Herbert Kelleher started Southwest Airlines in 1967 in Texas and served as CEO until 2007. Southwest pioneered the low-cost carrier model, offering low fares without frills like meals or assigned seating. It has grown to be the largest airline in the U.S. in terms of passengers carried annually. Southwest focuses on providing low-cost, high-frequency, point-to-point service on Boeing 737 aircraft between major cities within the U.S.
21. 15 minutes turn around time. Shorter routes. Do not charge for checking luggage/bags. Reservations without travel agents. Secondary airports.
22. Southwest Airlines provided a medium in which city-to-city transportation has become possible with the lowest costs. Especially to people who didn't bother about the additional services such as in-flight meals, luxurious seats or wanted to avoid busy airports.
23. Relationships with:- (i) Employees Employees’ upside down pyramid (organizational structure) Virtually knows every employees’ name First profit-sharing plan in the U.S airline industry, 1994 Compensation ,no contracts….Pilots paid for their service in air
24. (ii) Customers Customers are attracted to the low price Provides free snacks and soda First airline website Value for time (Direct Root) motto Notion: "If you get your passengers to their destinations when they want to get there, on time, at the lowest possible fares, and make darn sure they have a good time doing it, people will fly your airline."
25. Achievements Largest airline in the world by number of passengers carried per year (as of 2009) Maintains 3rd largest passenger fleet of aircraft amongst all the world’s commercial airlines. It has been ranked as number one in lowest number of customer complaints of all U.S airlines
26. Why NUTS? In-flight meals are never served, just 60 million bags of peanuts a year Planes are painted with killer whales Unconventional approach in the service (i) Toilet paper (ii) Play pranks (iii) The ambience is very lively and energetic
27. Competitors of South-west Few of their main competitors are Continental Airlines and American Airlines. Other competitors who have tried to copy the low cost model of south – west were on the verge of bankruptcy.
28. How American airlines differ from South -west Their fares are expensive. They have separate elite classes in flights. They charge customers for checking luggage's. They are less effective because they are basically torn between keeping elite members happy and filling economy seats.
29. How Continental airlines differ from South -west There is a very tight competition between the two. Both have been listed in FORTUNE’S ‘most desired companies’ Continental flies various airplane models unlike south west It does not operate on the point to point route like south-west .
30. Continental offers economy class as well as business class. They offer domestic as well as international destinations. Continentals history points out to several fatal accidents while Southwest has not had any passengers death on any of its plane in history.
31. Executive Summary Southwest Airlines provides low-fare air transportation service among 58 cities in the United States Here are some numbers that will give a brief idea how the company is operating: (i) Net income: $241 million (ii) Total passengers carried: 63 million (iii) Passenger load factor: 65.9 percent (iv) Total operating revenue: $5.5 billion
32. Executive Summary In 1999, they had total net sales of $4,735 million which had risen to $5,585 million. Their slight drop in 2002 to $5,521 million was due to the September 11th incident. There is a 13% insurance raise for the airlines and the government
33. 2009 Financial Statistics: Net income: $99 million Net income, excluding special items: $143 million Total passengers carried: 86 million Average passenger load factor: 76 percent Total operating revenue: $10.4 billion
34. Aircrafts Average age of fleet approximately 11 years. Average aircraft trip length. Southwest aircraft fly an average almost 10 hours per day. Southwest was the launch customer for the Boeing 737-700 in 1997 and Boeing 737-500 aircraft.
35. Fun Facts: Southwest received 90,043 resumes and hired 831 new Employees in 2009. In 2009 Southwest served 63.2 million cans of soda, juices, and water; 14.3 million alcoholic beverages; 14 million bags of pretzels; 90 million bags of peanuts; 17.7 million Select-A-Snacks; and 33.5 million other snacks. Southwest consumed approximately 1.4 billion gallons of jet fuel in 2009.
36. Fun Facts In 2009, Southwest moved 182 million pounds of cargo. Southwest has 1,164 married couples.
37. Southwest Airlines Distinctions: Southwest’s average passenger airfare is $131.82 one-way, and the average passenger trip length is about 883 miles. Southwest Airlines has consistently received the lowest ratio of complaints per passengers boarded of all Major U.S. carriers.
38. Drawbacks: Not able to compete against the bigger companies that serves internationally. Southwest Airlines does not utilize a hub system. Limitation of using only one type of airplane ie Boeing 737s They does not provide roomier seats.
39. Future plan of south west airlines Plans of merging Southwest Airlines and Acquire AirTran; Spreading Low Fares Farther Implementation of ding application on I pod to lower the operation cost and give customer the better deals. Introduction of Smart Payment Plan Partners With Southwest Airlines to Provide Bill Payment Services for Their Employees
40. CONLUSION Southwest Airline has developed a great low cost model for the past thirty year It has expanded from a tiny company with merely three aircrafts to one of today's major airliners After the incident of September 11, Southwest Airline is one of the few airliners that remained profitable
41. SUGGESTION Southwest airline should take an opportunity to expand to greater regions It should give up some of the profit to cut the ticket price even lower and upgrade its hardware.