1、 Mission The mission of Southwest Airlines is dedication to the highest quality of Customer Service delivered with a sense of warmth,friendliness,individual pride,and Company Spirit.About SouthWestMore than 37 years ago,Rollin King and Herb Kelleher got together and decided to start a different kind
2、 of airline.They began with one simple notion:If you get your passengers to their destinations when they want to get there,on time,at the lowest possible fares,and make darn sure they have a good time doing it,people will fly your airline.Began as a small Texas airline Fly to 64 destinations across
3、US 3400 times a day,With over 500 aircraftSouthwest has consistently led the entire airline industry with the lowest ratio of complaints per passengers boarded Employees will be provided the same concern,respect,and caring attitude within the organization that they are expected to share externally w
4、ith every Southwest Customer.OfferingsAlways the innovator,Southwest pioneered Senior Fares,a same-day air freight delivery service,and Ticket less Travel.They Provide low cost flying across the U.S citiesThey are so low they compete with car faresThey have a brilliant website which any customer can
5、 easily navigate throughThey provide additional offerings such as car/hotel bookings on their site booking.So lowly priced and they still offer discountsProvide vacation packages to locations like(LA,Las Vegas,Disney Land)Rapid Rewards-Fly just eight(8)roundtrips in 24 consecutive months Pricing Str
6、ategy SWAs pricing strategy is to charge the lowest possible fare that still enables the airline to make a profit.They think that there competition is with automobiles.Southwest must keep its operating cost to the bare minimum.These fares would not be sustainable unless it is supported by a high pas
7、senger load factor Operation Simple It offers a single class,open seating,and no meals.Its aircraft fleet consists only of one type-the Boeing 737-to minimize training and maintenance costs.Run its own reservation system,and sells a significant portion of reservations through its Web site.It can cut
8、 costs in the customer service Profit Analysis Analyzed viability of increasing profits by reducing airfares 20%Investigated a SWA high volume route for this analysis(LA/Oakland)Current route demographics:Current Passenger Load70.50%Daily Flights between LAX and OAK20Market Share18%Airfare Roundtrip
9、$118.00 Plane capacity 737137GENERAL INFORMATIONCurrent SWA CostsCosts for LA/Oakland RouteFixed Per YearVarible Per FlightVarible Per PassengerCrew Pilots(3 member)624.00$Crew Attendants(5 attendants)600.00$Base Fuel685.00$Extra Fuel for Weight1.50$Ticket Handling2.00$Ticket Commissions(Average)7.3
10、0$Mechanical Maintenance350.00$Cabin Service200.00$Baggage Handling150.00$Landing Fees&Leasing500.00$Refreshments2.00$Plane 15,175,000.00$Overhead/Administrative Costs9,964,500.00$Total25,139,500.00$3,109.00$12.80$CostsPrice#Tickets Per Year#Flts Needed per dayActual#Daily FltsActual#Yearly FltsFixe
11、d Costper YearVarible CostPer Flight,TotalVarible CostPer Passenger,Total118.00$686,200 14207,300 25,139,500.00$22,695,700.00$8,783,360.00$106.20$861,400 18207,300 25,139,500.00$22,695,700.00$11,025,920.00$100.30$934,400 19207,300 25,139,500.00$22,695,700.00$11,960,320.00$94.40$1,000,100 20207,300 2
12、5,139,500.00$22,695,700.00$12,801,280.00$82.60$1,124,200 23238,395 25,139,500.00$26,100,055.00$14,389,760.00$70.80$1,299,400 26269,490 25,139,500.00$29,504,410.00$16,632,320.00$Revenues&ProfitMax Profit PointMax profit point realized with a 15%reduction in ticket pricePrice#Tickets Per YearTotal Cos
13、t Per YearTotal Revenue Per YearTotal Accounting Profit Per Year118.00$686,200.00 56,618,560.00$80,971,600.00$24,353,040.00$106.20$861,400.00 58,861,120.00$91,480,680.00$32,619,560.00$100.30$934,400.00 59,795,520.00$93,720,320.00$33,924,800.00$94.40$1,000,100.00 60,636,480.00$94,409,440.00$33,772,96
14、0.00$82.60$1,124,200.00 65,629,315.00$92,858,920.00$27,229,605.00$70.80$1,299,400.00 71,276,230.00$91,997,520.00$20,721,290.00$Yearly Profit vs.Number of Tickets Sold$20,000,000$40,000,000$60,000,000$80,000,000$100,000,000 600,000 700,000 800,000 900,000 1,000,000 1,100,000 1,200,000 1,300,000 1,400
15、,000 Tickets Sold per YearDollarsTotal Cost PerYearTotalRevenue PerYearTotalAccountingProfit PerYearMax Profit PointCost vs.Revenue vs.ProfitTCProfitTRPROMOTIONRapid reward offerAnnual education travel programSpecial offersCelebrity endorsementPromotional partnersCommercial AdsRapid Reward OfferGet
16、one bonus credit when you fly into or out of Minneapolis/St.Paul!Receive triple Rapid Rewards credit and up to 25%off with Alamo!Avis rewards Southwest Airlines Rapid Rewards Members with double credit and up to 40%off!For a limited time,earn a bonus Rapid Rewards credit at any Best Western Hotel!Bu
17、dget rewards Rapid Rewards Members with up to 40%off and up to double credit!Receive triple credit at Cambria Suites hotelsDouble up with Dollar!Dine your way to Rapid Rewards credits with Rapid Rewards DiningTM.Up to 20%off&earn double Rapid Rewards credits with Hertz!Earn Triple Rapid Rewards Cred
