DOCSLIB.ORG

DO the RIGHT THING This Page Intentionally Left Blank DO the RIGHT THING

Total Page：16

File Type：pdf, Size：1020Kb

Download full-text PDF Read full-text
DO the RIGHT THING This Page Intentionally Left Blank DO the RIGHT THING DO THE RIGHT THING This page intentionally left blank DO THE RIGHT THING How Dedicated Employees Create Loyal Customers and Large Profits JAMES F. PARKER Vice President, Publisher: Tim Moore Associate Publisher and Director of Marketing: Amy Neidlinger Editor: Yoram (Jerry) Wind Acquisitions Editor: Jennifer Simon Editorial Assistant: Pamela Boland Development Editor: Russ Hall Digital Marketing Manager: Julie Phifer Marketing Coordinator: Megan Colvin Cover Designer: The Ingredient Managing Editor: Gina Kanouse Project Editor: Anne Goebel Copy Editor: Krista Hansing Editorial Services, Inc. Proofreader: Water Crest Publishing, Inc. Senior Indexer: Cheryl Lenser Compositor: Nonie Ratcliff Manufacturing Buyer: Dan Uhrig © 2008 by Pearson Education, Inc. Publishing as Prentice Hall Upper Saddle River, New Jersey 07458 Prentice Hall offers excellent discounts on this book when ordered in quanti- ty for bulk purchases or special sales. For more information, please contact U.S. Corporate and Government Sales, 1-800-382-3419, [email protected]. For sales out- side the U.S., please contact International Sales at [email protected]. Company and product names mentioned herein are the trademarks or registered trade- marks of their respective owners. All rights reserved. No part of this book may be reproduced, in any form or by any means, without permission in writing from the publisher. Printed in the United States of America Second Printing February 2008 ISBN-13: 978-0-13-234334-3 ISBN-10: 0-13-234334-7 Pearson Education LTD. Pearson Education Australia PTY, Limited. Pearson Education Singapore, Pte. Ltd. Pearson Education North Asia, Ltd. Pearson Education Canada, Ltd. Pearson Educatión de Mexico, S.A. de C.V. Pearson Education—Japan Pearson Education Malaysia, Pte. Ltd. Library of Congress Cataloging-in-Publication Data Parker, James F. (James Francis), 1947- Do the right thing : how dedicated employees create loyal customers and large profits / James F. Parker. p. cm. ISBN-13: 978-0-13-234334-3 (hardback : alk. paper) 1. Southwest Airlines Co.— Management. 2. Airlines—United States—Management 3. Customer relations—United States. 4. Customer services—United States. I. Title. HE9803.S68P37 2008 387.7068’3—dc22 2007018393 To my mom, who taught me, “You’ll catch more flies with honey than with vinegar.” And to my dad, who sat outside on the steps with the black soldiers who were not allowed to eat at the inside lunch counter during the long bus ride home to Texas after World War II. Thanks for teaching me to do the right thing. This page intentionally left blank Contents Acknowledgments . xi About the Author . xiii Introduction . 1 Chapter 1 Stumbling into the Business World . 5 Chapter 2 9/11 . 9 Chapter 3 The Question Was Answered… . 17 Chapter 4 …But I Don’t Want to Be a Corporate Bureaucrat . 29 Chapter 5 Getting Off the Ground . 33 Chapter 6 The Ten-Minute Turnaround . 39 Chapter 7 The Great Texas Whiskey War . 47 Chapter 8 I Just Couldn’t Resist . 53 Chapter 9 Some of the Obvious Things I Learned . 55 Chapter 10 We’re in What Kind of Business? . 65 Chapter 11 With a Little Help from Our Competitors… . 71 Chapter 12 Leaders Are Everywhere . 73 Chapter 13 Great Organizations Have Great Leaders at Every Level . 83 vii viii Do the Right Thing Chapter 14 In Case You Didn’t Get It… Great Organizations Have Great Leaders at Every Level . 89 Chapter 15 Great Leaders Make the People Around Them Better . 93 Chapter 16 People Recognize a Phony . 97 Chapter 17 People Follow a Leader They Trust . 101 Chapter 18 Who Wants the “Best” People? . 105 Chapter 19 Looking for the Right People . 109 Chapter 20 Interview for Attitude . 115 Chapter 21 Attitudes Also Matter at 30,000 Feet . 121 Chapter 22 Everybody Remembers Their Interview . 127 Chapter 23 Every Job Affects Others . 131 Chapter 24 People Need to Understand Their Mission . 135 Chapter 25 Shared Goals, Shared Knowledge, and Mutual Respect = A Shared Mission . 143 Chapter 26 Do People Think Like Employees or Owners? . 151 Chapter 27 Making Employees Owners . 155 Chapter 28 A Sense of Ownership . 