Case Study: Southwest Airline
Southwest Airline started its operation at Texas intrastate market in 1971 with an
image as “underdog” in the eyes of both employees and the Texas public. In its early
marketing (1970s), Southwest retained the short-haul, high-frequency, low-cost,
“Luv” strategy, which let it won the official “triple crown” of the airline industry 12
times by mid-1993 (see Exhibit 1).
Question 1: What are some of the ways in which Southwest is different than
other commercial airlines?
Southwest Airline achieved its remarkable success and differentiated itself from
other commercial airlines by many unique ways.
Service: Southwest Airline added “Family Fun” that includes playing games
with passengers and hiring people who are fun that can translate to friendly into
its customer service and employment, which makes passengers and employees
like a big family. This service let passengers feel comfortable to choose SW and
attract more people to join SW family.
Operations: Southwest insisted flew only Boeing 737 jets to support its short-
haul and reduce jets maintenance costs. It also only operates a point-to-point
route system to eliminate the need for connection and reduce the travel time.
Moreover, Southwest flew into uncongested airports of small cities or smaller,
less congested airports of large cities and didn’t transfer baggage directly to other
airlines in order to keep fewest delays and fewest mishandled bags. In additional,
the airline only serve drinks and snacks, most often peanuts on board and did all
of its own ticketing (only 55% of seats are booked through a travel agent) to
achieve low service costs. Its “turn” time is also much fewer than average time in
the industry to achieve the minimum departure number and keep high frequency.
Marketing: Besides emphasizing price, convenience and service, Southwest also
run a series of advertisements called “Smart Campaign” to point out how smart it
is to choose Southwest Airline. Promotional devices also involved public
relations ranged from a Southwest-sponsored golf tournament to painting its 737
fights. All these activities attract more and more customers and help Southwest
expand its market.
Cost control System: Herb encourages everyone to take part in offering great
service at low cost (like pilots contributes ideas to save fuels). Southwest also
need to be sure that the departures per day is between 20-30, so that the staffs
and machinery are as productive as possible and no need to add more people.
People Management: In employment, Southwest focuses on attitudes rather
than skills to choose new employees and customers also can provide feedback in
selection process. The airline also has peer-hiring program to choose employees.
Internally, Southwest emphasizes recognition and promotions to motivate people
work harder, at the mean time, it also encourages fight flexibility that means
flight attendants can work as many trip as they want, or trade or give trips to
other flight attendants. Although the compensations at Southwest are lower than
at other major airlines, the employees get psychological satisfaction here.
