Southwest Risks Keep-It-Simple Focus to Spur Growth September 28, 2010, 8:50 AM EDT More From Businessweek

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By Mary Schlangenstein and John Hughes (Updates with overseas flights in eighth paragraph.) Sept. 28 (Bloomberg) -- Southwest Airlines Co. Chief Executive Officer Gary Kelly, taking on his biggest acquisition ever, is dismantling the carriers keep-it-simple strategy in a bid to reignite growth. The largest U.S. low-fare carriers decision to buy AirTran Holdings Inc. for $1.4 billion will mark its first foray into a second jet type and its first boost in seating capacity since the end of 2008. Southwest will also face off with bigger Delta Air Lines Inc. at its primary hub of Atlanta, the worlds busiest airport and the only major U.S. city Southwest doesnt serve. The Dallas-based carrier will start flying at Washingtons Reagan National, add its first international flights and mesh 8,000 employees into its workforce. They ran out of places where they could keep it simple, David Swierenga, president of consultant AeroEcon in Round Rock, Texas. Theyve become such a widespread, far-flung airline and served just about every city that met that simple requirement. They figured it was time to go beyond that. With the cash-and-stock purchase, Kelly gives up some of the last vestiges of Southwests historic low-cost strategy, including flying just one fleet type, Boeing Co. 737s, to hold down maintenance and training costs, making short hops between cities at high frequencies and owning most of its jets.

More Seats The deal will add 138 planes, ending Southwests self- imposed capacity ceiling that began at the end of 2008 and became the longest dormant period in 20 years. The combined company is to have 685 aircraft, including 86 Boeing 717s from AirTran. Southwests 737s can carry at least 122 passengers, while AirTrans 717s have 117 seats. Growth is in Southwests DNA, and the growth pause of the last several years has not been a naturally comfortable place for the company, said Douglas Runte, managing director at Piper Jaffray & Co. in New York. The addition of AirTran will allow them to satisfy their briefly dormant, but always present, inclination for growth. AirTran flies to Cancun, Mexico, and the Caribbean, giving Southwest the perfect opportunity to add flights outside the U.S. for the first time, Kelly said yesterday at a news conference at Southwests headquarters. Southwests offer values Orlando, Florida-based AirTran at $7.69 a share, including its convertible notes. Thats 69 percent more than the carriers closing price on Sept. 24. Southwest rose $1.07, or 8.7 percent, to $13.35 in New York Stock Exchange composite trading yesterday, while AirTran jumped $2.79, or 61 percent, to $7.34. Merger Terms Under the merger agreement, each of AirTrans common shares will be exchanged for $3.75 in cash and 0.321 share of Southwest common stock. Including AirTran debt and capitalized aircraft operating leases, the transaction has a value of about $3.4 billion, the airlines said. AirTrans debt as of June 30 included about $280 million in convertible notes, according to a July regulatory filing. Southwest will take on about $2 billion of AirTrans aircraft operating leases, according to the Standard & Poors ratings company. Southwest will partially fund the purchase with $670 million from cash on hand. The carrier currently has $3.3 billion in cash and short-term investments, and an available $600 million revolving credit line, it said yesterday. The acquisition will add $2 billion a year in revenue and $400 million in cost and revenue synergies, the companies said. Growth Opportunity We have evolved our company to be able to take on a growth opportunity like this, Kelly said. Our own growth prospects near-term are quite modest.

