Southwest Airlines was incorporated in Texas and commenced Customer Service on June 18, 1971 with three Boeing 737 aircraft serving three Texas cities-Houston, Dallas, and San Antonio. Today, Southwest operates 537 Boeing 737 aircraft between 68 cities. Southwest topped the monthly domestic originating passenger ranking for the first time in May 2003. Year-ending result for 2009 marked Southwest 37th consecutive year of profitability. Southwest became a major airline in 1989 when it exceeded the billion-dollar revenue mark, Southwest is the United States’ most successful low-fare, high frequency, point-to-point carrier. Southwest operates more than 3,200 flights a day coast-to-coast, making it the largest U.S. carrier based on domestic passengers’ carrier as of September 30, 2009 (Southwest Airlines Fact Sheet, 2010.
Southwest’s success may be due largely to its unusual focus on creating value for employees. “LUV” and “FUN”, the cornerstones of Southwest’s employees-relations approach, represent concern and respect for the individuals, as well as the conscious creation of an environment that encourages all employees to have fun on the job. Southwest’s low turnover and high productivity suggest that the airline creates significant value for employees (Hallowell, 1996).
Southwest’s success is also dependent on its organizational capabilities that enable it to convert some of the value created for employees to customers and shareholder value. Thus Southwest provides an example of competitive advantage created thru people (Hallowell, 1996).
The creation and maintenance of Southwest’s competitive advantage can be seen as an honorable cycle. Describing this cycle requires theories of incentives, organizational capabilities, and strategic positioning. First, Southwest creates value for its employees, which increases their loyalty. Second, Southwest converts some of that value to consumers and firm value by designing operating processes and encouraging behavioral norms that enable employees both to reduce cost and to improve service. Third, Southwest captures value through low cost and excellent service. This “create value-convert value-capture value” cycle may apply to some portion of the Southwest company’s competitive advantage in other labor-dependent services (services where labor is both a large proportion of total costs and employees can dramatically affect day-today quality) (Hallowell, 1996).
Southwest Airlines HR
Linking human spirit and personal performance to training and corporate vision is the key to Southwest Airlines’ success in the aviation business. Southwest Airlines rank fifth in all global carriers. Southwest has a unique method for personal ad business success I an extremely competitive business (Bruce, 1997).
At Southwest it all begins with the fundamentals, which are emphasized in every course offered at the University for People Employee Learning and Development Division. The University operates five...