Southwest Airlines: A Case Study

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Southwest Airline Background Southwest Airlines is the largest low-cost, commuter airline measured by number of passengers carried each year within the United States. Southwest Airlines is known as a “discount airline” compared with its large rivals. In late 1966, Rollin King, a San Antonio entrepreneur who owned a small commuter air service, came to see Herb Kelleher at the latter’s law office with a plan to start a low-cost, low-fare airline that would shuttle passengers between San-Antonio, Dallas, and Houston. The thought to begin this partnership between Rollin King and Herb Kelleher was founded as a business need to shuttle business people desiring a shorter commute between the three cities than driving across Texas. Southwest Airlines …show more content…
Southwest Airlines is the “fourth-biggest US carrier in the terms of passenger traffic; with more than 50,000 employees to move more than 100 million customers annually, with more than 3,900 flights a day, serving 98 destinations across the United States and seven additional countries (Southwest Airlines, 2016). Southwest Airlines reported in 2015 a record net profit of $2.2 billion in 2015 on the back of $19.8 billion in operating revenue” (Ghim-Lay, 2016). Southwest CEO Gary Kelly strives to balance three important areas of focus for the company: low cost, customer service and a focus on people (Mueler, 2009), this method has become the basis for the company’s policies, procedures, operating practices and core …show more content…
The employees are cornerstones “of Southwest’s employee-relations approach, representing concern and respect for the individual as well as the conscious creation of an environment that encourages all employees to have fun on the job…Southwest’s low employee turnover rate and high productivity suggest that the airline creates significant value for employees” (Hallowell, 1996).
Southwest Airlines Culture
Southwest’s public relations and advertising use their own employees and families to show the LUV to be the face and heart of advertisements. Using the face of their people for public relations has kept advertising costs to a minimum. Another interesting fact is Southwest has been in operation for 45 years. Of those 45 years, the company has shown consistent profits and growth for 43 years, there have only been four CEOs, with 20 of those years being one individual, Herb Kelleher. (See Figure 9.3, pg.C-341, Thompson, et al.,

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