Southwest Airlines' Sustainability And Future Essay

2113 words - 8 pages

Southwest Airlines’ Sustainability and Future

“The mission of Southwest Airlines is dedication to the highest quality of customer service delivered with a sense of warmth, friendliness, individual pride, and company spirit (Southwest Airlines, 2009).”
Since its conception in 1971 by founders Rollin King and Herb Kelleher, Southwest Airlines has stood by their mission statement. The simplistic belief of "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 (Southwest Airlines, 2009)” has served Southwest in becoming a major competitor in the airline industry. It is now the fourth largest airliner in the United States and ranked 267 on the Fortune 500 list of America’s largest corporations. From an operational base of three planes flying to three cities, Southwest Airlines now have fights going to 64 cities in 32 states and a fleet of more than 500 planes (Fortune 500, 2009). Presented are some numbers that will give a brief synopsis of the company’s operation: net income: $645 million; total passengers carried: 101.9 million; total RPMs: 72.3 billion; average passenger load factor: 72.3 percent, and total operating revenue: $9.9 billion. While the airline industry has been permanently altered by the events of September 11th, Southwest has remained profitable. They were the first airline company to utilize a frequent flyer. Southwest also pioneered the use of senior discounts, same-day air freight delivery services, ticketless travel, and many other innovative programs (Fortune 500, 2009). Southwest’s organizational structure mirrors an inverted pyramid. Management is at the bottom which supports the employees who are considered to be the experts in the organization. Southwest’s leadership approach which management decisions are made by everyone in the organization and not just the executives. They also place an emphasis on their employees, initiating the first profit-sharing plan in the U.S. airline industry in 1974. In 2000, Southwest provided their employees a record $138M in profit sharing which increased their annual salary by a record 14 percent (Fortune 500, 2009). What is Southwest’s secret formula for success? The answer is simplicity! The airliner keeps it operation down-to-earth and consistent. This approach has kept its operational costs down which has allow them to maximize their assets and improve the expectations of their customers. This notion is reflected at the core of Southwest’s CEO and executives. The present CEO, Gary Kelly, still exemplifies the same business practices and ethics, as did the original founders. The airliner started and has continued the low-cost, no-frills, budget company way of thinking and leadership. Upper management positions remains limited but very well compensated for their loyalty and work. Southwest’s management relies...

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