South West Airlines Essay Example

in 15 states Southwest dominated the markets quickly with a low fares and no frills approach. Many competitors abandoned the routes covered by south west because they could not keep up with the low fares (Shah, Sterett and Anderson; 2004, p 25)According to Shah, Sterett and Anderson currently the largest domestic carrier in terms of customer boarded. According to their research, the airline has transformed itself from a regional carrier operating out of dollars into a national carrier.

Critical Strategic Events

The airline has always has a social responsibility. Southwest argue that their employees customers and neighbors make a family.  Southwest airlines and its employees reach out to individuals families and entire communities providing help where its needed. According to the airline most donations are invisible except to the people they affect. To the airline, recognition I is highly valued (www.iflyswa.com )Lori Rainwater, the south west airline internal auditor vice-president led the employees into contributing to social welfare and responsibility to the community by participating in the Trinity River clean up I dollars on September 15, 2006. Many employees volunteered their time in the clean up project.  The internal audit department further participates in annual golf tournament.The airline has been involved in encouraging the orphans whose parents have died in the line of service an American solders.

The airline show love to the unfortunate families and this contribute greatly to their social responsibility. The contribution of airline to the society fulfills their mission being dedication to the highest quality of customer service delivered with a sense of warmth friendliness, individual pride and company spirit.Southwest airlines is involved in selling the shares to shareholders who are proud to be

associated with it due to leadership in the air travel industry 1.3 CompetitorsThe terrorism attack in U.S.A on September 11 2001, shifted competition for southwest airlines from medium airlines to low fare airlines. This was attributed to by the income losses in 2002. Before September 11, 2001, United the second largest airline and major competitor of southwest airlines laid off 25,000 of its workers after the terrorist attack and later went into bankruptcy in December 2002, (Shah Sterrett an Anderson, 2004, Pg 32)Following the terrorist attack, Delta the third largest US carrier, laid off 21% of its workers delta which was a direct competitor with Southwest airlines due to using the same routes would not cope with the low fare carrier delta replaced low fare by forming an alliance Continental and North West airlines.America west, the third competitor is doing better that united and delta.

In July 2002, according to Shah, Sterrett and Anderson research, they recalled virtually all employees. The low fare carriers are doing better because they do not offer the frills the major carriers offer the low fare gravitate secondary airports where less congestion and lower fees keep cost down. South west employ market strategy which promote individual.  Hence the customers are intrigued and convinced that its an easy way to travel (Shah, Starrett and Anderson; 2004 p,32)  LeadershipLamar Muse is attributed to south west profitability history and Muse strong foundation ousted in leadership in 1978 upon which Kelleher became the C.E.O (chief executive officer) Kelleher is succeeded by James Parker who is the vice president. Mr. Parker was been the airline top labor negotiator which has enhanced his relationship with employees of south wet

airlines. According to Kelleher, Parker forms and important subject in the decision making process. Ms Barrett is credited for the crusading to Southwest culture which she has successfully indoctrinated to thousands new workers.

Parker as the current CEO plan to maintain Southwest blueprint that is low cost low fare and no fills airline (Shah, Sterrett and Anderson 2004, pg 25)Shah, Sterrett and Anderson, the Southwest management team drives home the feeling that all of its people are part of one big family. Barrett who is responsible in maintaining the air lines culture regularly visits the company’s stations to motivate the employees. Barrett commemorates all employee birth days and special events with signed card as a show of appreciation of their work and as continuation of culture.  Every employee understands the company’s culture. Under Barrett, there are four other important groups to the success of the company.

These are Finance department, Customer service department, and Operation and Marketing departments.The finance executive oversees all the finances in the company, regulates purchases makes reservations and oversees revenue management. Customer service department coordinates all product advertisement and promotion oversees government affairs people and also deal with over all marketing. The operation department headed by chief executive, oversee flight operations fuel management, ground operation in flight services maintenance and schedule planningThe strategic analysis of the firmThe Southwest airline has many external opportunities available that it can take advantage to so as to make profit.

The available opportunities include that individuals prefer airlines which promote individualism. Low fare business strategy that is employed by Southwest airlines is more intriguing to company. The involvement of southwest airlines in the community service show their concern for

their customers and this encourage individual use the airlinesThere are many threats that face southwest airlines like any other airline. The most important and which has led to bankruptcy of many airlines is the threat of terrorism whose measures which are very costly. Profitability of Southwest airline also depend on the political stability of U.S.

A With political instability, individuals will fear using flight services. Government policies which do not favor the airline industry like heavy taxes will lower the profit margins made by the airline.The airline is attributed to its strength as the leading airline in U.S.A. The southwest gives groups programs where less more than 10 people.