The merger must be approved by AirTran shareholders and the Justice Department. The U.S. clearance is not a slam dunk, said Vaughn Cordle, managing partner of AirlineForecasts LLC in Clifton, Virginia. The two carriers overlap on 32 markets, more than twice as many as in the pending merger between UAL Corp.s United Airlines and Continental Airlines Inc., Cordle said in an interview. The Justice Department will analyze direct service on a route-by-route basis to determine whether the merger leaves too few competitors in any individual market, said Steve Martin, a senior vice president at InterVistas Consulting in Washington. Buffalo, New York-Orlando; Baltimore-Orlando and Baltimore-Las Vegas are among routes that will come under scrutiny, he said. Acquisition History Southwest, which started flying in 1971, has made two previous acquisitions: Morris Air in 1993 for $134 million in stock and Muse Air in 1985 for $60.5 million in stock and cash. AirTran, founded in 1993, formerly was called ValuJet. Southwest failed in a 2009 bid to acquire Frontier Airlines out of bankruptcy. Frontier, based in Denver, was then acquired by Republic Airways Holdings Inc. While Southwest hasnt suffered annual losses that ravaged competitors such as American Airlines parent AMR Corp. and UAL, it posted net losses in four of the past eight quarters. The carriers third-quarter loss in 2008 was its first in 17 years. In the 12 months ended Sept. 24, the shares jumped 29 percent, the sixth-best performance among the 12 carriers in the Bloomberg U.S. Airlines Index. UAL more than doubled in the period, and US Airways Group Inc. and Alaska Air Group Inc. each surged 83 percent. Pilots, Attendants Southwest told employees yesterday it would add as many as 200 pilots and 300 flight attendants next year, in addition to AirTran employees. Combined, the companies would have about 42,700 employees, based on second-quarter data. Southwests unions will negotiate with AirTrans unions on how to mesh their seniority lists. There will have to be representation elections and contract negotiations with the carrier because the airlines major work groups belong to different unions. Based on miles flown by paying passengers, Southwest now ranks as the fifth-largest U.S. carrier, while AirTran is eighth. The merged carrier will be No. 4 after United and Continental combine.

Southwest plans to use AirTrans base in Atlanta and its flight slots at Reagan National to build on its strategy of attracting more business travelers. A blended Southwest and AirTran will account for 69 percent of flights at Baltimore- Washington International. LaGuardia, Newark The airline also will gain additional flight slots at New Yorks LaGuardia Airport with AirTran. Southwest agreed last month to lease flight space from Continental and United Airlines, which plan to complete their merger this week, at Newarks Liberty International airport. Southwest has, until recently, avoided serving congested Northeast airports, said Alan Bender, professor of aeronautics at Embry-Riddle Aeronautical University in Daytona Beach, Florida. This is a major entry into those markets. Southwest is saying it is no longer the airline of ma and pa -- we are going to become the airline of the business person. While Southwest flies into several airports that serve as hubs for rival airlines connecting flights, it hasnt yet come up against the dominant position that Delta holds in Atlanta with 75 percent of passengers. In Los Angeles, American Airlines has 16 percent of passengers, compared with 12 percent for Southwest. In Denver, United has 32 percent of passengers, compared with 15 percent for Southwest, and in San Francisco, United has 34 percent, while Southwest has 8 percent, according to the U.S. Bureau of Transportation Statistics. Greater Appeal We want to have greater appeal to more customers nationwide, Kelly said. The gaping hole in our route system right now is Atlanta. There is no easy way for us to get into Atlanta. We can start day one profitably and go from there. Southwest plans to extend its policy of not charging for the first two checked bags to AirTran, as well as its offer of a single class of service on aircraft. The combined carrier, which will remain based in Dallas, wont assign seats. The deal allows Southwest to eliminate AirTran, the second- biggest discounter, as a competitor and increase pressure on rivals JetBlue Airways Corp., Frontier and Virgin America Inc. Its certainly going to change the competitive dynamics of the low-cost sector, said Paul Mifsud, a Washington consultant and former airline executive. They are going to become an extremely big competitive force in the domestic industry. --With assistance from Mary Jane Credeur in Atlanta, Thomas Black in Monterrey, Will Daley in New York and Sara Forden in Washington. Editors: Andrea Snyder, Ed Dufner To contact the reporter on this story: Mary Schlangenstein in Dallas at maryc.s@bloomberg.net; John Hughes in Washington jhughes5@bloomberg.net

To contact the editor responsible for this story: Ed Dufner at edufner@bloomberg.net.

