- Southwest implemented unique approach: instead of “hub-and-spoke” used by other airlines, it applied short haul, medium haul, and point to point.
- It has the lowest operating cost structure in the domestic airline industry.
- In 2004, the company made $6.5 billion in operating revenue.
- 60% of passenger revenue comes from online booking.
- Southwest was able to hedge 85% of its needs of fuel and oil, which saves it about $455 million.
- It is known as the Nation’s low fare, and high customer satisfaction airline.
- In 2005, Fortune magazine named southwest the most admired airline in the world.
- It was the industry leader in customer satisfaction, customer service, and in the bounce promotions given to their employee.
- It employed more than 1000 married couples, and its employees are one of the highest paid in the industry.
- It implemented a hiring process that’s interviews the employee to find out top qualities and common strengths. Moreover, it is applied peers screen candidates and conduct interviews, where pilots hired a pilots, and gate agent hired gate agent…etc.
- It is consistently seeking ways to improve efficiencies and pass cost saving to passengers.
- In 1974, it implemented its first profit sharing plan, which was the first in the airline industry too. Now the employees own about 10% of the company’s stock.
QUESTIONS:
1-What is Southwest’s strategy? What is the basis on which Southwest builds its competitive advantage?
Southwest’s strategy is to improve efficiency and pass cost saving to its ...