People use the same airline from same family or organization at the same time are given discount (www.iflyswa.com )The Southwest according to the research done by Shah, Sterrett and Anderson is credited for its readily available freights per day. The Southwest offers online tickets service which make easy for emergency trips for individuals. The southwest airlines are comfortable, less costly and efficient and hence used by most individuals who appreciate that service. Most airlines after September 11, 2001, went into bankruptcy nonetheless southwest airlines continue to operate profitable and efficiently.

However, the southwest like many other airlines was affected by the September 11, 2001 terrorist attack due to less effective anti – terrorism measures. The southwest has not contributed much too social responsibility as the community would except it due to financial constraintsSouth west financial position had gone down after September 11, 2001 as reported by the decline in the net income after tax in 2002. The financial position has since then picked up. The rise in the financial

position can be attributed greatly by the low fare business strategy and other strategies that promote individualism which in turn increase revenue for the company and hence profits (Shah, Sterrett and Anderson, 2004 pg31) Southwest objectivesThe Southwest airline like many companies has laid down several objectives which it aims be achieve. The most important objective as a profit making company is to be profitable. The airlines aim at operating at low cost with high profit marginsThe airline aims to remain as the leading airline nationwide with the best desirable products to its consumers.

South west aims of anti terrorism measure so as to gain thrust from its customers.The southwest airline aims to remain the most cost friendly airline in America which is used by most people in U.S.A. This it does through business strategies that promote individualism.

The airline as Barrett has done, aims to uphold its culture of making their customers an employees a priority. The company, through its culture CEO treat employees with specially and dignity (www. iflyswa.com )StrategiesThe southwest airline like most companies has laid down objectives to reach the target of their profits. Most of their business strategies have been analyzed in the book ‘Southwest Airlines   2004’ by Shah, Sterrett and Anderson. The airline has put strategies to avoid laying off workers during lean times.

This has been laid off twenty years upon which they were later recalled.According to Parker during his interview with Shah, the Southwest major goal has been keeping low costs and high quality. The low cost flights that get passengers to their passengers often closer to their destination and hence preferred to many major airlines. Moreover, the airlines are less

congested to a business traveler (Shah, Sterrett and Anderson 2004, Pg 31)The southwest marketing approach according to Shah, Starrrett and Anderson is unique.

The airline plays up its fun loving rebel reputation. The airline has employed many business strategies to market its flight services for example low fare and whisky for every traveler at $26 full – fare ticket. This led to their planes being full in a short time.The Southwest adverts always convince the customer that what the airline offer is real value to them. It also believes that flying is much fun.

Southwest promises safe, reliable frequent low cost air transportation that is tipped off with outstanding service. By keeping its promise, southwest has earned extremely high credibility in very market it serves (Shah, Sterrett and Anderson; 2004, Pg32).Southwest airlines has been aggressively been marketing its products through the web according to the report in 2003, 50% of the passenger revenue is generated through online booking. According to interest week in March 2002, southwest experience an internet traffic gain of 16%. According to Southwest airline, online booking is far mush cheaper as it costs $1 cost per booking in comparison $10 via travel agent.

Most Americans have embraced the faster, cheep and most convenient means of airline booking as offered by south west airlineSouthwest airline has several competitors who present possible threat to the business. The competitors include United, Delta, Continental Northwest America west and JetBlue airlinesMost of the airlines have given up competition since the September 11, 2001 united airline have run into bankruptcy. The United airline which after which terrorist largest attack in US employed the strategy of laying off 15, 000 workers so

as to remain profitable but in 2002 it became bankrupt despite the measures. The direct competition with Southwest airlines has diminished since then (Shah, Sterrett and Anderson; 2004, Pg32).

Delta which is the third largest airline in US after September 11, 2001 has come up with new business strategy to be able to compete with southwest airline through alliance with continental and Northwest and airlines. America west is the third competitor in southwest airline. America west is dong better than Delta and united. In July 2002, it recalled all employees that had been off after 2001 September11 attack. America west has formed employed strategy of forming alliances with Continental and Mesa airlines which give it more destinations so as to compete well with Southwest airlines (Shah, Sterrett and Anderson, 2004, Pg 32).JetBlue airline is the Southwest newest and possibly most noteworthy competitor according to Shah, Sterrett and Anderson.

JetBlue was the only airline that reported profits of $55million in 2002.Jet blue which is the current major competitor of Southwest airlines employs low cost air lines business strategy. It also markets its products on the web and provides online booking services. The online booking services like southwest are cheaper and hence are taken up by most passengers (www.jetblue.com ).Policy and RecommendationsThe main objective of the company as put forward by Parker is to maximize profits subjects the given financial constraints. The objective can be achieved through many ways.

As a researcher and customer I would recommend that the airline to be international flights would receive a positive response from other state surrounding U.S.A.So as to increase revenue and hence the profits, the by management on internship porgrames and later

employed. This would encourage dissemination of new ideas.