163 Chapter 29 Make Work Fun . 169 Contents ix Chapter 30 Build a Customer Service Culture . 173 Chapter 31 Everything He Did Was So I Could Come to Work… . 177 Chapter 32 Fun Can Have a Purpose . 181 Chapter 33 Celebrate Success and Achievement . 187 Chapter 34 Creating Entrepreneurs . 189 Chapter 35 Encourage Unconventional Thinking . 197 Chapter 36 Suggestion Boxes . 207 Chapter 37 Many Roads Lead to the Promised Land . 209 Chapter 38 Define the Right Goals and Give People Room to Succeed . 215 Chapter 39 The Two-Minute Drill . 219 Chapter 40 Give People Something to Believe In—Define a Grand Mission . 225 Chapter 41 Create a Culture in Which People Want to Do the Right Things . 229 Chapter 42 It’s a Family Affair . 233 Chapter 43 The Tactics of Success May Vary, but the Principles Are Constant . 239 Chapter 44 Be Yourself and Have Some Fun . 247 Chapter 45 It’s a Round World . 251 Index . 255 This page intentionally left blank Acknowledgments hen people ask me what I am doing these days, since I retired as CEO of Southwest WAirlines, I like to tell them that I am trying to avoid work, and it is a full-time job. I guess writing a book should qualify as work, but thanks to the out- standing publishing team at Pearson Education, it was a labor of joy. I want to express my sincere appreciation to Senior Editor Jennifer Simon for her role in shepherding this first time author through the labyrinthine process of turning thoughts and stories into a book, to Development Editor Russ Hall for helping me find my own voice as an author, to Associate Publisher Amy Neidlinger for her insightful suggestions, and to Anne Goebel and Krista Hansing for their prompt and bene- ficial refinements of the manuscript. Special thanks go to Publisher Tim Moore, for believing that I had some- thing worthwhile to say, and to author Barry Rosenberg, who initially suggested that I might have a book in me. The book would not have been possible without the assistance of my longtime executive assistant, Marilyn Strickland, who understands the marvels of modern technology better than I ever will. Thanks for the week- ends and evenings you spent on this project, Marilyn. Thanks also to the two good friends who reviewed the manuscript and shared their insights and comments. Of course, I must also thank the people of Southwest Airlines, who started with a dream and turned it into an airline that changed the world. Thanks for being my inspiration, and for allowing me to be part of your team for 25 wonderful years. My greatest debt of gratitude goes to my wife and friend, Pat. Thank you for your patience, love, and strength—and for our two wonderful children, James and Jennifer. About the Author ames Parker is a lawyer by trade, having received Jboth his undergraduate and law degrees from The University of Texas. After serving as law clerk to a federal judge and as an assistant attorney general of Texas, Jim joined the San Antonio law firm of Oppenheimer, Rosenberg, Kelleher, and Wheatley. As luck would have it, one of the cofounders of that law firm, Herb Kelleher, also cofounded a small Texas air- line called Southwest, and Jim soon stumbled into the airline industry. After serving as outside counsel for Southwest for 7 years, Jim became General Counsel for 15 years and ultimately served as Southwest Airlines’ CEO for 3 years, including the period of the 9/11 terror- ist attack and its aftermath. During Jim’s tenure as CEO, Southwest was the only major airline to remain profitable after 9/11. It also became the largest domestic airline in the United States in terms of passenger enplanements, and its mar- ket capitalization (the value of its outstanding stock) exceeded that of all other U.S. airlines combined. Southwest was named as the most admired airline and one of the three most admired companies in America by Fortune magazine, Airline of the Year by Air Transport World magazine, and one of the World’s Most Socially Responsible Companies by Global Finance magazine. Jim was also named co-CEO of the Year in 2001 by Morningstar.com and was named to Institutional Investor’s list of Best CEOs in America in 2004. Jim’s proudest accomplishment, however, comes from the fact that Southwest Airlines was able to pro- tect the jobs of all of its employees, with no furloughs or pay cuts in the aftermath of 9/11, while