Southwest Airlines is a U.S. based airline carrier and the world's largest low-cost carrier. It was formed in 1967 and, as of 2012, had almost 50,000 employees operating about 3,500 flights per day. The company grossed $17.1 B in 2012 with its fleet of Boeing 737s, resulting in net income of $620M, or 36%.
SW Airlines
Company Background
Southwest Airlines is a U.S. based airline carrier and the world's largest low-cost carrier. It was formed in 1967 and, as of 2012, had almost 50,000 employees operating about 3,500 flights per day. The company grossed $17.1 B. In 2012 with its fleet of Boeing 737s, resulting in net income of $620M, or 36% (SW Airlines, 2013). The company is the world's largest operator of the Boeing 737s with over 550 currently in service. The company has an outstanding safety record, and is considered to be one of the 10 safest airlines globally (in Depth, 2012).
Historical Perspective
Southwest has the fewest complaints in the airline industry, the award for the most on-time flights, and best baggage handling. For these achievements, it won the industry's Triple Crown award for Best Airline five times in a row (Fortune 100 Best Companies, 2011. Even after the 9/11 crisis, SW had to cut flights by 20%, and while most other airlines cut staff, SW was willing to lose money to protect its people (Aboutsouthwest; southwest.com). The culture of the company was shown by SW's CEO Jim Parker, who noted, "Clearly we can't continue to do this indefinitely, but we are willing to suffer some damage, even to our stock price, to protect the jobs of our people" (Gitell,2003, p. 242). This resulted in the company maintaining a presence in the market, a great deal of positive publicity, employee loyalty, and a cultural commitment to using a difficult time to increase its presence in the market and show that it was committed to its employee culture.
Current Situation
Southwest's policy after 9/11 resulted in the company maintaining presence in the market, a great deal of positive publicity, employee loyalty, and a cultural commitment to using a difficult time to increase its presence in the market and show that it was committed to its employee culture. Not only did SW act innovatively with the "Take off -- not lay off" policy, they paved the way for other companies to consider at least three major alternatives to simply across the board layoffs: 1) How much will a layoff cost the company over the long-term? This is important -- will clients be dissatisfied, production or services halted? 2) Are there external perks or benefits that can be cut before people (office parties, bonuses, etc.)? Can the organization find ways to reduce costs without reducing people? 3) Are there alternative jobs current employees could perform? Are there ways that rotation, early retirement, cross-training, etc. could occur to make a more ethical plan? (What are Alternatives? 2012).
SW used its core values of human beings as an important part of its organization as the basis for its decision on a no layoff policy. Downsizing would have undermined this core strategy, and was not an option for management. Because of their commitment to long-range and creative, out of the box, thinking, the company was able to leverage job security to end up with a stronger, more committed workforce. In addition, employees felt empowered with a mandate that they could contribute cost-cutting ideas without fear of repercussion. These happy employees spread the word to others, clients, stakeholders, and even other potential employees; changing the culture of the organization forever.
SWOT
In the highly competitive airline industry, while not the largest company, the company that seems to glean the most press for providing innovative solutions and customer service is Southwest Airlines.
Strengths
Weaknesses
Opportunities
Threats
Strong fleet and firm operating stance as low-price leader
Limited routes, about 60 cities in the U.S.
International expansion
Intense and rapid competition
Friendly and professional staff
No product segementation (first class, coach, etc.).
Expand current flight distances and locations
Price fluctuations and dependence on foreign fuel
Four decades in the industry, market share and consumer trust
Limited cargo or freight space
Aquired Air Tran
Media issues that translate into stakeholder doubts
Economies of scale while still providing value and service
Heavy dependence on Boeing
Growth of U.S. traffic by 4% per annum through the decade; recovery of tourism
Regulations and barriers in marketplace
Central Issues for SW Airlines
Like many carriers, SW is plagued with issues surrounding fluctuating fuel prices based on foreign oil, a lull in the transportation market, and some recent negative publicity. SW cannot do much about the price of fuel or the national economy, but is responsible for its position on corporate social responsibility as well as adhereing to its mission statetment. In fact, in scanning documents about Southwest, one finds that they have been accused of being insensitive to the issue of larger built passengers. It appears that, at times, SW requires large passengers purchase two seats or not fly. Of course, as with most controversial issues, there are layers of issues surrounding this controversy: are Americans becoming larger? Are SW seats smaller to squeeze more profit into a flight? What are the safety ramifications of a larger person in a single seat? Is the comfort of other passengers an issue? Are there moral and ethical principles at work here, or is SW Airlines just selfish and greedy? (Netter, 2009).
Analysis shows that Southwest, and most of the major airlines have not reacted with fairness with their seat sizes; Americans are growing larger, but seat distance and sizing remains equal to, or smaller, than 3-4 decades ago. This is unfair and unethical because it punishes everyone, not just the obese. It is not uncommon in the airline industry, particularly after fuel became expensive to charge for excess baggage weight. The airlines each have different policies and procedures, weight limits, etc. Thus, if we think about it, excess girth and/or weight is quite similar. Tickets are issued based on a per seat limitation -- a client should comfortably fit into a seat. In this way, each person will be relatively comfortable. Principles of utilitarianism dictate that it is not just the obese person's considerations that must be addressed, but also those of fellow passengers. These other passengers paid for a seat/ticket, and thus should not be placed in a position of discomfort because the person next to them takes up more than 1 seat's space. In addition, safety and accessibility issues may be problematic. There is certainly a great deal of subjectivity when dealing with issues of this nature. The flight crew must make decisions about people, luggage, age, demeanor, etc., so issues of who and who not to allow on the aircraft should be clearly outlined in a company document.
Alternatives and Potential Solutions
You’re 79% through this paper. Sign up to read the full paper.
Sign Up Now — Instant Access Already a member? Log inAlways verify citation format against your institution’s current style guide requirements.