Southwest Airlines' Seven Secrets for Success

By Joe Brancatelli, Portfolio.com 07.08.08

News from Portfolio.com

Also on Portfolio Parsing Yahoo: We Find Rejection Very Attractive It's a Hypercompetitive World After All Manage Your Energy, Not Your Time Subscribe to Portfolio magazine What's the airline-industry jargon for unconventional wisdom? Southwest Airlines. By some estimates, the country's major carriers have consumed perhaps $100 billion in capital during the past decade, but Southwest Airlines continues to be profitable. It's been in the black for 33 consecutive years and, last week, for the 127th consecutive quarter, it paid a modest dividend. Its balance sheet, with about $3 billion in cash on hand and $600 million in available credit, is the envy of an otherwise fuel-price-ravaged industry. Its competitors among the network carriersAmerican, United, Delta, Continental, Northwest and US Airwaysare shrinking passenger capacity by more than 10 percent and grounding hundreds of aircraft starting in the fall. Southwest will add a handful of daily flights. It will take delivery of another dozen aircraft next year and still plans to grow by 2 to 3 percent. And Southwest now carries more passengers annually (101 million last year) than any other U.S. carrier, a nifty trick for an airline that didn't fly outside Texas at the dawn of deregulation in 1978. Even the fickle financial markets, which have long discounted Southwest's relentless growth and steady profits, have finally taken note. As oil prices doubled in the past year, share prices of the six network carriers have slid, with the drop-offs ranging from 76 to 94 percent. Southwest's decline has been more modest, within a point of the Dow's 21 percent 52-week drop. As a result, Southwest's market capitalization yesterday (about $9.7 billion) is now more than the combined $5.7 billion market cap of its Big Six competitors.

What does Southwest know that no one else in airlines does? It keeps things simple and consistent, which drives costs down, maximizes productive assets, and helps manage customer expectations. One Plane Fits All Unlike the network carriers and their commuter surrogates, which operate all manner of regional jets, turboprops, and narrow-body and wide-body aircraft, Southwest flies just one plane type, the Boeing 737 series. That saves Southwest millions in maintenance costsspare-parts inventories, mechanic training and other nuts-and-bolts airline issues. It also gives the airline unique flexibility to move its 527 aircraft throughout the route network without costly disruptions and reconfigurations. Point-to-Point Flying Network carriers rely on a hub-and-spoke system, which laboriously collects passengers from "spoke" cities, flies them to a central "hub" airport, and then redistributes them to other spokes. Not Southwest. Most of its flying is nonstop between two points. That minimizes the time that planes sit on the ground at crowded, delay-prone hubs and allows the average Southwest aircraft to be in the air for more than an hour longer each day than a similarly sized jet flown by a network carrier. Southwest's avoid-the-hubs strategy also pays dividends in on-time operations. According to FlightStats, Southwest's 78 percent ontime performance in June is eight percentage points higher than the industry average and higher than that of any of its major competitors. Simple In-Flight Service Business travelers haven't always loved Southwest's ber-simple service, but it's looking better and better as competitors cut back. There is just one class of service, a decent coach cabin that is slightly more spacious than those of Southwest's competitors. There are no assigned seats. There have never been meals, just beverages and snacks. Keeping it basic allows Southwest to unload a flight, clean and restock the plane, and board another flight full of passengers in as little as 20 minutes compared with as much as 90 minutes on a network airline. Airline efficiency experts say that the savings allow each Southwest jet to fly an extra flight per day. Extra flights mean extra revenue. No Frills, No Fees As other carriers have rushed to remove perks and pile on fees and restrictions, Southwest has kept its customer proposition streamlined and transparent. The airline only sells one-way fares and only in a few price "buckets." That not only keeps costs downcomplex fare structures are expensive to manageit convinces fliers that they are getting value for money. Prices are all-inclusive too. Southwest doesn't have fuel surcharges, doesn't charge for standby travel or ticket changes, and continues to permit travelers to check two pieces of luggage free. And since every seat on every flight is virtually identical, travelers know exactly what they will get when they make a purchase.

