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Southwest Airlines Faces Growth Decision
- 1. Southwest Airlines: In a Different World Presented by: GROUP 6 Abhijeet Kumar 13PGP001 Kaiwalya Misra 13PGP025 Ruchita Burde 13PGP106 Arthur de Saint Jean 14Sep001
- 2. Case facts • SWA was founded in 1967, but operations were delayed for nearly years. • In April 2008 ATA Airlines Inc. ceased its operations due to which 16 LaGuardia time slots became available • SWA is in dilemma whether or not to bid for those slots. • Those arguing for the acquisition pointed out need for continued growth • But operations manager were concerned about possible delays caused by difficulties getting into and out of LaGuardia.
- 3. Q1. Why has Southwest been so much more successful than its competitors?
- 4. Factors contributing to success • Frequent departures • Strategic selection of Airports • Cutting down the cost by providing no in-flight service • Organization culture was very good which resulted in very less attrition rate • High utilization of aircraft because of 30 min turnaround time • Operation is well aligned with organization’s objective
- 5. Q2. How has the original strategy been altered in recent years? How, if at all, have these changes affected Southwest's key success factors?
- 6. Changing customer experience SWA altered its original strategy as an effort to change customer experiences: • Development of long distance service • Code-sharing agreements • Changes in boarding process • Fuel hedging • Services in new U.S. market • Services like: Onboard internet, cashless cabin, bags fly free
- 7. Impact on success factors • Since Southwest is extending its service to new market, it may be difficult to maintain standard boarding procedure. It may lead to increase in turnaround time(i.e. more than 30 minutes) • Also SWA has to hire new employees. If people with wrong attitude are hired, then it may be destructive for SWA culture • If new boarding process proves to be effective, then it may result in cost reduction
- 8. Q3. What kinds of things over which Southwest's leadership has some control could go wrong? what should be done to make sure they don't happen?
- 9. Things that could go wrong • SWA is able to achieve turnaround time of 30 min only because of its trained staff. If SWA goes for expansion then it would need more trained staff. If it hires staff with wrong attitude then it could lose its competitive advantage • It provides no in-flight services such as free meals, etc in order to cut down the cost. But in long distance flights, if meal is not served then it might damage SWA’s image.
- 10. What can be done? • Try to retain its existing staff. Also give more emphasis on hiring process so that right people are hired. • Provide in-flight services for long distance flight
- 11. Q4. Based on your response to questions 3, what further changes, if any, need to be made by Southwest's leadership in the face of competitive moves and general economic conditions?
- 12. Changes recommended • SWA should seek for growth opportunities else other competitors will take over the market. • Code-sharing agreements with other airlines. • Look for new routes where there is a demand.
- 13. Q5. Would you recommend that Southwest Airlines acquire the gates and slots available at LaGuardia? Why?
- 14. SWA should acquire gates and slots available at LaGuardia • It takes only 8 flights to cover daily cost and ROI is 25.4%. • In the long run, Islip cannot be considered as an option for serving New York customers • It would serve New York market which is very huge and has high potential growth • Operation at LaGuardia can be isolated to make sure that problem of delay does not flow through the network
- 15. Thank you