Southwest Airlines Case Study Essay Sample

1. To what make you impute the success of Southwest Airlines? 2. How important is the 10 to 15 proceedingss turnaround clip of Southwest’s aircraft in footings of nest eggs in investing and use of its aircraft compared to rivals? 3. What challenges is Southwest facing in the hereafter and how should they run into those challenges? 4. What should their concern and operations scheme be for the hereafter? 5. Has Gary Kelly. the new Southwest CEO since 2004. been able to keep the profitableness of Southwest Airlines while sing the continuance of their alone civilization?

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Analysis

Question 1. To what make you impute the success of Southwest Airlines?

The cardinal points related to the company’s success can be summarized as follows:

•Fleet: all Boeing 737s which means better fuel efficiency and low care •Scheduling: speedy bends that consequences in high plus use •Service: short draw. point-to-point. low cost. no-frills flights from secondary airdromes in good-weather countries •Integration: contract out non-core activities like major care. informations processing. and legal services which will diminish costs •New markets: enter in full force

•Positioning: low cost to travellers. yet dependable and merriment largely aimed at concern travellers •Pricing: driven by break-even capacity ; compete with other manners of transit ; two tiered •Promotion: unusual and originative. aiming concern commuters •Personnel: selective in engaging ; cross-trained ; shared wagess through above-average wage and part-ownership •Culture: a contemplation of Kelleher—lighthearted. fun-loving. bizarre yet serious about teamwork and productiveness

Question 2. How important is the 10 to 15 proceedingss turnaround clip of Southwest’s aircraft in footings of nest eggs in investing and use of its aircraft compared to rivals?

The turnaround clip is really important in use of aircraft and the low cost place of Southwest air hoses. In the early old ages. because of the 10-minute turnaround clip. Southwest was able to offer hourly service between Dallas and Houston and to get down flights every two hours between Dallas and San Antonio.

If the turnaround clip is 30 proceedingss between flights which is the norm of conventional air hoses. it would take 120 +60 =180 proceedingss for a roundtrip leting merely 4 and a half roundtrips in a 14 hr twenty-four hours. The nest eggs in aircraft investing costs is enormous when sing how many extra aircraft are needed to wing the same agenda. utilizing a 30-minute turnaround clip verses a 10-minute turnaround clip particularly on short-haul paths. The nest eggs in turnaround clip means the short turnaround fleet can be about 140/180 = 77. 7 % of the figure of aircraft of the longer turnaround fleet presuming one-hour flights.

Question 3: What challenges is Southwest facing in the hereafter and how should they run into those challenges?

The challenges being faced by Southwest Airlines are as follows:

1. Security challenges after the September 11th onslaught. This includes altering the policy on get oning base on ballss and check-in processs.

2. The coming of inauspicious labour dealingss or strained labour dealingss. While the recent labour contracts have been settled. well higher wage and high costs resulted. This could besides take to future brotherhood agitation in the hereafter.

3. Employee turnover in senior direction. James Parker. Southwest’s CEO had merely announced his surrender. Future turnover is besides likely to happen as senior direction ages. The inquiry is can the civilization of Southwest Airlines be maintained in the face of these turnovers?

4. The new coevals of low-fare. low-priced bearers including Jet Blue. By 2004 the low-fare air hoses made up 18 % of the market and were expected to do up 50 % of the market by 2010.

Question 4. What should their concern and operations scheme be for the hereafter?

I believe that the overall competitory scheme of a company is more than the amount of its functional schemes. There are. nevertheless. both good and bad associated with that characteristic. On the one manus. such a connexion makes it hard for others to copy a company’s successful actions and. hence. can give a company a sustainable advantage. On the other manus. those same links can do it hard for the company to switch its competitory position in response to the changing or changed worlds underlying economic activity.

Question 5. Has Gary Kelly. the new Southwest CEO since 2004. been able to keep the profitableness of Southwest Airlines while sing the continuance of their alone civilization?

An embedded corporate civilization is highly hard to alter. even if direction attempts to alter it. If Gary Kelly strives to keep the civilization of Southwest Airlines the civilization will in all likelihood persist. However. the consequence on civilization of Herb Kelleher’s personality and alone attack should non be underestimated and must be preserved in some signifier. In other words. the merriment and originative portion of the client experience should non be sacrificed.

Profitableness may be more hard to keep. since cost eroding has occurred due to higher labour cost and the add-on of longer paths and longer turn-around times due to luggage and passenger connexions. The new security ordinances adopted after 9-11 may besides decelerate down the embarkation procedure and subsequent turn-around of the aircraft

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