Strong Management The public face of Southwest Airlines for a generation, hard-drinking, chain-smoking, always-leave-'em laughing Herb Kelleher, finally stepped away from the carrier earlier this year. Kelleher's bonhomie masked the discipline that Southwest has had throughout its history. The airline has always avoided fads and eschewed anything that increased costs or complicated the basic travel proposition. When it has changedlast year it ended its infamous cattle-call boarding process to favor its most frequent fliers and highest-fare customersit has done so without slowing down the movement of aircraft. Management ranks are lean, but well compensated and, most importantly, productive. I once calculated that the top executives of Southwest generated 10 times more revenue per dollar of compensation than did the C-suite types at some of the network carriers. A Relatively Happy Workforce Network carriers have railed for decades about the power of their employee unions. But guess who's the most unionized carrier in the nation? Southwest, of course. The airline says that 87 percent of its employees belong to a union. Southwest has never had a strike, and now that the network carriers have whacked away at salaries and benefits, Southwest staffers are generally the highest paid in the industry. But since Southwest has about 30 percent fewer employees per aircraft than its network competitors, it has the lowest non-fuel C.A.S.M. (cost per available seat mile) of any of the major carriers. Aggressive Fuel Hedging Rampaging fuel prices now represent around 40 percent of an airline's costs, but, as usual, Southwest Airlines has been ahead of the curve. Since 1999, the airline's aggressive fuel-hedging program has saved it an estimated $3.5 billion. In the first quarter, for example, it paid $1.98 a gallon for fuel, approximately a dollar less than its network competitors. And Southwest's future position is admirable: It is 70 percent hedged at $51 a barrel through the end of the year and 55 percent hedged at the same price next year. In a world of $140-a-barrel oil, suggesting that any airline is a guaranteed winner is beyond hubris. But this much can be said: Southwest Airlines is sitting on a pile of cash and fuel hedges and has a proven and easily adaptable service model. And history shows that Southwest has comfortably survived every airline-industry downturn, then grown rapidly and profited hugely when the business cycle turns. The Fine Print British Airways announced last week that it would buy L'Avion, the French carrier that flies all-businessclass jets between Newark and Paris. B.A. says that it will integrate L'Avion with its own boutique carrier, OpenSkies, which launched last month. L'Avion was the last of the four independent all-business-class trans-Atlantic carriers that have launched since 2005. The othersMaxjet, Eos, and Silverjetall folded in the past seven months.

Southwest Airlines
From Wikipedia, the free encyclopedia Jump to: navigation, search This article is about the United States-based airline. For the Japanese airline formerly named Southwest Air Lines, see Japan Transocean Air. For the British airline, see Air Southwest. For the defunct Chinese airline, see China Southwest Airlines. For the defunct United States-based airlines, see Pacific Southwest Airlines and Southwest Airways
Coordinates: 325048N 965140W32.846666666667N 96.861W

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Southwest Airlines

IATA WN

ICAO SWA

Callsign SOUTHWEST

Founded

March 16, 1967 Dallas, Texas, U.S.

Commenced operations AOC #

June 18, 1971

SWAA304A

List of Focus Cities[show]

Focus cities

Frequent-flyer program Fleet size Destinations

Rapid Rewards

547 (+133 Orders) 72 "A Symbol of Freedom"[citation

needed]

Company slogan

Headquarters

Dallas, Texas, U.S.

List of Key People[show]

Key people

Revenue Operating income Net income Total assets Total equity Website

US$10,350 million (FY 2009)[1] US$262 million (FY 2009)[1] US$99 million (FY 2009)[1] US$14,269 million (FY 2009)[1] US$5,466 million (FY 2009)[1] southwest.com

Southwest Airlines Co. (NYSE: LUV) is an American airline based in Dallas, Texas. Southwest is the largest airline in the United States, based on domestic passengers carried, as of June 30, 2010.[2] Southwest operates more than 3,100 flights a day, as of January 2011, utilizing a fleet of 547 Boeing 737 aircraft.[3]

