History of SWA

"Weren't Just Airborne Yesterday"

30 years ago, Rollin King and Herb Kelleher got together and decided to start a different kind of airline. Southwest airlines' profit growth is always related to customer service. There are some events that illustrate the importance of customer service to Southwest Airlines.

1977

Southwest carries its five millionth passenger! And Southwest stock is listed on the New York Stock Exchange as "LUV."

1984

Marks the fourth consecutive year Southwest is ranked number one in Customer satisfaction. Southwest Airlines' inflight magazine, Spirit, celebrates its 13th year of flying high. And Southwest unveils the first 300 series aircraft in its Boeing 737 fleet christened the "Spirit of Kitty Hawk."

2000

On May 1, 2000, Southwest Airlines introduces "SWABIZ," a tool that assists company travel managers in booking and tracking trips made through southwest.com. Southwest holds the first annual Phoenix LUV Classic Golf Tournament and Party on May 5, 2000. Proceeds benefit Southwest's primary charity, the Ronald McDonald House. New service to Albany International Airport begins on May 8, 2000 and to Buffalo-Niagara International Airport on October 8, 2000. Southwest's tenth specialty aircraft, "New Mexico One," is unveiled.

As we all know, better-than-average customer service can make a company more profitable. Southwest Airlines is a good evidence to back up this idea. however, what makes SWA so good at customer servies? Two important things ensured Southwest Airlines can conduct better service---policy and staffing.

First, 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. Second, hire for attitude, not talent. This strategy ensures a true competitive advanges over other airlines, because employees can be trained in skills and knowledge, but a helpful, friendly, and genuinely caring attitude can't be learned.

In last 30 years, Southwest Airlines' stock had increased and senior management had been changed, but their strategy to provide bettet customer service had never been changed.

The Development of Southwest Airlines

Founded by San Antonio lawyer, Herbert D. Kelleher with one of his clients, Rollin King (now a board member), over drinks at a local bar in 1966.

Since Fortune magazine began publishing its annual list of "The 100 Best Companies to Work For" in January 1998, Southwest has been one of the top five in each year. No other airline has cracked the top 10.

Corporate culture of Southwest Airlines, one of friendly atmosphere, has resulted in high productivity. The company likes to promote the family feeling by the recruitment strategy of hiring workers from the families of existing employees.

1998s record profit translated into a S120 million payment into the employees' profit share, giving, on average, an additional 13.7% payment to the workers. The fund accounts for 10% of the company's stock.

Continuous Improvement, Availability & Financial Strength

Southwest has grown to become the fifth-largest carrier in the US, in terms of passenger numbers. This is despite it being a completely domestic airline. Southwest owes much of its success to a very strong culture that motivates its employees and rewards them with generous profit sharing and stock option plans. The result has been continuous productivity and profits.

Southwests profitability has been positive during the last 30 years. The strong cash flows have enabled the airline to grow its fleet without external financing since 1996. 162 Boeing 737s are planned to be purchased through 2006 and more aircraft may have to be ordered. It was the only airline to post a profit after the September 11^th attack on U.S. civilians.

Cities across the country cry out to the carrier to enter their markets and airport managers want to bring Southwest's business to their airports.

"We have over 100 airports that want us because we offer something substantially different," says Wimberly. "We can increase traffic [at an airport] by between 300% and 400%, so it puts us in a position of great strength when we come to negotiate."

Southwest has the luxury of room for growth. Its been meeting its targets for growth up until September 11^th. It has also bucked the trend of the US majors by sustaining record profitability.

Southwest has perfected its turnaround times at airports to as little as 15 minutes, allowing the aircraft to be airborne for a large percentage of the day. Heres an example of an actual schedule:

2:45 p.m.: Team and ground crew prepare for arrival of Southwest airplane.

2:46 p.m.: Airplane is about to land. Luggage crew starts to head toward gate.

2:47 p.m.: Airplane comes to complete stop at gate. Baggage bin and fueler pull up to the aircraft.

2:48 p.m.: Passengers begin to deplane. Cleanup team restocks supplies, empty trash.

2:50 p.m.: First officer completes preflight check. Flight attendants reposition seatbelts and clean up cabin.

2:51 p.m.: All bags are off-loaded. Ramp agents begin to load bags for next group of passengers. New flight crew relieves current crew. Fueling is complete.

2:52 p.m.: Customers begin boarding.

3:01 p.m.: Door of aircraft is closed. Aircraft is maneuvered to tarmac towards runway for takeoff.