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Southwest Airlines Essay Research Paper Whileflying home

Southwest Airlines Essay, Research Paper


While


flying home to Texas last summer with Southwest Airlines, I had the most fun and


unique experience with an airline that I could ever remember. It all started out


quite oddly enough in the lobby just before takeoff. As I was checking in at the


ticket counter, the representative asked me if I wanted to play a game that


could get me free round trip tickets. "Sure, who wouldn’t," I


exclaimed. As she gave me my boarding pass she said, "Great, how many holes


do you have in your socks?" Initially caught off guard, I responded,


"Excuse me!" "The free tickets are being given to the customer


who has the most holes in their socks," she explained with a perky smile.


It was just my luck that I was wearing sandals. I told her, "Too bad your


not checking underwear, because I’m sure I could be in the running for some free


tickets with that sort of game." The remainder of the flight was filled


with jokes and gags yet quality service from the pilot to the flight attendants.


I can remember our flight attendant, dressed in a T-shirt, shorts and tennis


shoes along with the rest of the staff, enhanced the safety announcements with


the remark: "There may be fifty ways to leave your lover, but there are


only six ways to leave this aircraft." Having fun is obviously a big part


of Southwest Airlines formula to success. It all starts from the top with their


childish yet brilliant boss Herb Kelleher. Kelleher, the company’s CEO, is the


"nut" behind these shenanigans. This chain-smoking, Wild


Turkey-drinking Texas transplant from New Jersey has: ? Dressed for employee


celebrations as Roy Orbison, Elvis, a medieval knight and a teapot; ? Passed


out the peanuts himself on board his orange and brown 737s ? In front of


cheering employees, arm-wrestled another CEO for the right to use the slogan


"Plane Smart." (He got whipped, but he used the slogan anyway.) This


man, once called "The High Priest of Ha Ha" by Fortune Magazine firmly


believes: "If you feel real good about coming to work, if you feel real


good about what you’re doing, if you feel you are doing something for a


meaningful cause and you’re having fun while you’re doing it, then you look


forward to coming to work. You don’t succumb to stress as easily and you


cooperate with other people more quickly and more easily. If you have a sense of


humor . . . it tends to not allow you to make mountains out of molehills."


1 Kelleher, known as Herb to the troops and his partners, reinvented air travel


twenty-five years ago with its low fares and zany irreverent style. This paper


will give a historical overview of the company, discuss the ingredients to the


company success, offer some financial strengths and present a final conclusion.


Section I: Southwest’s History Twenty-seven years ago, Rollin King, a San


Antonio entrepreneur who owned a small commuter air service, and Kelleher, who


was a lawyer at the time, got together and decided to start a different kind of


airline. They began with one simple notion. If you get your passengers to their


destinations when they want to get there, on time, at the lowest possible fares,


and make certain they have a good time doing it, people will fly your airline.


And you know what? They were right. Within those 27 years, Southwest Airlines


became the fifth largest major airline in America. Today, they have flown over


50 million passengers a year to 54 cities all over the southwest and beyond.


They do it over 2,300 times a day with over 267 of the newest jets in the nation


and fly only one type aircraft; the B-737. The average age of their fleet is


only 8.4 years and they own over sixty percent of them. In May 1988, they were


the first airline to win the coveted U.S. Department of Transportation Triple


Crown for a month – Best On-time Record, Best Baggage Handling, and Fewest


Customer Complaints. Since then, they’ve won it thirty-one times, as well as


five annual Triple Crowns for 1992, 1993, 1994, 1995, and 1996. They have been


an airline whose has led to the advancement of the commercial airline industry.