Southwest is known throughout the aviation industry as a "low-cost carrier" because of its unique business model. The model includes flying one aircraft type, the Boeing 737, on high-density routes throughout the United States. Southwest's "low-cost" business model is further defined by the airline not offering many services, which are a standard offering on most traditional American carriers, such as a First Class cabin, airport lounges, reserved seat assignments, and video/audio programing. By not offering these services, Southwest claims that it can offer lower fares and produce a higher return on invested capital than other airline companies.[3] On September 27, 2010, Southwest Airlines announced it would acquire AirTran Airways.[4] Contents
[hide]

1 History o 1.1 Foundation o 1.2 Legal action by competitors o 1.3 First revenue flights o 1.4 Name change o 1.5 Early corporate culture o 1.6 Early losses and financial troubles o 1.7 Wright Amendment 2 Operations o 2.1 Employment 2.1.1 Organized labor o 2.2 Acquisitions 2.2.1 Muse Air - acquired 1985, divested 1987 2.2.2 Morris Air - acquired 1993 2.2.3 ATA Airlines - acquired 2008 2.2.4 AirTran Airways - acquisition pending o 2.3 Failed acquisitions 2.3.1 Frontier Airlines - 2009 o 2.4 Jet engine pressure-washing o 2.5 Internet presence o 2.6 Safety violations o 2.7 Headquarters o 2.8 Risk management 3 Corporate affairs and identity o 3.1 Organizational culture o 3.2 Advertising 3.2.1 "Just Plane Smart" o 3.3 Corporate reporting o 3.4 Southwest Effect o 3.5 Lobbying o 3.6 Awards and recognitions 4 Destinations o 4.1 Current service

o o o

4.2 Top served cities 4.3 Newest Service 4.4 International service 4.4.1 ATA Airlines codeshare 4.4.2 WestJet codeshare 4.4.3 Volaris codeshare 4.5 Codeshare agreements

5 Fleet 5.1 Current fleet 5.1.1 Fleet age and utilization 5.1.2 Seat pitch and width o 5.2 Retired fleet o 5.3 Livery 5.3.1 Original livery 5.3.2 Special Liveries 6 Products and Services o 6.1 Southwest experience o 6.2 In Flight Wi-Fi 7 Frequent-flyer program o 7.1 Rapid Rewards program description 7.1.1 Points earned with partners 7.1.2 Online booking bonus 7.1.3 Blackouts and capacity controls 7.1.4 Code share flight credits 8 Incidents and accidents 9 See also 10 References 11 External links
o

[edit] History
[edit] Foundation

A Southwest Airlines Boeing 737-300 landing at McCarran International Airport pictured in the company's current Canyon Blue livery.

Southwest Airlines traces its roots to the March 15, 1967 incorporation of Air Southwest Co. by Rollin King and Herb Kelleher.[5][6]
[edit] Legal action by competitors

Some of the incumbent airlines of the time (Braniff, Aloha Airlines, United Airlines, TransTexas, and Continental Airlines) initiated legal action, and thus began a three-year legal battle to keep Air Southwest on the ground. Air Southwest eventually prevailed in 1970 when the Texas Supreme Court upheld Air Southwests right to fly in Texas.[7] The decision became final on December 7, 1970, when the U.S. Supreme Court declined to review the case without comment.[8] The story of Southwests legal fight was turned into a childrens book, Gumwrappers and Goggles by Winifred Barnum in 1983. In the story, TJ Love, a small jet, is taken to court by two larger jets to keep him from their hangar, and then to try and stop him from flying at all. Taken to court, TJ Loves right to fly is upheld after an impassioned plea from The Lawyer. While no company names are mentioned in the book, TJ Loves colors are those of Southwest Airlines, and the two other jets are colored in Braniff and Continentals colors. The Lawyer is designed to resemble Herb Kelleher. The book was adapted into a stage musical, Show Your Spirit, sponsored by Southwest Airlines, and played only in towns serviced by the airline.[9]
[edit] First revenue flights

Operating from its Dallas, Texas headquarters, Air Southwest began customer service on June 18, 1971, offering service to the Texas cities of Houston, Dallas and San Antonio using three Boeing 737 aircraft.[3]
[edit] Name change

On March 29, 1971, Air Southwest Co. changed its name to Southwest Airlines Co..[6]
[edit] Early corporate culture

A 737-700 (N648SW) pictured in Southwest's original desert gold livery.

