Southwest Airlines Herb Kelleher and Rollin King founded the Southwest Airlines Company in 1971. It was serving the Texas Cities of Dallas, Houston and San Antonio.
In order to analyze the company and its problems, first we need to get familiar with its internal environments (strengths and weaknesses) and its external environments (opportunities and threats).
The company has used from the beginning the same operating style of concentrating on flying to airports that are underutilized and close-in to a metropolitan area. The reason for doing so was because Southwest always competed with surface transportation (more than with other Airlines).
Southwest service strategy includes frequent and on-time departures, point-to-point routes with central hub, short flights and low costs. In order to provide low fare costs, the company has excluded the meal service from its flights, by serving beverages, crackers and other light snacks to the passengers during flights. Another reason for the cost advantage derives from the work force "" the company has the shortest turnaround time, and also, in comparison with other airlines, its pilots fly longer hours, therefore the time is used in a more efficient way.
English: Herbert D. Kelleher (b. 1931), co-founder...
A Southwest Airlines Boeing 737 aircraft parked on...
Southwest Airlines Boeing 737-300(N648SW) painted ...The cost structure of Southwest brings us to another highly visible advantage over other airlines "" the Southwest has been consistently profitable, even in times when other companies in the U.S. airlines industry were seeking bankruptcy protection, and its costs had increased by only about 20% over a decade (1984-1994).
Southwest also emphasizes customer service. It is the company's policy not only to treat the customer in the best way possible, but also to treat employees as internal customers. This way, Southwest becomes a comfortable and fun place to work. "If you are comfortable, you are smiling more and you give better service", says Colleen Barrett (p.7 in the case study text).