This paper examines the internal success of Southwest Airlines through the lens of employee loyalty and leadership strategy. Founded in 1966 by Rollin King and Herb Kelleher, Southwest overcame significant legal and competitive obstacles before its inaugural flight in 1971. The paper traces how Kelleher's people-first philosophy — placing employees above shareholders and customers — shaped the airline's management culture. Key practices discussed include open employee meetings, an inverted organizational pyramid, a no-layoff policy, and an employee stock ownership plan. Together, these strategies fostered exceptional employee loyalty that the paper argues is the foundation of Southwest's sustained operational and financial success.
This paper demonstrates the use of embedded quotation as argumentative evidence. Rather than simply asserting that Kelleher valued employees, the author quotes him directly and then explains the organizational practices that followed from that philosophy — linking stated values to measurable outcomes like the no-layoff policy and employee stock ownership.
The paper opens with a historical overview of Southwest's founding and early legal struggles, then narrows its focus to a thesis about employee loyalty. The middle sections develop this thesis by examining Kelleher's leadership style, his strategic management approach, and specific structural policies. The final paragraph synthesizes these elements into a conclusion about the relationship between management philosophy and business success. The Works Cited section follows MLA format with two Fortune magazine sources.
In modern aviation history, Southwest Airlines is truly one of America's most celebrated rags-to-riches stories. Southwest Airlines was a visionary business venture started by two entrepreneurs and friends from San Antonio, Texas in 1966 — Rollin King and Herb Kelleher. Although the airline was founded in 1966, it was not until 1971 that the public was offered passage on its inaugural flight. The period from 1966 to the maiden voyage of 1971 was no easy road, as the path was fraught with court rulings all the way to the Supreme Court and fierce competition from established carriers.
Today, Southwest Airlines enjoys an image of low-cost, no-frills air travel combined with strong customer satisfaction and employee loyalty. This paper focuses on the internal success of the airline from the perspective of employee loyalty, and how the airline maintains that loyalty in an era of airline bankruptcies, flight delays, union strikes, and employee layoffs.
Employee loyalty and satisfaction are not corporate traits that exist in a vacuum — excelled leadership is required as a mainstay. From the very beginning, the corporate leadership of the airline recognized that in order to build a satisfied and loyal employee base, leadership had to be strong, visionary, and grounded in a rigorous strategic management process. This nine-step process involves strategic planning, implementation, and evaluation.
Once Kelleher put the airline's strategic management program in place, a telling question was raised: "Who comes first — your employees, your shareholders, or your customers?" His response reflected a value instilled early in his life: "Your employees come first. If you treat them well, then they will treat the customers well, and that means your customers will come back and your shareholders are happy" (Huey 240–41).
To this end, Kelleher took the time to meet with employees from every department of the operation, including direct interaction with customers. Meetings are, to this day, consistently and continually held with flight attendants, mechanics, baggage handlers, and customer service and ticketing representatives. From these meetings, Kelleher learned, examined, and listened to all that he could, believing that "you've got to take time to listen to people's ideas. If you tell someone no, that's an act of power and, in my opinion, an abuse of power. I don't want to constrain people in their thinking" (Brooker 71).
Today, the biggest asset Southwest Airlines possesses is its employee loyalty. The airline has consistently valued employees over profit, a commitment exemplified by the fact that it has never conducted a large-scale layoff of any kind — with the minor exception of three employees dismissed early in the company's history, all of whom were rehired within a short period. Southwest's dedication to its workforce has made the organization stronger and has saved it a significant amount of money over time.
The trust and security demonstrated by Southwest's employees is evident in the quality of their work. There exists a bond of loyalty that is difficult to break, because employees know they have a future with the company in good times and bad alike. Research in organizational behavior consistently supports the view that job security and inclusion in decision-making are primary drivers of employee engagement — a dynamic Southwest Airlines has long understood and practiced. Management at the airline believes front-line employees are its most important assets, and this conviction is reflected in the company's day-to-day operations.
There is no doubt that the success of Southwest Airlines is a reflection of the company's goals and management style. By placing employees first — providing them with job security, a voice in operations, and a financial stake in the company's future — Southwest built a culture of loyalty that has sustained it through one of the most turbulent industries in modern commerce. The airline's story demonstrates that treating people well is not merely an ethical choice, but a sound and enduring business strategy.
Huey, John. "Outlaw Flyboy CEO's: Two Texas Mavericks Rant About the Wreckage of the U.S. Aviation Industry." Fortune, 13 November 2000, pp. 237–52.
Brooker, Katrina. "What It Took to Make Southwest Airlines a Great — if Wacky — Company: How Did He Do It?" Fortune, 28 May 2001, pp. 62–85.
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