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  1. “Southwest Airlines” 





    discuss Southwest Airlines’ background, current operations, its culture and people, financial highlights, company awards and recognitions and the airline industry and major competitors and its future.

    Describe Southwest Airlines current operations including its low-cost advantage and legendary customer service.

    Describe how Southwest Airlines’ culture and people ensure its success.

    Describe the airline industry’s environment and its major competitors.



Subject Business Pages 5 Style APA


Southwest Airlines


Southwest Airlines Company is a leading airline in the USA. It is ranked as the largest low-cost carrier in the world. The company is headquartered at Dallas, Texas. Southwest Airline was founded by Herb Kelleher in 1967 (Cote, 2018). It was originally known as Air Southwest but later adopted the current name in 1971. This was after a decision made by the management to expand its operations and make it an intrastate airline. As of January, 2021, the airline had 60,000 employees and operates more than 4,000 departures daily during the peak season. The aircrafts ply 103 destinations across the USA and ten other countries. By the fourth quarter of 2020 when most airlines were hard-hit by the Covid-19 pandemic, Southwest announced its plans to expand its itinerary to new airports namely the Palm Springs International Airport (Southwest, 2021). Besides, it noted that it would return to the destinations and airports it had previously exited namely the Jackson-Medgar Wiley Evers International Airport.

Current Operations

Southwest Airline has been thriving for the past two decades as a result of its model of operation. The airline has continued to be profitable at a time when others have been struggling. Bonchek and Libert (2017) attribute the firm’s success to its business model which embraces low-cost pricing, innovative solutions to logistic challenges, and extreme efficiency. For instance, the management carefully chooses its travel itinerary to reach its target customers who are mostly price sensitive. According to Harvey and Turnbull (2020), Southwest Airline has the most reliable point-to-point and non-stop route networks. Most destinations are in business markets and top leisure locations. At times, it is forced to add more routes to its network to ease travel for its loyal customers. This includes the decision to introduce new services to Hawaii, Mexico, Hilo, Cozumel, and Palm Spring in Calif during the 2020 Corona Virus Pandemic. Besides, Southwest prioritized customer experience. Using the transfarency philosophy, the company ensures that it is honest and fair when dealing with its clients. The customer-centric outlook ensures that it has many return customers who contribute towards its sustained profitability. Harvey and Turnbull (2020) emphasize that to further boost these operations, Southwest ensures it motivates its employees. As a result, Southwest Airline has multiple sustainable competitive advantages that have made it relevant in a continuously changing airline industry. A combination of these advantages have made the firm very flexible in changing its operations and processes to meet changing consumer behavior.

Culture and People

Southwest Airline applies the clan culture. Dyer (2018) notes that this culture is rooted in intensive collaboration. The employees work in a family-like environment where focus is directed towards nurturing, doing collective activities, and mentoring. The culture at Southwest promotes the wellbeing of the employees. By taking good care of the employees, the employees give back by ensuring the customers are happy and satisfied. The main characteristics of Southwest’s culture that mostly enhance productivity of the employees is the employee-centered approach where each worker feels celebrated, recognized, and appreciated (Cote, (2018). At the onset, the management ensures to hire only the most motivated individuals who are then inducted into the Southwest Way. Because of these elements, the airline has 4% voluntary turnover while 85% of the employees noted that they were satisfied and proud to work at Southwest.

Financial Highlights

Several articles acknowledge that Southwest Airline has had 47 years of continued profitability in an industry whose financial returns are debatable (Southwest, 2021). Some of the revenues for the company are presented in figure 1 below. As seen in the figure below, the company’s revenue has been increasing since 1997. In 2018, the airline reported revenues of US$ 21.965 billion.

Figure 1: Southwest Airline Revenue and Operating Margin (Southwest, 2021)

Company Awards and Recognitions

Southwest Airline has received many awards since its inception. In 2020, it was recognized for being the best airline in North America, the Best Airline in United States, the Best Economy in North America and the Best Low-Cost Airline in North America by the Trip Advisor Traveler’s Choice Award for 2020. The company was awarded for being the most trusted airline in the USA by the Reader’s Digest Magazine (Southwest, 2021). Third, it was listed as the Military Times Best for Vets by the Employers 2020. The airline also ranked number one in the category of excellence in communications measurement entry by the Gartner Communications Award 2020.

Airline industry, Major Competitors and its Future

The airline industry of which Southwest has very aggressive rivals that utilize a range of competitive strategies namely differentiation, cost-leadership, and focus to reinforce their dominance. Southwest competes against American Airlines, Delta Air Lines, and United Airlines (Harvey & Turnbull, 2020). According to industry experts, the future of this industry will be determined by four main trends. It is anticipated that the demand for air travel will increase over the next decade as more millennial customer’s value leisure and experiences, over ownership of property. Second, it is expected that the airlines will be more customer-centric to attract and retain more customers because of the increasing role of social media in propagating electronic word of mouth (Wade et al. 2020). Third, the firms are expected to adopt advanced analytics and data science systems to ease decision making. Fourth, stakeholders are increasingly worried about the environmental sustainability of the airlines industry.




Bonchek, M., & Libert, B. (2017). To change your strategy, first change how you think. Harv Bus Rev.

 Cote, R. (2018). Leadership Analysis: Southwest Airlines-Herb Kelleher, CEO. Journal of Leadership, Accountability & Ethics, 15(1).

Dyer, C. (2018). The Power of Company Culture: How any business can build a culture that improves productivity, performance and profits. Kogan Page Publishers.

Harvey, G., & Turnbull, P. (2020). Southwest Airlines. Case Studies in Work, Employment and Human Resource Management, 80.

Southwest. (2021). Southwest Airlines Reports 47th Consecutive Year of Profitability. Retrieved from: http://investors.southwest.com/news-and-events/news-releases/2020/01-23-2020-112908345

Wade, B., Topalova, Y., Boutin, N, Loh, H. Ukon, M, & Wise, A. (2020). Seven Trends That Will Reshape the Airline Industry. Retrieved from: https://www.bcg.com/publications/2020/seven-trends-resha





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