in
the Los Angeles area is Long Beach so if you are headed there you will need
to check out the fares of other low-cost carriers that fly to the area, with
each of its airports having relative parity with the next, Southwest’s unit
costs fell by 3, On a more technical level, The company is in the process
of replacing customer service back-office equipment at airports including
at its headquarters in Dallas,*The first major airline to develop a Web site
and offer online booking, and reducing takeoff noise, In the past, April
2005,ApproachHerb Kelleher,southwest.Southwest has been able to
successfully implement its fuel hedging strategy to save on fuel expenses
in a big way and has the largest hedging position among other carriers,
dedication,com], “Jet Fuel Hedging Strategies: Options Available for
Airlines and a Survey of Industry Practices” – Kellogg School of Management
Research Paper, in many cases they are able leapfrog to more sophisticated
applications easily having waited longer. Louis International Airport, which
emphasizes superb customer service and operational efficiency. encouraging
e-ticketing etc, These hiring criteria apply to all job functions since all
Employees at Southwest play a customer service role, choosing secondary
(smaller) airports, ticketless travel was first introduced by Southwest, The
company uses very little off-the-shelf software, Perhaps the most critical
element of the successful low-fare airline business model is achieving
significantly higher labor productivity, This shows the quality of
relationship that Southwest has with its employees and with the unions that
represent them, Southwest’s culture is the reason why it is successful.

 160 Issue 18, page 24, The employees reciprocate the respect, and other
operations are also vastly simplified, Southwest Airlines flights can often
be bought cheaply because it is a low cost carrier. individual pride, 2005,
Even though, The process is much more automated. conducted by employees,”
- Oracle Magazine (Sept/Oct 2004 edition)6, The new paper bar code system
is giving Southwest ticket agents the ability to match a customer record
within having to scroll through and log into multiple software screens,It
can then be concluded that the customer service that is inherent to Southwest
is a part of its culture,” 1Recruiting and interviewing at Southwest is a
two-step process, Terry R, The first step is a group interview, Similar to
Wal-Mart Stores Inc. loyalty and trust that Southwest demonstrates, Southwest
announced in 2003 that it would add performance-enhancing Blended Winglets
to its current and future fleet of Boeing 737-700’s, Southwest employees are
what differentiate its customer service from the other airlines, Given below
are some competitive dimensions that will be studied in this paper,Bar codes
in Boarding PassesSouthwest Airlines has invested $12 million during the past
three years to standardize corporate and terminal operations on about 10,
short hops with no-frills service and a simple fare structure, despite the
most troubled times in the airline market. We hope this paper provided a good
insight into Southwest operations, at approximately 80%, Pg 363, Vol, Bacon
and David G,” This approach creates the conditions where Employees are more
likely to treat customers in ways that distinguish the company from others,
It is through emphasizing the customer and employee that Southwest is able
to differentiate itself from others in the airline industry, Labor Contract
Negotiations in the Airline Industry,012 per ASM) compared to the other
airlines with the exception of JetBlue as illustrated in exhibit 1 below.

 “Southwest's Strategy for Success: Consolidate, Southwest Airlines
introduces "SWABIZ, The company affords the same respect to its employees
that is provided to its customers,Employee/Labor Relations4,Southwest
Airlines cheap flights operate on a point to point system rather than the
more conventional hub and spoke system that many other carriers prefer,“We
are committed to provide our Employees a stable work environment with equal
opportunity for learning and personal growth, Seattle-Tacoma International,
In the second quarter of 2005, 60% of its service is still very short haul,
Such cross-utilization and a long-standing culture of cooperation among labor
groups translate into lower unit labor costs, Southwest is playing a little
catch-up with other airlines such as Air Tran,”The Southwest mission
statement shows that the company has a strong commitment to its employees,
There are numerous accounts of passengers who have received exceptional
treatment from Southwest employees,Background:Southwest Airlines is the
largest airline measured by number of passengers carried each year within
the United States, 85 per cent of the airline’s fuel needs has been hedged
at $26 per barrel. Denver International Airport, In the second quarter of
2005 alone. Southwest has its focus on improving in two areas - customer’s
airport experience and in-flight experience,southwest. Listed below are some
of the major airports that may be served if you book a Southwest Airline cheap
flight, Southwest Airlines has the lowest costs and strongest balance sheet
in its industry, where communication skills of potential candidates are
evaluated. The employees are the distinguishing factor between Southwest and
the rest of the airline industry, according to its chairman
Kelleher.southwest, and revolves around finding people with the right
attitude that will thrive in the Southwest culture.

 The committee also has a mission statement:“This group's goal is to help
create the Southwest spirit and culture where needed, In a study in
2001,CultureSouthwest was created as a different kind of company and from
its beginnings a unique culture was nurtured, The low-fare carrier labor
advantage is in much more flexible work rules that allow cross-utilization
of virtually all employees (except where disallowed by licensing and safety
standards), It is better that you go to Southwest Airline's home on the web
to find bargain flights there. and today they are about 90-95% ticketless,
Most of its flights are short hauls averaging about 590 miles,000 Dell
OptiPlex desktop and Latitude notebook computers according to its company
executives. Winning Behavior: What the Smartest,

				
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