also remain- ing profitable every year and, in fact, every quarter dur- ing his tenure as CEO. Jim is presently retired from the airline industry and serves on the board of directors of the successful Texas Roadhouse restaurant company. He also serves on the Advisory Council for the MIT Leadership Center. This is his first book. Introduction ost people have a passion for success and cre- ative self expression somewhere deep inside Mthem. They want to be part of something meaningful, to make a contribution, and to find fulfill- ment in what they do. Sadly, these yearnings are often managed out of people in the unrelenting quest for pre- dictable mediocrity that most organizations pursue. People are seldom encouraged to be themselves, have fun, or seek fulfillment in their jobs. Instead, they are pushed to just do their jobs, meet their quotas, and not make waves. Think outside the box? Proceed at your own peril. A lot of companies say their employees are their most important asset, but they don’t really mean it.
Load more

Recommended publications
  • Company Culture Drives Productivity
    COMPANY CULTURE DRIVES PRODUCTIVITY: A STUDY ON HOW COMPANY CULTURE IMPACTS THE BOTTOM LINE By Matthew Imaizumi Submitted in partial fulfillment of the Requirements for Departmental Honors in the Department of Entrepreneurial Management. Texas Christian University Fort Worth, Texas 8 May 2017 COMPANY CULTURE DRIVES PRODUCTIVITY: A STUDY ON HOW COMPANY CULTURE IMPACTS THE BOTTOM LINE Project Approved: Supervising Professor: Homer, Erekson, Ph. D. Department: Dean of Neeley School of Business Stacy, Grau, Ph. D. Department of Marketing ABSTRACT This study of company culture and its impact on the bottom line of an organization begins with an analysis of the Service Profit Chain. The Service Profit Chain is a management theory that develops a quantifiable set of relationships that directly link profit and revenue growth to not only customer loyalty and satisfaction, but to employee loyalty, satisfaction, and productivity (Heskett 1997). The crux of the theory rests on the ability of a company to create a culture and workplace that is designed to satisfy and empower employees to perform at their highest ability. This study then progresses into a case analysis of Southwest Airlines to show how a company can benefit financially by successfully creating a culture that empowers its employees and follows the model set forth by the Service Profit Chain. The heart of this study is to show that culture is not an aspect of a business that should be written off, but rather, a momentous factor that can lead to more satisfied and productive employees
    [Show full text]
  • Winning the Oil Endgame: Innovation for Profits, Jobs, and Security Oil Dependence
    “We’ve embarked on the beginning of the Last Days of the Age of Oil. Nations of the world that are striving to modernize will make choices different from the ones we have made. They will have to. And even today’s industrial powers will shift energy use patterns....[T]he market share for carbon-rich fuels will diminish, as the demand for other forms of energy grows. And energy companies have a choice: to embrace the future and recognize the growing demand for a wide array of fuels; or ignore reality, and slowly—but surely—be left behind.” —Mike Bowlin, Chairman and CEO, ARCO, and Chairman, American Petroleum Institute, 9 Feb. 1999 1 “My personal opinion is that we are at the peak of the oil age and at the same time the begin- ning of the hydrogen age. Anything else is an interim solution in my view. The transition will be very messy, and will take many and diverse competing technological paths, but the long- term future will be in hydrogen and fuel cells.” —Herman Kuipers, Business Team Manager, Innovation & Research, Shell Global Solutions, 1. Bowlin 1999. 21 Nov. 2000 2 2. Kuipers 2000. “The days of the traditional oil company are numbered, in part because of emerging technolo- gies such as fuel cells....” 3. Bijur, undated. — Peter I. Bijur, Chairman and CEO, Texaco, Inc., late 1990s 3 4. Ingriselli 2001. “Market forces, greenery, and innovation are shaping the future of our industry and propelling 5. Gibson-Smith 1998. us inexorably towards hydrogen energy. Those who don’t pursue it…will rue it.” — Frank Ingriselli, President, Texaco Technology 6.
