Section 2 Group 14 HRM Southwest

8/11/2019 Section 2 Group 14 HRM Southwest

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CASE STUDY

SECTION 2 : Group 14

Members:

ANANDH M - FT152020

R VIGNESH - FT152046

NARAYANAN K S - FT152066

ADITI - FT152047

LOKESH CHANDNA - FT152087

MANZOOR A - FT152099



Southwest Airlines History

• Founded in Texas in 1971 as a small regional airline

• Mission – “Dedication to the highest quality of

Customer Service delivered with a sense of warmth,friendliness, individual price, and Company Spirit.”

• 31 consecutive profitable years and consistently highquality ratings

– Fewest customer complaints for the 13th straight year in2003

– Multiple Triple Crown winner in U.S. DOT rankings

• Today Southwest is the largest airline in the UnitedStates



Industry Profile

• Southwest competes in the domestic airlinemarket

• Legacy carriers – United, Delta, US Airways,

Continental• Low Cost Carriers – Southwest, JetBlue, AirTran

Airways, Frontier Airlines

• Hub and spoke vs. spider web

• Difficult financial time for the industry

– Rising fuel costs, economic downturn, post 911 fallout



Corporate Culture

• Herb Kelleher – longtimeCEO credited withcreating the familyfriendly atmosphere thathas led to high employee

morale• Unconventional CEO

– Quarterly he wouldperform employee taskssuch as load bags, serve

drinks, and had outboarding passes

– Settles disputes “the oldfashioned way“

• Southwest spends themost money on employeetraining in the industry – Employees are

encouraged to think

outside the box andinteract with customers

• LUV program

• High morale andcamaraderie

• Low employee turnoverand good relationshipwith labor unions



Operational Efficiency

• No frills airline withfew amenities – No baggage transfers,

first class seating,

assigned seats or mealservice

• Short haul, point-to-point strategy – Spider-web system

• Many time options,including hourly flightsin some cases

• Advantages of Spider websystem

• Southwest uses Boeing 737sfor all of its flights

– Keeps maintenance costs

low and allows for quickturnaround

– 10 minute turnaround

• Planes are in the air for 12hours per day vs. industryaverage of 8 hours

– Major accomplishmentconsidering that Southwestoperates short flights

http://www.youtube.com/watch?v=gnFfFRDMd_0&feature=player_embedded








Marketing Approach

• Recently named the most desired brand inAmerica among by men and women

• Consistently offer among the lowest fares in theindustry – No baggage fees, no assigned seats

• Fun image – Employees dress up for holidays

–

Employees are features in commercials – Themed planes

• Unique promotions



What does it take to make money in

this business/industry?

• Keep the costs low

• Treat Employees well

•

Commitment to managing the companyduring booms with an eye to the busts that

will inevitably follow



What is Southwest's strategy?

• 737s aircraft the onlytype it operates,therefore it simplifiesthe job by saving on

maintenance andtraining costs.

• Simple frequent flyersystem.

• Low fares.

• Low costs.

• Frequent flights.

• No meal service.

• No assigned seating.



Why has Southwest been so successful

this long?

• Have kept a low cost policy & eliminated the

unnecessary costs

• Culture – Warm, informal, distinct lack of

hierarchy.

• People really are the most valuable assets.

•

Benchmark to low cost airline industry.



Increased Competition

• More low-far, low-cost carrier competition

• Legacy carriers are offering “Southwest-style

no-frills, low-far service”

• JetBlue, AirTran Airways, Frontier Airlines, etc.

• New competitors offered more amenities

–

Luxurious leather seats, DirecTV in flight, assignedseats, fancy drinks, carb conscious meals, etc.



What questions should Ann be raising

in the meeting?

• How can Southwest reclaim its numero uno

position as the number one low cost carrier in

the country.

• How to still maintain low fares despite rise in

fuel and other costs.

• How to resolve issues between

employees(labor unions) and management.



Areas with Potential for Improvements

• Operating Costs

• Workforce Productivity

•

Business Expansion• Customer Satisfaction

Section 2 Group 14 HRM Southwest

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