They were the first airline with a frequent flyer program to give credit for the


number of trips taken and not the number of miles flown. They have pioneered


senior discounts, Fun Fares, Fun Packs, a same-day air freight delivery service,


ticketless travel, and many other unique programs. 2 Here is a brief year to


year synopsis about this little upstart three-jet airline and how it got off the


ground to become one of America’s largest and best-loved commercial airlines in


history: 1971 With President Lamar Muse ( retired and seasoned industry leader)


at the helm, Southwest Airlines takes off on its maiden voyage and begins


service between Dallas, Houston, and San Antonio. America’s most unique airline


is born. 1972 All Houston service is transferred to Houston’s Hobby Airport from


Houston Intercontinental. Said Kelleher, "Why should our customers have to


drive 45 minutes to take a 40-minute flight?" 1973 Southwest files with the


Texas Aeronautics Commission to extend service to the Rio Grande Valley. RUSH


Cargo service, which provides same-day airport cargo delivery, is introduced and


Southwest has its first profitable year. 1974 Southwest carries its


one-millionth passenger and spends $400,000 to renovate their terminal at


Houston’s Hobby Airport by adding two new boarding gates and departure lounges.


1975 Permission was finally granted for Southwest to fly to the Rio Grande


Valley via the Harlingen Airport with four roundtrips each business day. 1976


Southwest gets clearance to begin service to Austin, Corpus Christi, El Paso,


Lubbock, and Midland/Odessa. Within five short years, Southwest places its sixth


Boeing 737 into service while flying over one and a half million satisfied


customers to their destinations. 1977 Southwest carries its five millionth


passenger. Southwest stock is listed on the New York Stock Exchange as "LUV."


1978 The 1978 Airline Regulation Act gives Southwest the opportunity to really


take off with new service to St. Louis, Kansas City, and Detroit from Chicago’s


convenient Midway Airport. Lamar Muse steps down as President and Kelleher fills


in as interim President, CEO, and Chairman of the Board. Later in the year,


Howard Putnam is unanimously elected President and Chief Executive Officer.


Kelleher stays on as permanent Chairman of the Board. 1979 Begin service to New


Orleans from Dallas – the first city outside of Texas to be served by Southwest.


1980 Southwest added its 22nd Boeing 737 to the fleet and christened it the


"Rollin W. King" in honor of the co-founder of the airline. It was the


first 737 to be completely owned by Southwest Airlines. 1981 Southwest


celebrates a decade of "Love Southwest Style." With fun, games, and


more savings for everyone, Southwest launches its next decade of outstanding


service. 1982 Kelleher comes aboard as permanent President, CEO, and Chairman of


the Board for Southwest. New service to San Francisco, Los Angeles, San Diego,


Las Vegas, and Phoenix. 1983 Major schedule increases are adopted, three


additional Boeing 737- 200s are purchased, and Southwest flies over 9,500,000


satisfied Customers. 1984 Fourth consecutive year Southwest is ranked number one


in customer satisfaction. Unveils the first 300 series aircraft in its Boeing


737 fleet christened the "Spirit of Kitty Hawk." 1985 Southwest names


the Ronald McDonald House as its primary charity. Launched the "Just Say


When" campaign, which establishes Southwest as the most convenient


point-to-point carrier in the nation. 1986 Southwest celebrates 15 years of low


fares, good times, and high spirits! Southwest fliers have even more fun with


the introduction of Fun Fares. Over 13 million passengers. 1987 Southwest


celebrates the sixth year in a row as a recipient of the Best Consumer


Satisfaction record of any continental U.S. carrier. Weekend Fun Packs, which


include roundtrip airfare and hotel, are introduced, and 14-day advance purchase


Fun Fares are reduced by as much as 25%. 1988 Southwest and Sea World of Texas


join fins to promote Texas as a major tourist attraction. Through the "New


Friends" campaign, Southwest becomes Sea World of Texas’ official airline


and creates Shamu One, a Boeing 737 painted like Shamu the killer whale. Later


in the year, Southwest becomes the official airline of Sea World of California.


Southwest wins the first Triple Crown: Best On-Time Record, Best Baggage


Handling, and Fewest Customer Complaints. 1989 A little more than a year and a


half later, Southwest wins its second Triple Crown. Shamu Two is born. Service


begins from Oakland’s International Airport. 1990 Announces the billion-dollar


revenue mark and becomes a "Major" airline. Shamu Three comes to the


surface to fly its colors. Lone Star One takes to the sky as Southwest Airlines’