Southwest Airlines founder Herb Kelleher studied California-based Pacific Southwest Airlines extensively and used many of the airlines ideas to form the corporate culture at Southwest, and even on early flights used the same "Long Legs And Short Nights" theme for stewardesses on board typical Southwest Airlines flights. The original flight attendants that worked for Southwest Airlines were chosen by a committee of individuals that included the same person who had selected hostess for Hugh Hefners Playboy jet. The selection resulted in a group of female flight attendants that were described as long-legged dancers, majorettes, and cheerleaders with "unique personalities". Southwest Airlines and Herb Kelleher proceeded to dress these individuals in hot pants and go-go boots.[10]
[edit] Early losses and financial troubles

The rest of 1971 and 1972 saw operating losses. One of the four aircraft was sold to Frontier Airlines and the proceeds used to make payroll and cover other expenses. Southwest continued to operate a schedule predicated on four aircraft but using only three, and in so doing the "ten minute turn" was born, and was the standard ground time for many years.[11]
[edit] Wright Amendment Main article: Wright Amendment

When airline deregulation came in 1978, Southwest began planning to offer interstate service from Love Field. This caused a number of interest groups affiliated with Dallas-Ft. Worth Airport, including the city of Fort Worth, to push the Wright Amendment through Congress to restrict such flights.[12] Under the restrictions of the amendment, Southwest, and all other airlines, were barred from operating, or even ticketing passengers on flights from Love Field to destinations beyond the states immediately surrounding Texas. In effect, to travel through Love Field, a passenger and luggage would have to deplane and fly on a separate ticket, on a separate aircraft.[citation needed] The Wright Amendments restrictions did not apply to aircraft configured with 56 or fewer seats. In 2000, Legend Airlines attempted to operate long distance business-class flights using older DC-9s with 56 seats, but did not have the resources to survive Americans legal and marketing attacks, and quickly ceased operations. Southwest did not use the 56 seat loophole, even with its market strength at Love Field and the availability of more modern regional jets such as the CRJ700/900 and the Embraer ERJ 145 family.[citation needed]

A 737-700 (N235WN) takes the skies above San Jose, California. Complete elimination of the Wright Amendment will allow non-stop service from Dallas Love Field to all U.S. airports.

Southwests efforts to repeal or even alter the Wright Amendment were met with opposition from American Airlines and Dallas Ft. Worth International Airport. Both American Airlines and DFW contended that repeal of the Wright Amendment restrictions would cripple DFW,[13] while Southwest contended that repeal of the Wright Amendment would be beneficial to both Love Field and DFW.[citation needed] Continental Airlines has a successful hub and spoke operation at Houston Bush Intercontinental Airport despite unrestricted competition from Southwest at Houston Hobby Airport.[citation needed] In 1990 the airline registered its aircraft in Houston so it could pay aircraft taxes in Houston, even though the actual corporate headquarters were in Dallas. Southwest was not physically relocating any assets, but Texas state law allowed the airline to choose either Dallas or Houston as the city of registry of its aircraft.[14] In 1997, Southwests efforts began to pay off with the Shelby Amendment, which added the states of Alabama, Mississippi and Kansas to the list of permissible destination states. Southwest began offering non-stop service between Dallas Love Field and Birmingham, Alabama, which it could not do prior to the enactment of the Shelby Amendment.[citation needed] In late 2004, Southwest began actively seeking the full repeal of the Wright Amendment restrictions. In late 2005, Missouri was added to the list of permissible destination states via a transportation appropriations bill. New service from Love Field to St. Louis and Kansas City quickly started in December 2005.[citation needed] At a June 15, 2006 joint press conference held by the city of Dallas, the city of Ft. Worth, DallasFt. Worth Airport, American Airlines, and Southwest Airlines, the said parties announced a tentative agreement on how the Wright Amendment was to be phased out. Both the U.S. Senate and House of Representatives passed Wright-related legislation on September 29, 2006, and it was signed into law by President George W. Bush on October 13, 2006. The new law became effective on October 16, 2006, when the FAA Administrator notified Congress that any new aviation operations occurring as a result of the new law could be accommodated without adverse effect to the airspace.[citation needed]
Wikinews has related news: Southwest Airlines flight skids off runway at Chicago's Midway