    [Show full text]
  • Doing the Right Thing
    southwest cares Doing The Right Thing The 2008 Southwest Cares Report is dedicated to the Employees, Customers, Shareholders, and other Stakeholders of Southwest Airlines, who strive each and every day to do the right thing for Our Planet, Our Communities, Our People, and Our Suppliers. ABOUT THIS REPORT Gary Kelly: Chairman, President, and CEO oing the Right Thing. It’s not just a slogan at the stark bareness of the moon. Earth appears as a Southwest Airlines; it is our way of life. We welcoming lifeboat in the void of space. Doing the right Dpractice this concept in a million different ways, thing for our planet is not just “good business,” it is every day. Southwest is privileged to serve millions necessary for our survival. of Customers annually who have chosen to patronize It takes a lot of dedication, perseverance, and us with their hard-earned money. Southwest honors hard work to do the right thing for our Customers, our Customers’ patronage by doing the right thing for Employees, and Planet, and this report outlines them—providing Safe, comfortable, and reliable air our environmental efforts and our goals. We began transportation. Our Mission Statement puts it this operations in 1971 with a revolutionary idea that way: “The mission of Southwest Airlines is dedication everyone should be able to afford to fly instead of drive to the highest quality of Customer Service delivered and to enjoy the Safety, comfort, and convenience of with a sense of warmth, friendliness, individual pride, air travel. For the past 38 years, we have devoted and Company Spirit.” ourselves to meeting that goal.
    [Show full text]
  • Redalyc.Engineering and Strategy: Returning to the Case of Southwest
    Revista Escuela de Administración de Negocios ISSN: 0120-8160 [email protected] Universidad EAN Colombia Berrío Zapata, Cristian Engineering and strategy: returning to the case of southwest airlines, an analysis in production and technology management Revista Escuela de Administración de Negocios, núm. 73, julio-diciembre, 2012, pp. 209-217 Universidad EAN Bogóta, Colombia Available in: http://www.redalyc.org/articulo.oa?id=20625032013 How to cite Complete issue Scientific Information System More information about this article Network of Scientific Journals from Latin America, the Caribbean, Spain and Portugal Journal's homepage in redalyc.org Non-profit academic project, developed under the open access initiative Casos empresariales ENGINEERING AND STRATEGY: RETURNING TO THE CASE OF SOUTHWEST AIRLINES, AN ANALYSIS IN PRODUCTION AND TECHNOLOGY MANAGEMENT Cristian Berrío Zapata 1. INTRODUCTION ome company cases let us see what was a network that makes every part of it shake, when any done to produce business model innovation component is touched. This network, immersed into Sthat creates ruptures in the market, changing the environment evolution, is a complete systemic the rules of competition. One of these cases is the unit, where paradigm changes must be supported with story of Southwest Airlines (SWA). This article tries to operational actions so innovation becomes a living demonstrate that engineering operational excellence is force that changes competing profiles. This virtuous fruitless without a compatible moving in other conceptual cycle between thought and action, when successful axes like service, finances, administration and human in producing adaptative and innovative competing resources. The areas of a company are bounded into structures, revolves the markets and generates new rules for competition.
