Southwest Airlines
Southwest Airlines is one of the biggest airlines in the United States and the world. The airline is headquartered in Dallas, Texas and flies to over 121 destinations within the United States and ten other countries. They have a reputation for providing low fares and are an excellent choice for those looking to fly inexpensively.
Business model
In order to compete with the larger airlines, Southwest Airlines has developed a business model that focuses on reducing costs while increasing employee productivity. They use point-to-point routes, a single type of aircraft, and a streamlined operations process. This model has been copied by other low-cost carriers around the world. Southwest Airlines holds about 20% of the US domestic market, making it one of the largest low-cost carriers in the world. It competes with Delta and American Airlines by offering low-cost flights that enable customers to travel without paying the high costs associated with luxury services.
This business model focuses on minimizing costs by reducing labor, capital outlay, and fuel expenditure. It has also found new sources of revenue through advertising and outsourcing. Moreover, Southwest Airlines outsources most of its operations except cabin crew and pilots. Its head office functions are also outsourced.
Employees
In the past three months, Southwest Airlines has increased its employee count by nearly 9,000. The company has returned to the pre-pandemic staffing levels faster than the other major carriers. In May, Southwest Airlines had 60,081 employees, up from 60,390 employees in May 2018. In contrast, 12 months ago, the company had 53,197 employees. This growth has kept the airline from being in the red in terms of headcount, though.
As the US airline industry prepared for a full-scale operational meltdown over the Independence Day holiday, Southwest Airlines avoided the crisis by cutting flight cancellations by a third. The airline operated over 1.8 million passengers during the holiday, and its on-time performance was 92%. While Southwest may not be able to reduce flight cancellations altogether, the company is focused on increasing its staffing levels. In addition to paying employees more, the airline is increasing bonuses for employees who refer friends and family.
Safety record
Southwest airlines has been around for 47 years and has had an excellent safety record. The airline has experienced some black marks in the maintenance department, though, including an incident that grounded 127 jets in February 2015. The airline failed to properly inspect the backup hydraulic system that controls rudders if the main system fails. Also, in 2008, the airline failed to pass an Operational Safety Audit required by the International Air Transport Association.
Southwest Airlines has been under scrutiny for years due to its safety record. However, the airline has cooperated with congressional and regulatory inquiries, and the airline is proud of its record. In fact, the airline has paid millions of dollars to settle safety violations. This hasn't stopped the airline from flying millions of passengers every year.
Codesharing with AirTran
The new codeshare deal between AirTran and Southwest Airlines gives both airlines access to the global market. Southwest has long aimed to penetrate the international market, and it has begun to do so through partnerships with Mexican airline Volaris and Canadian airline WestJet. While organic growth in the US remains slow and mature, the codeshare arrangement with AirTran will give both airlines access to new markets.
Codesharing will be phased in starting in the first quarter of 2013, with full connectivity starting in early Apr-2013. Baggage and ticket fees will not apply on AirTran segments. However, Southwest and AirTran have not disclosed the number of passengers who will benefit from codesharing.
Custom-painted plane
The new paint scheme on a Southwest Airlines Boeing 738 is a tribute to the state of Texas. The plane was the first to be flown with the new paint scheme on Monday. The company's senior vice president and chief marketing officer, Ryan Green, said that the design, which features a heart on the belly of the plane, will remain for many years to come.
While Southwest does not disclose the cost of custom-painting passenger airplanes, most airlines pay anywhere from $50,000 to $300,000 for the service. The more detailed the design and the number of colors will increase the price. The livery will also require more labor and time than a standard paint job. Unlike other airlines that do not offer custom-painted planes, Southwest will only paint planes when they are in need of repainting.
