Southwest Airlines

Introduction

The airline industry was first started in 1918. The postal service was the first company to start using the service with the backing of congress. In 1925 Ford Motor Company started to run the first profitable passenger service with a plane that had the capacity to hold 12 passengers. At first the airline industry was seen only as a supplement to the railway transportation. That trend slowly changed as more airline companies sought to open transportation to the world. This was made successful by Pan American World Airways before 1940. During World War II things were put on hold though. After the war many governments came together in order to come to an agreement on airway rules and limitations. This opened the skies to many more opportunities for the industry. In the 1970s the standard for air travel was established with the introduction of the Boeing 7474, DC-10 and the Lockheed L-1011. These were all jumbo jets that held a good capacity of passengers while offering faster travel. With this new faster travel came regulations and deregulations and competitors started to pop up forming price wars. The airline industry however has been on a roller-coaster ride of being profitable and then being nonprofit able. The airline industry is one of the most turbulent industries out there.

Southwest Airlines took flight in 1971 within the state of Texas. This was a different kind of airline started by two gentlemen named Rollin King and Herb Kelleher. The notion they started the company with was to get their passengers to their destinations on time and at the lowest fare possible. In 1979 southwest finally branched out to destinations out side of Texas. Today Southwest carries more than 70 million passengers to and from their 60 different destinations. Southwest Airlines has also won the Triple Crown award six times, the first time was in 1988 and they won it for five consecutive years from 1992 to 1996. The Triple Crown is rewarded for the best on time record, best baggage handling, and the fewest complaints. They have proven to be a leader in the industry by piloting such programs as ticket less travel.

Southwest offers many products to their customers. They offer not only airfare but also complete vacation packages. A person can book their air, hotel, and car with them for a better deal than booking all three items separately. They also offer specials on cruises and theme park tickets. People can even purchase gift cards through them and they even sell their own merchandise. They even offer such things as tickets to shows at their various destinations such as Las Vegas.

In 2005 it was yet another profitable year for them. The airline industry is one of the most turbulent ones. You can go from being profitable one second to being bankrupt the next. Southwest has proven this concept wrong each year the company has operated through. This airline has been in operation for 33 years and each year the company has been profitable. In the year 2005 Southwest's net income was $484 million. The net income was down from the year 2000 when it was $625 million. Even though they did not net as much income; a profit was still produced where as other airlines were starting to fold. It is reasonable to see a drop in profits through the tragedies of 9/11. The average flight costs about $100 and 65% of the fares are booked online today. There are big plans in the future to contribute to the communities and to build the company even more. Southwest is a company that is committed to what they believe in which is providing people with the most affordable airfares while offering the best service possible. Southwest realizes though to turn a profit they have to also operate at the lowest cost which they have done for many years. They are a company that would like to stay committed to the satisfaction of their customer while they can still make money.

Corporate Culture and Motivation

Over the years Mr. Herb Kellher, founder of Southwest Airlines, has kept a strong management team in place at Southwest airlines. When Mr. Kellher started his company people thought that he would not make it because he liked to drink and have fun by making people laugh. He was just a very outgoing person. With some exceptions Mr. Kellher looks for some of the same people to put on his staff today. If you are fun, outgoing, and an energetic team player he feels that he can find a place for you within his company. Company officials have said that during your interview process it depends on how much you smile and how happy you appear helps to determine if you are what Southwest is looking for. Mr. Kellher's beliefs are that there are enough clones out there that come to work with a fake appearance or a mask on. He is looking for individuals that are happy, have there own personality and just being themselves. He faced some problems a few years ago due to the labor unrest from the Transportation Union Workers (TWU), which caused the possible future CEO that had in mind to replace him, Mr. Jim Parker, to resign in the summer of 2004 (Wikipedia). Mr. Parker was an inspiration to a booming company. He had dedicated himself to over 18 years with the company and had shown a profit for 50 straight quarters. To this day no one truly knows why he resigned other than the speculation that he was receiving raises while being in a heated financial contract confrontation with the flight attendants a few years ago. It was a total shock to the majority of the board members including Mr. Gary Kelly. Mr. Kelly was sitting as the Chief Financial Officer before being made aware that he would occupy the post as the current CEO. Ms. Laura Wright would slide over to occupy the opened post of Chief Financial Officer.

When the company first started, Southwest faced some hard times. Instead of laying-off personnel, Southwest offered pay cuts throughout the company keeping jobs for everyone during the trying times. Southwest is known to take care of their people by providing them with company rewards. It should not be a surprise to walk up to a counter and see the ticket agent working in pajamas during their shift. In order for everyone to benefit on some of the company perks no matter what time your shift is, the Corporate Office has authorized barbeques at 2:00 am in the morning so that all the employees can experience the team aspects of the company. It has been said that at some of the Southwest District Offices conference rooms are aligned with rocking chairs for the employee meetings. It will not be out of the ordinary to have to participate in a song with one of the flight attendants while boarding a flight or to be hit with a peanut by one of the attendants. Southwest operations are much different from the more common airlines today. "The