    [Show full text]
  • Download This PDF File
    leading from the middle “It’s in the DNA” Infusing Organizational Values at Southwest John Lubans Jr. Since writing my first Southwest Airlines (SWA) column— innovating, and providing the best customer service among “Southwest: The Un-stodgy Airline”—I’ve flown on SWA the surviving airlines—seemingly always a step ahead of several times a year.1 Doing so, I’ve gotten up close to the the competition. Other businesses, including airlines, have SWA culture in practice: how they treat people, how they sought to emulate the SWA model, but a successful replica- deliver their services, and how they deal with crises. I con- tion of the SWA way remains elusive. Why not simply hand tinue to marvel at how SWA stays ahead of its competition, out Southwest’s core values and, voila, there you have it? how it keeps fares affordable and still makes a profit, how Or is it more complicated than that? One clue is that for most of their flight attendants respond to full planes with Southwest’s top leadership, the SWA way is “a matter of good cheer and obvious interest in passengers. Whenever the heart” rather than something formulaic. Herb tells of I read “Colleen’s Corner,” Colleen Barrett’s in-flight maga- an executive who wanted to adopt the SWA way for his zine presidential column, I am impressed by her unclut- company, but discovered to his dismay that his new open- tered, undefensive style, and Employee focus. Yes, the word door policy had a downside. He told Herb, “People were is capitalized at SWA.
    [Show full text]
  • Bibliography.Doc
    BOOKS ABOUT SOUTHWEST AIRLINES Cohan, Peter S. Value Leadership. San Francisco: Jossey-Bass. 2003. Southwest Airlines is used as an example of hiring and promoting honest people. Hiring for values also contributes to its competitive advantage as well as combining fun with values. Davidson, Paul. Consumer Joe. New York: Broadway Books. 2003. Four letters from Southwest Airlines' Customer Relations department are included in this book of questions inspired by America's largest corporations. Freiberg, Kevin and Jackie. NUTS! Southwest Airlines’ Crazy Recipe for Business and Personal Success. Austin: Bard Press, Inc. 1996. The true tale of how the people of Southwest Airlines have created, nurtured and sustained a very special culture radically different from that of most other companies. Gittell, Jody. The Southwest Airlines Way: Using the Power of Relationships to Achieve High Performance. McGraw-Hill Trade. December 19, 2002. The key to Southwest Airlines' success is the high performance relationships based on shared goals, shared knowledge and mutual respect among all levels of management, employees, and suppliers. Goddard, Larry and David Brown. The Turbo Charged Company, Igniting Your Business To Soar Ahead of the Competition. The Parkland Group Inc. 1995. Southwest Airlines is featured prominently in this book that describes those companies that dramatically outperform their competitors and achieve superior returns for their stockholders. Harris Ph.D., Jim. Getting Employees to Fall in Love with Your Company. New York: AMACON, 1996. Mentions Herb Kelleher, Employee commitment, productivity, LUV, spirit, one of three best companies to work for. McConnell, Ben and Huba, Jackie. Creating Customer Evangelists. Wabash & Lake, Inc. 2002-2003.
    [Show full text]
  • A Tale of Two Airlines: a Comparative Case Study of High-Road Versus Low-Road Strategies in Customer Service and Reputation Management
    International Journal of Aviation, Aeronautics, and Aerospace Volume 6 Issue 2 Article 4 2019 A Tale of Two Airlines: A Comparative Case Study of High-Road versus Low-Road Strategies in Customer Service and Reputation Management Donna Roberts WW/Social Sciences & Economics, [email protected] John C. Griffith Embry-Riddle Aeronautical University, [email protected] Follow this and additional works at: https://commons.erau.edu/ijaaa Part of the Business Commons, and the Social and Behavioral Sciences Commons Scholarly Commons Citation Roberts, D., & Griffith, J. C. (2019). Aale T of Two Airlines: A Comparative Case Study of High-Road versus Low-Road Strategies in Customer Service and Reputation Management. International Journal of Aviation, Aeronautics, and Aerospace, 6(2). https://doi.org/10.15394/ijaaa.2019.1317 This Article is brought to you for free and open access by the Journals at Scholarly Commons. It has been accepted for inclusion in International Journal of Aviation, Aeronautics, and Aerospace by an authorized administrator of Scholarly Commons. For more information, please contact [email protected]. A Tale of Two Airlines: A Comparative Case Study of High-Road versus Low-Road Strategies in Customer Service and Reputation Management Cover Page Footnote We would like to acknowledge the support of Embry Riddle Aeronautical University for providing funding for travel and software in support of this research. This article is available in International Journal of Aviation, Aeronautics, and Aerospace: https://commons.erau.edu/ ijaaa/vol6/iss2/4 Roberts and Griffith: A Tale of Two Airlines: A Comparative Case Study of High-Road versus Low-Road Strategies in Customer Service and Reputation Management Introduction This research represents an in-depth comparative case study highlighting the differences in marketing strategies, and customer service models between American low-cost carrier Southwest Airlines and European low-cost carrier Ryanair.
