Southwest Airlines' Success

Southwest Airlines has been in business for more than thirty years. Presently, operating airplanes and flight services is very competitive, and in most cases, is not cost-effective industry; however, Southwest Airlines has been consistently profitable company, which is successfully designed with the intention of achieving high growth. According to an interview of Southwest Airlines former CEO, Herb Kelleher, when he visited Graduate School of Business at Stanford University, despite all airline industry challenges, the “low-fare airline has grown into the third largest in the world as measured by the number of passengers carried, and the largest with destinations exclusively in the United States” (2006). To the customers, Southwest Airlines is known by the low-fare service, short distance routes and high frequencies flights.

To achieve growth objectives, the company developed a great customer service, lowered operating costs, and provided efficient training to the employees. With the very low turnover rate, 4.5 percent, the company has been able to hire and retain their highly skilled and professional employees. Southwest Airlines philosophy incorporates the critical elements to success – “hire the right people and invest in their development” (Bryant, 2007). Southwest has changed the view on airlines industry; it is the most unique and rewarding employer that believes “in developing and promoting people, building great teams, thinking strategically, and achieving excellent results” (Bryant, 2007). The company calls it the “leadership expectations” (Bryant, 2007). The company tradition is to respect and sustain the supportive work enviroment in which employees can pursue their career and development. In Southwest, employees ar...

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... been based on the shorter flights in term of distance and durations. Nearly all Southwest flights are offered in segments such as one-way and non-stop. Despite offering more travel distanation flexibility through “hub-and-spoke” system, the point-to-point system meets customer needs in more direct and short flights. Out of all airlines, only Southwest was awarded the airline industry’s “Triple Crown” for having less delays, minimum compaints, and the fewest cases of lost laggage. From the marketing point of view, the Southwest has been influencing the market prices. If Southwest establishes a new route, other airlines have no choice, but lower their ticket prices and increase flights frequency for the same route. “Like Toyota in the 1980s, Southwest has demonstrated its ability to outperform the rest of the industry and can no longer be ignored”, (Gittell, 2005).