Case Study: Sw Airlines Company Background Southwest

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SW Airlines

Company Background

Southwest Airlines is a U.S. based airline carrier and the world's largest low-cost carrier. It was formed in 1967 and, as of 2012, had almost 50,000 employees operating about 3,500 flights per day. The company grossed $17.1 B. In 2012 with its fleet of Boeing 737s, resulting in net income of $620M, or 36% (SW Airlines, 2013). The company is the world's largest operator of the Boeing 737s with over 550 currently in service. The company has an outstanding safety record, and is considered to be one of the 10 safest airlines globally (in Depth, 2012).

Historical Perspective

Southwest has the fewest complaints in the airline industry, the award for the most on-time flights, and best baggage handling. For these achievements, it won the industry's Triple Crown award for Best Airline five times in a row (Fortune 100 Best Companies, 2011. Even after the 9/11 crisis, SW had to cut flights by 20%, and while most other airlines cut staff, SW was willing to lose money to protect its people (Aboutsouthwest; southwest.com). The culture of the company was shown by SW's CEO Jim Parker, who noted, "Clearly we can't continue to do this indefinitely, but we are willing to suffer some damage, even to our stock price, to protect the jobs of our people" (Gitell,2003, p. 242). This resulted in the company maintaining a presence in the market, a great deal of positive publicity, employee loyalty, and a cultural commitment to using a difficult time to increase its presence in the market and show that it was committed to its employee culture.

Current Situation

Southwest's policy after 9/11 resulted in the company maintaining presence in the market, a great deal of positive publicity, employee loyalty, and a cultural commitment to using a difficult time to increase its presence in the market and show that it was committed to its employee culture. Not only did SW act innovatively with the "Take off -- not lay off" policy, they paved the way for other companies to consider at least three major alternatives to simply across the board layoffs: 1) How much will a layoff cost the company over the long-term? This is important -- will clients be dissatisfied, production or services halted? 2) Are there external perks or benefits that can be cut before people (office parties, bonuses, etc.)? Can the organization find ways to reduce costs without reducing people? 3) Are there alternative jobs current employees could perform? Are there ways that rotation, early retirement, cross-training, etc. could occur to make a more ethical plan? (What are Alternatives? 2012).

SW used its core values of human beings as an important part of its organization as the basis for its decision on a no layoff policy. Downsizing would have undermined this core strategy, and was not an option for management. Because of their commitment to long-range and creative, out of the box, thinking, the company was able to leverage job security to end up with a stronger, more committed workforce. In addition, employees felt empowered with a mandate that they could contribute cost-cutting ideas without fear of repercussion. These happy employees spread the word to others, clients, stakeholders, and even other potential employees; changing the culture of the organization forever.

SWOT

In the highly competitive airline industry, while not the largest company, the company that seems to glean the most press for providing innovative solutions and customer service is Southwest Airlines.

Strengths

Weaknesses

Opportunities

Threats

Strong fleet and firm operating stance as low-price leader

Limited routes, about 60 cities in the U.S.

International expansion

Intense and rapid competition

Friendly and professional staff

No product segementation (first class, coach, etc.).

Expand current flight distances and locations

Price fluctuations and dependence on foreign fuel

Four decades in the industry, market share and consumer trust

Limited cargo or freight space

Aquired Air Tran

Media issues that translate into stakeholder doubts

Economies of scale while still providing value and service

Heavy dependence on Boeing

Growth of U.S. traffic by 4% per annum through the decade; recovery of tourism

Regulations and barriers in marketplace

Central Issues for SW Airlines

Like many carriers, SW is plagued with issues surrounding fluctuating fuel prices based on foreign oil, a lull in the transportation market, and some recent negative publicity. SW cannot do much about the price of fuel or the… [END OF PREVIEW]

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Sw Airlines Company Background Southwest.  (2013, May 19).  Retrieved April 18, 2019, from https://www.essaytown.com/subjects/paper/sw-airlines-company-background-southwest/3855466

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"Sw Airlines Company Background Southwest."  Essaytown.com.  May 19, 2013.  Accessed April 18, 2019.
https://www.essaytown.com/subjects/paper/sw-airlines-company-background-southwest/3855466.