    [Show full text]
  • LUV 2018 Annual Report.Pdf
    SOUTHWEST AIRLINES CO. 2018 ANNUAL REPORT TO SHAREHOLDERS To our Shareholders: I am very pleased to report another strong performance for 2018. Our 46th consecutive year of profitability is a record unmatched by any competitor in the U.S. airline industry. Despite challenges in first half 2018, our Southwest Warriors showed their fortitude and resilience, rallying in second half 2018, and finishing the year strong. Our 2018 net income was $2.5 billion, or $4.29 per diluted share. Excluding special items1, 2018 net income was a record $2.4 billion, and earnings per diluted share was a record $4.24. These earnings results translated to record operating cash flow of $4.9 billion; record free cash flow of $3.1 billion2; and record Shareholder returns of $2.3 billion. For the fifth year in a row, we produced stellar returns on invested capital, excluding special items1: in 2018 it was 23.6 percent, pre-tax, and 18.4 percent, after-tax, well in excess of our weighted average cost of capital. Total operating revenues were another record at $22.0 billion, up 3.9 percent, year-over-year. Available seat miles (ASMs, or capacity) also increased 3.9 percent, year-over-year, resulting in revenue per ASM (RASM, or unit revenue) comparable with 2017. This marks the second year in a row of stable unit revenues, compared with the declining RASM environment experienced in the preceding 24-month period. First half 2018 RASM decreased 1.6 percent, year-over-year, and was punctuated by the soft revenue performance following the Flight 1380 accident.
    [Show full text]
  • SOUTHWEST AIRLINES CO. FIVE SYMBOLS of FREEDOM TABLE of CONTENTS Consolidated Highlights
    SOUTHWEST AIRLINES CO. © FIVE SYMBOLS OF FREEDOM TABLE OF CONTENTS Consolidated Highlights ....................................................................................... 1 Preamble .............................................................................................................. 3 Letter to Shareholders.......................................................................................... 4 First Symbol of Freedom ...................................................................................... 6 Second Symbol of Freedom ................................................................................. 9 Third Symbol of Freedom ................................................................................... 12 Fourth Symbol of Freedom................................................................................. 15 Fifth Symbol of Freedom .................................................................................... 18 Future of Freedom.............................................................................................. 21 Destinations........................................................................................................ 24 Triple Crown One ............................................................................................... 25 Financial Review ................................................................................................ 26 Management’s Discussion and Analysis ............................................................ 26 Consolidated Financial
    [Show full text]
  • Trailblazer, Herb Kelleher, Co-Founder of Southwest Airlines, Dies at 87
    Trailblazer, Herb Kelleher, co-founder of Southwest Airlines, dies at 87 Herb Kelleher, who turned conventional airline industry wisdom on its head by combining low fares with high standards of customer service to build Southwest Airlines into one of the nation’s most successful and admired companies, died on Thursday. He was 87. The airline announced his death on Twitter. It did not say where he died or give a cause. Southwest is based in Dallas, and Mr. Kelleher had a home there. Photo: Courtesy Southwest Under the fun-loving, chain-smoking, hard-drinking, New Jersey-born Mr. Kelleher, Southwest, which began in 1971 as a low-fare intrastate carrier serving three Texas cities — Houston, Dallas and San Antonio — grew into the behemoth that today carries more than 120 million passengers a year, making it the nation’s most popular domestic airline. Southwest employs more than 58,000 people and has been profitable every year since two years after it was founded. During Mr. Kelleher’s tenure, the company never had a layoff, furlough or pay cut, despite being among the most unionized airlines in the world. His vision for the airline — one that reshaped the industry — centered on using more fuel-efficient, low-cost planes to reduce fares and challenging his employees to provide no-frills service without lowering standards. Robert Mann, an airline industry analyst and former executive, said that by eliminating onerous fees and unnecessary services and using secondary airports, like Love Field in Dallas, Southwest brought low prices to the market and stimulated demand for air travel.
