Every business magazine and business student knows something about
Southwest Airlines (SWA). My favorite business leader, Herb Kelleher,
who was so significant in making SWA the admired company it is today
has retired as Chairman of the Board. I have held off talking about
this wonderful company because I was certain that I would only be
redundant. I choose to add my two-cents today because airline customers
are recently being charged extra by other airlines for things like, baggage of all things! Why are airlines like American
resorting to these tactics? Just look at the price signs on the local
gasoline stations. The same rising costs have created a crisis at
airliner fuel stations. Most airlines have not prepared for these huge
rises in jet fuel and are now making their customers pay the price for
their inept management. Why hasn’t SWA followed suit?
Kelleher’s direction, SWA began storing fuel as far back as their
beginning years to meet just such a fuel crunch as being experienced
today. What began as a small Texas airline, Southwest has grown to
become one of the largest airlines in the U.S. Today, Southwest
Airlines flies over 104 million passengers a year to 64 cities all
across the country, and they do it more than 3,400 times a day. What
makes SWA unique?
More than 36 years ago, Rollin King and Herb
Kelleher got together and decided to start a different kind of airline.
They began with one simple 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. And you know what? They were right.
For those of you who are not all that familiar with the SWA roots, here is a short synopsis:
in 1971, Southwest Airlines began to establish a consistent pattern of
deviating from convention. In 1978 the airline industry was deregulated
and 120 plus airlines have gone bankrupt since. Why, in this difficult
environment, has SWA continued to grow and thrive? Notably, SWA is the
only airline to continuously show a profit every year since 1973. How
has SWA managed to increase its traffic by as much as 139%? Here are
some facts that might help to understand how SWA has achieved this
* The company consistently leads the industry
in low fares and dominates the short haul market with an average of 60%
* The company serves over 2400 customers per employee
annually – making SWA employees by far the most productive workforce in
the airline industry.
* Employee turnover averages 6.4% – again one of the best records in the industry.
* SWA is consistently ranked in the top 100 of the best U.S. companies to work for.
* They have never been forced to lay off employees regardless of external market factors such as recession or high fuel prices.
*They have the best record for baggage handling in the industry.
* They have the best on-time performance record.
* Fewest customer complaints.
* Youngest fleet of airplanes, and the best safety record!
the above does not convince you that SWA is doing something unique,
consider they can turn around an airplane at the gate in 15 minutes.
Thats a full 10 minutes faster than their nearest competitor. This
allows them to operate with 35 fewer aircraft.
The SWA culture
is as unique as its business strategy. The differences begin in the
hiring process – they believe in “hiring for attitude and training for
skills”. You must have a sense of humor to work at SWA, and they insist
on having “fun” at work. More importantly, all employees are told to be
themselves and treat other employees as “best friends” (Great internal
customer service!). Finally, employees are told to establish their own
standard of professionalism. They are encouraged to think
entrepreneurially and act quickly even if it means disregarding the
company bureaucracy. Southwest empowers their employees and expects
positive results by eliminating inflexible rules.
Kelleher has retired, the high standards and positive attitude he
instilled while Chairman and father-figure to all SWA employees carries
on. Many airlines have tried to copy Southwest’s business model, and
the culture of Southwest is admired and emulated by corporations and
organizations in all walks of life. Always the innovator, Southwest
pioneered Senior Fares, a same-day air freight delivery service, and
Ticketless Travel. Southwest led the way with the first airline web
page:southwest.com; DING! the first-ever direct link to customer’s computer desktops that delivers live updates on the hottest deals.
Let me leave you with this quote from the SWA Website:
you can see, we’ve been busy these past 36+ years. And we promise that
the future will be just as fun-filled and exciting as the last. We’ve
accomplished quite a bit, and along the way we’ve earned a title no
other airline in the industry can claim: the leading low-fare,
high-frequency, point-to-point carrier in America. We are proud of our
accomplishments, and it just goes to show that time really does fly
when you’re having fun!
Thanks Herb. I will
remain a loyal Southwest Airlines customer because of the great
customer service example you and your company pioneered.