Southwest Airlines: Culture, Values and Operating Practices

Southwest Airlines: Culture, Values and Operating Practices

1) What strengths can you identify at Southwest Airlines? Why do you think Southwest is one of the most admired airlines in the world? What weaknesses or problems do you see at Southwest Airlines?

Despite the crisis being dealt upon by Southwest Airlines in relation to the September 11 bombing, several strengths or advantages can be identified, which determines the airline's survival in facing the crisis.

Primarily, compared to the airline's competitors, Southwest Airlines dealt with the problem by cutting no flights and laying off no employees, based on their management's philosophy for the past two decades of managing the airline in good times so that both the company and its employees could prosper through bad times. Southwest Airlines had the lowest operating costs of any US airline, had $1 billion in cash, and had the strongest balance sheet and credit rating of any US airline, allowing management to quickly borrow an additional $1.1 billion and give the company a buffer to pay all its bills and absorb any cash drains (2003).

In addition, the airline was able to implement E-ticketing, or buying travel tickets online, which spares passengers from spending additional costs from travel agents. Through e-ticketing, passengers also save time in purchasing their tickets (2003).

Another strength the airlines has, is during its start as a company, it was able to accommodate the services of Lamar Muse as its Chief Executive Officer, an aggressive and self-confident airline veteran who knew the business well and who had the entrepreneurial skills to tackle the challenges of building the airline from scratch and competing head-on with other competitors (2003). This serves as the airlines' strength because with the leadership, motivation and enthusiasm of Muse, the airline was able to become successful in its endeavors. In addition, he was able to attract other skillful individual like him to work for the company. He was also able to hire a talented senior staff that included a number of veteran executives from other carriers. These staffs were innovative, would venture to doing things unconventionally, and were motivated by the challenge of building an airline from scratch (2003). This just means that along with Muse, he was able to recruit employees who would promote and encourage the company's growth through innovation and entrepreneurship by using new techniques and strategies. Moreover, the airline was also able to attract private investors and initial public, which served the company a good sum of money to purchase planes and equipment, including Boeing 737s at discounted prices (2003).

An additional strength of the company is that it was able to charge cheaper rates than its competitors, for the company believe that low fares would allow more people to fly and grow the market (2003).

The airline also has a strong and firm legal and regulatory structure that would make personnel realize the company's drive to survive and prosper despite the odds it encounters (2003).

From the supervision of Herb Kelleher, he was able to implement the efficient and effective interaction in the airline company. He made a point of visiting with maintenance personnel to check on how well the planes were running and of talking with the flight attendants; he did not do much managing from his office, but instead, being out among the troops as much as he could (2003). His preference is to become more involved with the operations of his employees, thus, creating more interactive and more personal relationships with them. In addition, his style was to listen, observe, and offer encouragement to his employees, attends most graduation ceremonies of flight attendants from Southwest University, appears to help load bags on important holidays, and knows the names of thousands of his employees (2003).

In terms of its financial operations, implemented on fiscal conservatism, a strong balanced sheet, comparatively low levels of debt, and zealous attention to bottom-line profitability (2003). Through this, the airline company was able to combat suffering bankruptcy from the September 11 bombings.

Care for the employees is also being given emphasis and importance of Kelleher in the company, such that equally treating his employees as his customers. According to Kelleher, treating the employees right would make them treat outside customers right (2003).

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With these strengths,