18、its with HyattBook smart.Receive double credit at Thrifty.Annual Education Travel Program Southwest Airlines and the Hispanic Association of Colleges and Universities Open Travel Program for College Students Online registration starts from 13 apr 09 till 5 jun 09.Celebrity Endorsement Model Bar Refa
19、eli unveiled Southwest Airlines new SI One 737 at LaGuardia Airport in New York today.Promotional PartnersCredit cardsRental carsHotelsDiningRetailPEOPLEDIFFERENT CAREERS AT SOUTHWEST AIRLINESCONTINUECONTINUEBENEFITS-THE EIGHT FREEDOMSCONTINUE CULTURECulture:the development,improvement,and refinemen
20、t of the originality,individuality,identity,and personality of a given people.Work HardDesire to be the bestBe courageousDisplay a sense of urgencyPersevereInnovateAdhere to the Basic PrinciplesTreat others with respectPut others firstBe egalitarianDemonstrate proactive Customer ServiceEmbrace the S
21、WA FamilyHave FUNMaintain perspective(balance)Celebrate successesEnjoy your workBe a passionate Team player PLACESOUTHWEST AIRLINES TOP TEN AIRPORTS Low cost Un tapped market Less facilities Comparatively less luxuries KEY POINTSTHE SOUTHWEST EFFECT AND CODESHARE AGREEMENTS Morris Air Muse Air Icela
22、nd Air ATA Airlines West Jet Airlines Volaris ROUTE-MAP OF SOUTHWEST AIRLINES NON-STOP SERVICESProcess Southwest has built a successful business on an unusual model:Flying multiple short quick trips into the secondary(more efficient and less costly)airports of major citiesUses only one aircraft type
23、,the Boeing 737 Tickets cannot be purchased through common online venues and a minority are booked through travel agents.Southwests tickets are issued directly by the airline over the phone or online at the companys website.Southwest allows passengers to change reservations without additional cost.R
24、efunds can be made online where you need to cancel the reservation or you can do so by calling the reservation number.Customers are not assigned seats;rather,they are assigned to one of three boarding groups“Southwest offers no aisle or window seat assignments Extend no upgrades nor preferred boardi
25、ng status to their most frequent travellers Southwest historically allowed three pieces of luggage to be checked in free as opposed to the limit of two on the domestic flights of some other U.S.airlines Southwest served smaller meals than the meals served by full service airlines,with shorter flight
26、s receiving single small snacks and soft drinks,and longer flights(with a duration of about 3 hours or more)meriting Snack Packs of pre-packaged goods.In the 2000s these meals in a bag typically exceed the food served on full-service airlines.There are several flights that are at least of two hours
27、long whereby you are served with peanuts and pretzels.If you are on a non stop flight,then a packaged snack will be served.Other complimentary tea,coffee,non alcoholic drinks are also available but some product such as beer,wine may be charged.Provide no lounges with free drinksPhysical Evidence Sou
28、thwest is known for colourful boarding announcements and crews that burst out in song.“Marvin Martinez,a bellman and front desk agent at the San Antonio River Walk Marriott,says,“We all bring out smiles in our own special way.Me,Im a performer.Every day Im on stage in front of my biggest fans,my gue
29、sts.When I walk into the lobby,Im on!Im an aggressive hospitality animal.My guests always leave satisfied.”An Birds Eye View An Birds Eye View Part C:Prescribe1.Ptoduct with competitors Since recent terrorist attacks,competition for southwest airlines has shifted from major airlines to low-fare airl
30、ines.After September 11,2001,Delta,the second largest U.S.carrier,cut 21 percent of its workforce and in 2006 operated with approximately 47,000 employees.A third past competitor,America West,is faring better than Southwests above two competitors.Jet Blue is one of Southwests most noteworthy competi
31、tors.An Birds Eye View All of the competitors have come into head-to-head competition with Southwest on several occasions.For now,considerations for serious expansion have been put on hold as many airlines are still trying to recover from losses over the past few years.An Birds Eye ViewAn Birds Eye
32、ViewPart D:The Future1.The problem:Competitors have learned from Southwest and its unique management strategies,and they are using these tactics as well as unique ones to win over consumers.Southwest has always utilized conservative growth tactics,but this may hurt them if new competitors opt for fa
33、ster growth strategies.An Birds Eye View2.The measure:In mid-2007,Southwest provided service to only sixty-three cities in thirty-two states,so there are tremendous opportunities for expansion Southwest to begin service in their communities because of the positive impact the company has had when it began operations in a new location.An Birds Eye View