Southwest started selling tickets under the new law on October 19, 2006. Highlights of the agreement are the immediate elimination of through-ticketing prohibitions, and unrestricted flights to domestic destinations eight years after the legislation takes effect. Because of the agreement, nationwide service became possible for Southwest; the law also defined the maximum number of gates at Love Field. Southwest controls all of the Love Field gates except for four gates controlled by American Airlines, Continental Airlines, and Delta Air Lines. The

future of the Legend Airlines terminal for use by commercial airlines is in doubt because of the limit on number of gates.[citation needed] Southwest remains the dominant passenger airline at Love Field, maintains its headquarters, hangars, training centers, and flight simulators adjacent thereto, and reflects its ties to Love Field in its ticker symbol (LUV). [edit] Operations
[edit] Employment

The President and CEO of Southwest is Gary C. Kelly. Gary replaced former CEO Jim Parker on July 15, 2004 and assumed the title of "President" after replacing Colleen Barrett on July 15, 2008.

A Southwest Airlines Boeing 737 prepares for its next flight at Bob Hope Airport in Burbank, California.

Former CEO Jim Parker led Southwest since mid-2001, keeping alive Southwest's unprecedented streak of profitability and guiding its growth as it became the largest commercial carrier in the domestic United States. Jim Parker abruptly quit as CEO and vice chairman for "personal reasons" though it's suspected that he stepped down after failing to reach an agreement with the flight attendant union, TWU Local 556, which made their labor strife (and displeasure with the Southwest CEO) public.

Southwest's CFO is Laura Wright. In July 2007, Herb Kelleher resigned his position as Chairman. Colleen Barrett left her post on the Board of Directors and Corporate Secretary in May 2008 and President in July 2008. Both are still active employees of Southwest Airlines. Southwest hired its first black pilot, Louis Freeman, in 1980. In 1992, he was named the first black chief pilot of any major U.S. airline.[15] [edit] Organized labor Although Southwest is considered a "low fare" airline, it is heavily unionized when compared to other airlines.[16] The Southwest Airline Pilots' Association, a union not affiliated with the Air Line Pilots Association, International, represents the airline's pilots.[17] The Aircraft Maintenance Technicians' are represented by the Aircraft Mechanics Fraternal Association (AMFA).[18] Customer Service Agents and Reservation Agents are represented by the International Association of Machinists and Aerospace Workers Union (IAM). Flight Dispatchers, Flight Attendants, Ramp agents and Operations agents are represented by the Transport Workers Union (TWU).
[edit] Acquisitions

Acquiring other airlines has helped Southwest grow its revenue base. Southwest has completed three acquisitions and plans to complete a fourth in 2011. [edit] Muse Air - acquired 1985, divested 1987 Southwest paid US$60.5 million in stock and cash for Muse Air when Muse was on the verge of collapse in 1985. Southwest renamed MuseAir TranStar Airlines, made TranStar a whollyowned subsidiary of Southwest and operated TranStar as an independent airline. Unwilling to compete in a fare war against Frank Lorenzo's Texas Air, Southwest sold TransStar's assets to Frank Lorenzo in August 1987.[19][20] [edit] Morris Air - acquired 1993 Southwest paid US$134 in stock in December, 1993 to acquire Morris Air, a competing airline based in Salt Lake City, Utah, allowing Southwest to expand service into the Pacific Northwest.[21][22] After completing the purchase, Southwest absorbed the capital and routes of Morris Air into Southwest's inventory and service. One founder of Morris Air, David Neeleman, worked with Southwest for a short period before leaving to found JetBlue Airways, a competing airline.[23] [edit] ATA Airlines - acquired 2008 Southwest paid US$7.5 million to acquire certain assets from bankrupt ATA Airlines in 2008. Southwest's primary reason for making the purchase was to acquire the operating certificate and New York LaGuardia Airport landing slots formerly controlled by ATA. The purchase did not not include any aircraft, facilities or employees of ATA.[24]

