Southwest Airlines

Introduction

Southwest Airlines was incorporated in Texas and commenced Customer Service on June 18, 1971 with three Boeing 737 aircraft serving three Texas cities-Houston, Dallas, and San Antonio. Today, Southwest operates 537 Boeing 737 aircraft between 68 cities. Southwest topped the monthly domestic originating passenger ranking for the first time in May 2003. Year-ending result for 2009 marked Southwest 37th consecutive year of profitability. Southwest became a major airline in 1989 when it exceeded the billion-dollar revenue mark, Southwest is the United States’ most successful low-fare, high frequency, point-to-point carrier. Southwest operates more than 3,200 flights a day coast-to-coast, making it the largest U.S. carrier based on domestic passengers’ carrier as of September 30, 2009 (Southwest Airlines Fact Sheet, 2010.

Southwest’s success may be due largely to its unusual focus on creating value for employees. “LUV” and “FUN”, the cornerstones of Southwest’s employees-relations approach, represent concern and respect for the individuals, as well as the conscious creation of an environment that encourages all employees to have fun on the job. Southwest’s low turnover and high productivity suggest that the airline creates significant value for employees (Hallowell, 1996).

Southwest’s success is also dependent on its organizational capabilities that enable it to convert some of the value created for employees to customers and shareholder value. Thus Southwest provides an example of competitive advantage created thru people (Hallowell, 1996).

The creation and maintenance of Southwest’s competitive advantage can be seen as an honorable cycle. Describing this cycle requires theories of incentives, organizational capab...

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...uthwest Passengers Let off Some Steam, 2007).

Every company must remember that customer satisfaction is the number one element to ensure the company’s now and future success, And when consumers feel that they are no longer valued as an asset they will run to the company’s competitors even if it means spending a little more money to feel that wonderful feeling of “valued customer” (Welch, 2005).

Southwest Airlines should have their SVP of Customer Relations to make sure that every negative complaint receives a response and to explain the reason why this procedure was implemented, they should also reiterate the company’s customer commitment and assure them that they are very important. Southwest can also offer some of these customer free boarding passes just to show their appreciation for being a customer of Southwest Airlines (Welch, 2005).