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If you think commercial air
travel isn’t what it used to be then you haven’t flown Southwest Airlines.
Long distance travel was once a perk limited to the upper crust. The advent
of commercial airline travel has made it possible for virtually anyone to
get across the country or across the globe, for what is practically a
pittance. But somewhere along the way, most major carriers became too
complacent and just could not seem to keep it together. Enter Southwest
Airlines is a maverick company with a maverick CEO. Southwest Airlines is
breaking all kinds of records for affordable airfares, on time service, and
customer and employee loyalty. The airline manages these feats while also
also doing what seems to be the impossible for most other airlines, it's
profitable!
It has been over a year
since the September 11th attacks and our nation’s airline
industry has suffered huge losses in revenues because of them. Southwest
Airlines however, has been the only major U.S. carrier to post a profit,
with or without the federal grant, during the fourth quarter of 2001 and for
the full year of 2001. Southwest also happens to be the best U.S.
stock of the last thirty years as quoted in the 2002 fall issue of Money.
Jon Birger of Money says that since August 1972, Southwest has produced
annualized returns of 25.99%, which means that if you had invested $10,000
in Southwest thirty years ago, it would be worth a little over $10.2 million
today. Southwest Airlines has been able to consistently turnout profit the
last twenty-nine years because of their commitment to low fares through
innovations such as “ticketless” travel and online reservations, efficient
aircraft turnarounds, and excellent customer service.
Southwest was the first major airline to offer
system-wide “ticketless” travel. The way it works is when a reservation is
booked; the customer gets a receipt or an email confirmation for the
flight. All that is needed is a picture identification of the customer to
board the plane. Ticketless flights are far more flexible than ticketed
flights because in the event that the flight is cancelled or the customer
cannot make it to the flight, there will be a credit made in the purchaser’s
name that can be used as funds for a flight for the purchaser or it can be
used to issue a ticket to whomever the purchaser decides to give the tickets
out to -- for up to a year. The ticketed flights are not as flexible. The
credit from a flight in which the tickets were not used can be used for a
ticket that is issued only in the purchaser’s name -- for up to a year.
Southwest was also the first major airline to use an
efficient no-seat assignment boarding process that facilitates quick
turnarounds. In this manner, the planes can be in and out of the airport
faster than the other airlines that do not use the no-seat assignment
boarding process. Southwest planes are generally at the gate less than 25
minutes. The less the amount of time at the gates means less money that the
plane, their primary profit maker, is wasting at the gates. The planes are
up in the air earning money for the company.
Jeffrey Pfeffer, a Stanford professor who studies
organizational behavior, states in the fall 2002 issue of Money, “I used to
have my students go to the San Francisco airport to compare how long it
takes Southwest to turn around a plane vs. how long it takes a major airline
like United. It takes the majors more people and twice as long to turn
around the very same aircraft.” Furthermore, Southwest uses only one type
of airplane, the Boeing 737. Using only one type of airplane significantly
simplifies scheduling, operations, and maintenance, thus minimizing costs.
And lastly, Southwest was the first major airline to create its own homepage
on the Internet offering online booking. This expands the ways in which a
customer can obtain tickets, making it easier for customers to obtain
flights so that a customer can reserve a flight through a travel agency,
ticket agent at the airport, on the phone, or online. About 45% of the
company’s reservations are received over the Internet. This cuts costs by
having the customer directly ordering the tickets for themselves, instead of
having a ticket agent order the tickets for them. It also allows the
customer to compare prices of different flights that Southwest offers.
Customer service at Southwest is very important to
the employees and to the customers they serve, and my recent experience with
them shows that they care for their customers. Through an employee
stock-purchasing program, which was started in 1973, employees own about 13%
of the company’s stock. This enables the employee to feel that in a sense,
they are working for themselves. Whether just asking a question on the
phone with a Southwest representative, or help from a flight attendant,
Southwest employees’ customer service skills shine brilliantly compared to
other major airlines.
I scoped up one of Southwest Airlines great airfares
from Southern California to the Bay Area and took SWA on a test drive. As I
approached the gate agent at the start of my trip, I was greeted with a warm
smile and informed that they would start boarding passengers on the plane
soon. I don’t fly too often, and I usually don’t like flying on a plane,
because I get motion sickness. I suppose I had some anxiety about flying in
the wake of the terrorist attacks too. But when I entered the
Southwest plane, the warm smile and greeting from the flight attendant and
the comradely between the passengers and the flight crew helped me feel a
bit more relaxed.
I choose a seat (you get your choice) and settled in
for the flight. I don’t usually notice this but as the flight attendants
showed us our emergency oxygen masks, emergency exits and whatnot.
They made the mundane announcement many passengers ignore interesting and
they manner was professional and their attitude was reassuring. The second
we reached cruising altitude an attendant came over with a pad to take my
drink order. Then a few minutes later it was served to me. Rather than a
single snack packet I was encouraged to take as many as I wanted. They also
were more than happy to keep my drink refreshed until it was time to prepare
for final approach. The flight crew was busy the entire time serving the
passengers and they seem genuinely happy to be doing so. What I like about
the way they handle thing is there is no cart blocking your way so you can
get in and out of your seat without being trapped. Also they come through
the isles frequently to refill your drinks or collect refuse so that you
don’t end up stuck with trash on your tray or seat pocket for extended
periods.
I found the flight crew to be courteous, friendly,
and efficient. The flight did not seem to last that long and before I knew
it we had landed in San Jose. At that time, the flight attendants let us
out of the cabin and wished us a pleasant stay in San Jose.
That is one more reason Southwest does well: the
deliver efficient service with a smile. Those were just some of the reason
Southwest does so well compared to its competitors, but one may stop and
wonder how did Southwest get to where it is now? Southwest started as an
idea on a cocktail napkin between herb Kelleher, an attorney, and Rollin
King, a businessman. It started off with a three-plane fleet and was
inaugurated on June 18, 1971 with flights to Houston, Dallas, and San
Antonio. The creation of Southwest Airlines officially created the low-fare
category in the airline industry. Within three years, Southwest was
operating profitably and carried their millionth customer. Today Southwest
is the fourth largest airline in the United States (in terms of domestic
customers carried). And in the aftermath of the terrorist attack, Southwest
is still continuing its growth in the east; it now flies to 59 airports in
30 states from coast to coast and border to border.
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About
the Author
Sherwin
Keak writes about snow and water sports, travel, and dining when he is
not studying social ecology and communications at the University of
California, Irvine. Sherwin is on the swim team and is an avid polo player
and alpine skier. Although English is his first language, Sherwin is also
fluent in Fukienese Chinese, and Tagalog. He doesn't have much free time
because of school and work, so when he does have some free time he makes the
best use of it he can. You can reach Sherwin at:
sherwin@travel-watch.com.
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