20th Anniversary flagship Boeing 737. 1991 Celebr

ates 20 years. 1992 Wins the


first annual Triple Crown in 1992 – a feat no other airline has been able to


match in a single month! 1993 Expand to the east coast and begins service to


Baltimore/Washington International Airport. Captures the second annual Triple


Crown in 1993. 1994 Introduces Ticketless Travel in four cities. Morris Air is


merged with Southwest. Arizona One joins the fleet. Seven new cities open,


including Seattle, Spokane, Portland, and Boise in the Pacific Northwest. Wins


the third consecutive Triple Crown. 1995 Ticketless Travel is available


systemwide in January. California One debuts in Sacramento. Adds service to


Omaha and wins the fourth consecutive Triple Crown in 1995. 1996 Florida service


is added – Tampa Bay and Ft. Lauderdale in January and Orlando in April.


Southwest celebrates 25 years of service. Ticketless Travel Online debuts on the


Southwest Airlines Home Gate webpage. In October, Southwest inaugurates service


from Providence, Rhode Island. Southwest wins the fifth annual Triple Crown for


1996. 1997 Starts out the year with service to their 50th city – Jacksonville,


Florida. Jackson, Mississippi becomes the 51st city added in August. In


December, Southwest accepts the delivery of its first Boeing 737-700. Southwest


is the launch customer for Boeing of the next generation Boeing 737-700. 1998


Begins new service to Manchester, New Hampshire on June 7. 1999 Begins new


service to Islip, New York on March 14. 3 As you can see, this airline has been


very busy the past 27 years. Southwest is a rare bird in American business, a


company that has cultivated an exceptional working atmosphere with amazing


success in its industry. Now let’s take a look at how Southwest succeeds in one


of the world’s most demanding airline industries. Section II: Culture Club


"There is a growing concern that companies cannot live by numbers


alone." So said Forbes Magazine to introduce the results of its 1995


Corporate Reputation Survey. "The one thing that the top ranking companies


in the survey have in common is culture. A company’s culture, like a person’s


character, drives reputation. It should come as no surprise that a company whose


culture honors customers, employees and shareholders alike have excellent


reputations." 4 Southwest’s culture is the glue that holds the airline


together. It encompasses beliefs, expectations, norms, rituals, communication


patterns, symbols, heroes and reward structure. Culture is not about magic


formulas and secret plans but rather a combination of trust and loyalty.


Kelleher believes that culture is one of the most precious commodities a company


owns so everyone from the CEO to the baggage handler must work harder at it than


anything else. Kelleher defined Southwest formula to success as to: ? Blaze new


trails. Don’t rest on the laurels of others. ? Ask yourself how can you do it


before you ask others how it’s been done. ? Become a "risk doctor:"


help others recover from mistakes by accepting, encouraging and laughing. ?


Stand behind your commitment and those of your people. ? Own mistakes, share


mistakes, learn from mistakes and move on. ? Play to win! 5 Southwest’s


commitment to culture has blended three important ingredients to make their


airline a thriving force: employees, customers and leadership. First of all, the


employees at Southwest have an uncompromising dedication to a cause or movement


that they deeply believe in. Secondly, Southwest has set the standard for low


fares for the customers. They have made it possible for people all over the


country to travel more conveniently and affordably. Finally, there is sound


leadership to ensure that the employee/customer relations merge to instill faith


and allegiance. 6 Southwest is obviously a collaborate effort. Kelleher has


surrounded himself with qualified and capable people who can run the airline


with or without him. Of course, they can survive without him however I’m sure it


would be quite difficult for them to live without him. He has set the benchmark


for all industry leaders to follow. Section III: Financial Success Southwest is


the team that everyone in the industry would want to play for. They have been a


genuine American success story. Let’s take a look at a few of their successful


economical accomplishments. First is their profitability. In an industry that is


still reeling from the $12.8 billion loss it posted between 1990 and 1994,


Southwest was the only airline to be profitable each year during that period.


During this time the airline industry lost more money than it made in the


previous sixty years. Southwest is the only U.S. airline to earn a profit every


year since 1973. Secondly, Southwest has have maintained a steady growth rate.