    [Show full text]
  • On the Record: a Conversation with Herb Kelleher
    A Conversation with Herb Kelleher OnTheRecord Staying Aloft in Today’s Turbulent Skies Southwest Airlines executive chairman Herb Kelleher, a member of the Dallas Fed’s board A. All major U.S. airlines are now reducing of directors, gives a front-line executive’s view of the economy and the changes buffeting domestic seating capacity and/or paring back one of Texas’ most important industries. the rate of domestic expansion in response to weakening absolute demand across the nation. That’s part of why load factors right When asked about the secret to South- now are so great. So much capacity has been west Airlines’ success, Herb Kelleher jok- taken out. The players that had been growing ingly replies, “Charismatic leadership.” Be- fast are slowing down, and we have started yond that, being the only major U.S. airline to see some airlines cancel or delay plans to to make a profit every year since 1972 has add planes to their domestic fleets. come down to three factors: having a con- trarian strategy and sticking to it, keeping Q. How has the recent run-up in oil prices costs down in good times so the company affected the outlook? is prepared for the bad times and—perhaps most important—treating employees well A. Thanks to the globalization of business and trusting them to do their jobs. and the weakening dollar, the major inter- Kelleher joined with Rollin King to cre- national airlines reported good third quarter ate Southwest Airlines in 1967. After four earnings. But I suspect that the increase in jet years of legal challenges from existing car- fuel prices will translate into flattish to down riers, the fledgling airline finally began -op earnings for the industry as a whole for the erations in 1971 with a fleet of three Boe- fourth quarter.
    [Show full text]
  • Southwest Airlines Case Study
    GARRISON & KELLER MOVING YOU FORWARD 5567 Beechmont Avenue • Cincinnati, OH 45276 • (513) 998-3000 • [email protected] SOUTHWEST AIRLINES CASE STUDY I. COMPANY OVERVIEW Southwest Airlines Co. (“Southwest”) is a major U.S. airline that primarily provides short haul, high-frequency, point-to-point, low-fare service. Southwest was incorporated in Texas and commenced operations on June 18, 1971 with three Boeing 737 aircraft serving three Texas citiesDallas, Houston, and San Antonio. Today Southwest operates nearly 400 Boeing 737 aircraft to 59 U.S. cities. Southwest has the lowest operating cost structure in the domestic airline industry and consistently offers the lowest and simplest fares. Southwest also has one of the best overall customer service records. LUV is Southwest’s NYSE symbol, selected to represent the company’s home at Dallas Love Field, as well as the theme of Southwest’s employee and customer relationships (Southwest Airlines Investor Relations statement at www.southwest.com. 10/10/04). For fiscal 2003 Southwest Airlines achieved revenues totaling $5,937 million, an increase of 7.5% on 2002 revenues of $5,741 million. The company’s business is divided into three distinct areas: Passengers, Freight, and Other, which respectively accounted for 96.7%, 1.6%, and 1.7% of 2003 revenues (www.datamonitor.com, 10/10/04). II. CURRENT SITUATION A. Current Performance Overall, Southwest’s performance in recent years has been outstanding. The company’s ROI has been steadily increasing, and Southwest has consistently ranked first in market share in 80-90 percent of its top 100 city-pair routes. Its airline industry market share in 2000 was 9.4%.
    [Show full text]