The airline aims to remain the leading airline national wide. The objective can be achieved better if the leaders enquire on the services better sometimes substandard services are provided because of inadequate information about the competitors. Since southwest airline is operating in a perfectly competitive markets the finance department should employ or should assign duties to subgroups within the department to find out what other competitors are providing the group should further conduct a research of why the other airline is more preferred by their customers so as to amend their policies and improve on their strategiesSouthwest airline leaders seem to maintain on the same position for long. As a research, I would advise that they make a job other to a person that is employed in their competitor company so as to bring new ideas on how to expand their business and how best to market their products. The airline too should employ your people who have new ideas so as to bring progress to the company.

The Southwest airline another goal is to provide security to its customers. This can be done through proper anti- terrorism measures being laid down. As a researcher and customer, I would recommend that the airline work together with the government is liable to give security to its citizens. The government, from the tax revenue can then put the anti corruption measures. The airline can assist the government through larger contribution of tax revenue to the government. Police who are found to facilitate criminal cases and provide a conductive environment should be sacked immediately.

For example, police who allow passengers with drug to

pass through and are noted should be immediately fired because they can easily collide with terrorists and this will compromise the safety of passengers. There should be fire too or jail sentence to make others comply. Southwest aim to remain the cost friendly airline in America. The airline should enquire about what other airline should do to cut down fare cost through research.The southwest airlines aim to contribute to the society through social work and responsibility.

The airline should identify with the poor too through slum cleanup activities. This would be appreciated by many Americans and this woiuld further create a positive image of the airline and hence profits in the long run. The south west airlines should provide more scholarships to further studies especially to residents from humble backgrounds so as to enhance equitable distribution of resources. The residents, who are provided with scholarship centers paribus, will move up the ladder and hence with good employment opportunity will be able to educate their families.

Moreover the residents will afford air ticket around USA and this will increase revenue further and hence profitsTo maintain the culture, Ms Barrett tries by sending cards to employees to motivate. Its not a bad idea. But, I would  recommend her to enquire from her employees what is either way they would appreciate to be motivated with I would recommend for the company to organize cocktails where the employees take their families to enjoy with them . After two of five years.

This would make even the outside community to admire the company and wish to be associated with and hence buy their productsThough I have given many recommendations to be employed as

business strategies there are possible constraints to the achievement to the goods. The south west airlines objectives to be achieved through the given recommendation can be opposed by the leaders who may not be wiling to accept change as most of us do.The leaders should be trained on how to appreciate young people ideas. Positive attitude would overcome the problem of those who are rigid to appreciate social changeThe erection of aviation schools could impose great financial cost on the company and would be hard to implement. The company can therefore plead with the government to sponsor contribute some revenue to their erection. The company can also become cheaper.

Research that is done by the finance department on the marketing information in other airlines can be costly. The other airlines may not be willing to close their business strategies to their rival competitors would mean they offer a better salary package and this would involve extra cost on the company. Therefore test on the candidate should be done during interview process to ensure that the right person with needed knowledge and ideas is chosen so as to add value to the companyThe scholarship programme by the southwest airlines and clean up of slum would further incur costs on the company. Given the long term positive implication of the programme, the south west airline should be more than willing to support the residents from humble backgrounds. The company can also encourage well wisher to join in the programme through donations which would further support the programme.The company’s officials can appeal to the parliamentary aspirants to support the scholarship programme as a concern to the residents from humble

backgrounds most of them, due to public opinion would support the program so as gain popularity and in hence generate revenue.

As a researcher reporting to that board of directors in the south west airlines, I would advice the board of directors to always go to the ground where the employees are doing their job to oversee what they are doing, discuss with them and problems that are facing them and what the employees think should be done. All the members in the board despite the rank should do it. Supervision motivates the employees and make them to be consistent with their work supervision would also enhance perfection. The problems then observed and said by the employees should be handled opportunity through discussion in the board meetings according to critically of the problem.

The solutions should then be agreed upon. The board should device ways to avoid possible occurrence of the given problems and hence ensure he success of the airline.The board should always ensure that southern airlines remain the leading airline through providing wet page of where their employees post their complaints the web page should be confident. The board should put measures in place to avoid victimitization of individuals who forward complaints to the top officials.The board should be positive about the public criticism about the airline. This is the only airline can provide better services.

Criticism if taken positively helps to make a better person who is more knowledgeable and with the best ideologiesNevertheless, southern airline remain to the leading low fare airline in USA which provide the best products at affordable pricesThe efficiency in the marketing of the company’s product is attributed to the

good governance and good coordination of the many departments within the company. The top officials deserve a vote of thanks for making Southwest airlines the best airline that it is.