Since deregulation in 1978, 120 airlines have gone bankrupt. They company has


experienced 133% traffic growth over the past five years, ranging from 20 to 30


percent annually. Next is their outstanding stock performance. Investment guru


Peter Lynch lauds Southwest as "The only U.S. airline to have made money


every year since 1973." Up 300 percent since 1990, Southwest’s stock has


performed formidably. While airlines typically trade at typically at


approximately ten times their earnings, Southwest has generally traded at twenty


times earnings. Finally, Southwest continues to lead the industry with the


lowest fares, market dominance, most productive workforce, low employee


turnover, highest customer service rating and the youngest and safest fleet in


the world. 7 Kelleher calls his company "NUTS!" However nuts they may


be, they are living out one of the greatest success stories in the history of


commercial aviation and they’re having fun while doing it. Section IV:


Conclusion Since 1971, this eccentric and outlandish company has established a


consistent pattern of deviating from convention. When other airlines were


creating big hubs, Southwest was flying point to point. Instead of serving


expensive meals, flight attendants pass out nuts. Instead of wearing stuffy


uniforms, they sport polo shirts and shorts. For these departures from


convention, and many others, the world has become fascinated with these crazy


people whose unrestrained enthusiasm comes from the desire to make their lives


and their company extraordinary. Somehow, while the competition was trying to


figure out who these "goofs" were, they never noticed that these


"goofs" had already passed them up! The "Southwest"


Experience By Dennis Brooks Instructor: Mr. Verret Course: MAS 602 Date: May 10,


1999 Bibliography Baiada, R. Michael. "Southwest Airlines: Below the


Surface." Airline Pilot, July 1994: pp. 19-22. Chakravarty, Subrata.


"A Model of Superb Management: Hit’em Hardest with the Mostest."


Forbes, September 1991: pp. 48-51. Freiberg, Kevin. Nuts! Southwest Airlines


Crazy Recipe for Business and Personal Success; 1st ed.; Bard Press: Texas,


1996. Jacob, Rahul. "Corporate Reputations." Fortune, March 1995 pp.


72-76. Jarboe, Jan. "A Boy and His Airline." Texas Monthly, April


1989: pp. 98- 103. Jones, Del. "Low-Cost Carrier Still Challenging


Industry." USA Today, July 10, 1995. Notes 1. Chakravarty, Subrata. "A


Model of Superb Management: Hit’em Hardest with the Mostest." Forbes,


September 1991: pp. 48- 51. 2. Jarboe, Jan. "A Boy and His Airline."


Texas Monthly, April 1989: pp. 98-103. 3. Baiada, R. Michael. "Southwest


Airlines: Below the Surface." Airline Pilot, July 1994: pp. 19-22. 4.


Chakravarty, p. 49. 5. Freiberg, Kevin. Nuts! Southwest Airlines Crazy Recipe


for Business and Personal Success; 1st ed.; Bard Press: Texas, 1996. 6. Jacob,


Rahul. "Corporate Reputations." Fortune, March 1995 pp. 72- 76. 7.


Jones, Del. "Low-Cost Carrier Still Challenging Industry." USA Today,


July 10, 1995. Abstract: The "Southwest" Experience Purpose: This


paper will give a historical overview of Southwest Airlines, discuss the


ingredients to the company success, offer some financial strengths and present a


final conclusion. Introduction: First flight and my strange yet refreshing


experience aboard Southwest Airlines. Section I: A brief year to year synopsis


of the airline. Section II: A club and its culture. Section III: A momentary


look at a few of their economical accomplishments. Section IV: Conclusion


Baiada, R. Michael. "Southwest Airlines: Below the Surface."


Airline Pilot, July 1994: pp. 19-22. Chakravarty, Subrata. "A Model of


Superb Management: Hit’em Hardest with the Mostest." Forbes, September


1991: pp. 48-51. Freiberg, Kevin. Nuts! Southwest Airlines Crazy Recipe for


Business and Personal Success; 1st ed.; Bard Press: Texas, 1996. Jacob, Rahul.


"Corporate Reputations." Fortune, March 1995 pp. 72-76. Jarboe, Jan.


"A Boy and His Airline." Texas Monthly, April 1989: pp. 98- 103.


Jones, Del. "Low-Cost Carrier Still Challenging Industry." USA Today,


July 10, 1995.

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