Business Modeling case Southwest Airlines

3. ‘Our People Are Our Single Greatest Strength And Most
Enduring Long-Term Competitive Advantage.’
Gary Kelly, CEO Southwest Airlines

4. Started in 1971 with little money but lots of personality.

5. Featured a bright RED HEART as its first logo.

6. Advertising showcased its focus on Low-Fares, Frequent
flights, On-time arrivals, Top safety record and how Bags
fly free.

7. Used humour to poke itself to convey its warm
personality.

8. Personalized aircrafts such as a Flying Killer Whale, The
Texas flag and the Slam Dunk One.

9. United States’ MOST admired airline!
Profitable for 37 years straight!
One of Top 5 places to work!

10. BUSINESS MODEL

11. Southwest Airline streamlines operations which results in low fare
and customer satisfaction. The airline takes several steps to save
money and passes the savings to the customers through low
fares!

12. Flies over 3100 short “point-to-point” trips daily.

13. Each flight makes an average of 6.25 flights daily.

14. Avoids traditional hub-and-spoke system.

15. Purchases fuel in advance to hedge fuel prices.

16. with fuel hedging!!!
Southwest saved more than
$2 Billion

17. Extremely fast turnaround service.

18. Follows a unique boarding system.

19. Enters new markets other airlines overprice.

20. Operates Boeing 737s for all its flights.

21. Makes sure that the planes are light with lighter models
of seats and power washing the engine to remove the
dirt.

22. in fuel cost over just 3 months!!!
Southwest saved more than
$1.6 Billion

23. Advertisement by Southwest

24. Has pioneered services and
programs such as same
day freight service

25. Senior Discounts

26. Fun Fares & Ticketless Travel

27. • Southwest was the first airline with a web site.
• Ranks on top for customer service.
• Receives the lowest ratio of complaints per
passenger.

33. Southwest consistently earned profits despite
the various industrial problems.

34. With such stability, It makes decisions and
adjusts policies which other burdened
airlines may not be able to make.

35. • Other airline companies pride themselves more
on service.
• Their ticket prices are not cheap.
• They generate huge revenues from the elite
people.

37. Firstly, Southwest Airlines has to run their
flights even if only half of the seats are full.
In that case the airlines have a risk of earning
really low revenue!

38. Secondly, South West Airlines is at constant
price wars with its competitors.
Sometimes South West is forced to keep the
prices of tickets really low!

39. “Our fares can be matched; our airplanes and routes
can be copied. But we pride on customer service.”
-Sherry Phelps, Director of Corporate Employment

40. Let’s RECAP

41. Business Model Unique Model
Steps to Reduce Fares Future Prospects
Advertisements

42. DISCLAIMER
Created by Atulya Manuraj, IIT Kanpur during an
internship by Professor Sameer Mathur, IIM Lucknow.