Southwest Airlines: In a Different World

Presented by: GROUP 6Abhijeet Kumar 13PGP001Kaiwalya Misra 13PGP025Ruchita Burde 13PGP106Arthur de Saint Jean 14Sep001

Case facts

• SWA was founded in 1967, but operations weredelayed for nearly years.

• In April 2008 ATA Airlines Inc. ceased its operations dueto which 16 LaGuardia time slots became available

• SWA is in dilemma whether or not to bid for thoseslots.

• Those arguing for the acquisition pointed out need forcontinued growth

• But operations manager were concerned aboutpossible delays caused by difficulties getting into andout of LaGuardia.

Q1. Why has Southwest been so much moresuccessful than its competitors?

Factors contributing to success

• Frequent departures

• Strategic selection of Airports

• Cutting down the cost by providing no in-flightservice

• Organization culture was very good which resultedin very less attrition rate

• High utilization of aircraft because of 30 minturnaround time

• Operation is well aligned with organization’sobjective

Q2. How has the original strategy been altered inrecent years? How, if at all, have these changesaffected Southwest's key success factors?

Changing customer experience

SWA altered its original strategy as an effort tochange customer experiences:• Development of long distance service

• Code-sharing agreements

• Changes in boarding process

• Fuel hedging

• Services in new U.S. market

• Services like: Onboard internet, cashless cabin, bags flyfree

Impact on success factors

• Since Southwest is extending its service to newmarket, it may be difficult to maintain standardboarding procedure. It may lead to increase inturnaround time(i.e. more than 30 minutes)

• Also SWA has to hire new employees. If peoplewith wrong attitude are hired, then it may bedestructive for SWA culture

• If new boarding process proves to be effective, thenit may result in cost reduction

Q3. What kinds of things over which Southwest'sleadership has some control could go wrong? whatshould be done to make sure they don't happen?

Things that could go wrong

• SWA is able to achieve turnaround time of 30 minonly because of its trained staff. If SWA goes forexpansion then it would need more trained staff. Ifit hires staff with wrong attitude then it could loseits competitive advantage

• It provides no in-flight services such as free meals,etc in order to cut down the cost. But in longdistance flights, if meal is not served then it mightdamage SWA’s image.

What can be done?

• Try to retain its existing staff. Also give moreemphasis on hiring process so that right people arehired.

• Provide in-flight services for long distance flight

Q4. Based on your response to questions 3, whatfurther changes, if any, need to be made bySouthwest's leadership in the face of competitivemoves and general economic conditions?

Changes recommended

• SWA should seek for growth opportunities elseother competitors will take over the market.

• Code-sharing agreements with other airlines.

• Look for new routes where there is a demand.

Q5. Would you recommend that Southwest Airlinesacquire the gates and slots available at LaGuardia?Why?

SWA should acquire gates and slots available at LaGuardia

• It takes only 8 flights to cover daily cost and ROI is25.4%.

• In the long run, Islip cannot be considered as anoption for serving New York customers

• It would serve New York market which is very hugeand has high potential growth

• Operation at LaGuardia can be isolated to makesure that problem of delay does not flow throughthe network

Thank you