[edit] AirTran Airways - acquisition pending

Wikinews has related news: Southwest Airlines to purchase AirTran Airways for US$1.4 billion

On Monday, September 27, 2010, Southwest Airlines announced it plans to acquire Orlandobased AirTran Holdings, Inc., the parent company of AirTran Airways, for a total cost to Southwest of US$1.4 billion. The purchase will expand Southwest's service to 38 additional destinations including Atlanta, an AirTran hub and the largest U.S. city not currently served by Southwest, Mexico and the Caribbean.[25] Although Southwest has previously operated only Boeing 737 series aircraft, Southwest plans to integrate AirTran's fleet of both Boeing 737-700 and 717-200 aircraft. Southwest plans to complete the acquisition by the second quarter of 2011. Until the merger is complete each carrier will continue to operate separately.[19][26][27]
[edit] Failed acquisitions

In its attempts to grow revenues through acquisitions, Southwest has not always succeeded. [edit] Frontier Airlines - 2009 On July 30, 2009, Southwest Airlines announced a $113.6 million bid for bankrupt Frontier Airlines Holdings, the parent company of Frontier Airlines. Southwest planned to initially operate Frontier as a stand-alone carrier, eventually absorbing the airline and replacing Frontier's aircraft with Boeing 737s.[28] Less than one month after submitting its bid, Southwest learned on August 14 that it had lost the bidding to Republic Airways Holdings. Industry experts had expected Southwest to win the bidding, allowing Southwest to grow its presence in Denver and serve international destinations. Southwest stated that its requirement for pilots' unions at both companies to reach an agreement as a condition of acquisition was a key factor in losing the bid.[29]
[edit] Jet engine pressure-washing

In 2008, Southwest contracted with Pratt and Whitney to supply the proprietary Ecopower water pressure-washing system, which allows Southwest to clean grime and contaminants off engine turbine blades while the aircraft is parked at the gate. Frequent use of the Ecopower system is estimated to improve fuel efficiency by about 1.9%.[30][31]
[edit] Internet presence

On March 16, 1995, Southwest became one of the first airlines to have a website. Originally called the "Southwest Airlines Home Gate", passengers could view schedules, a route map, and company information at Iflyswa.com.[32] The company later obtained the rights to its current home on the web, http://www.southwest.com, from an unaffiliated business. Southwest

consistently rejects syndicating its fares to fare search sites such as expedia.com or orbitz.com.[33] Southwest.com is the number one airline website for online revenue, according to PhoCusWright. Nielsen/Netratings also reports that Southwest.com is the largest airline site in terms of unique visitors.[3] In 2006, 70 percent of flight bookings and 73 percent of revenue was generated from bookings on southwest.com. As of June 2007, 69 percent of Southwest passengers checked in for their flights online or at a kiosk.[3] Southwest also maintains a website for their in flight magazine, named Spirit.
[edit] Safety violations

On March 6, 2008, Federal Aviation Administration (FAA) inspectors submitted documents to the United States Congress, alleging that Southwest allowed 117 of its aircraft to fly carrying passengers despite the fact that the planes were "not airworthy" according to air safety investigators.[34] In some cases the planes were allowed to fly for up to 30 months after the inspection deadlines had passed, rendering them unfit to fly. Records indicate that thousands of passengers were flown on aircraft deemed unsafe by federal standards. Southwest declined comment at the time, and US Representative James Oberstar advised a hearing would be held.[34][35][dead link] On March 12, 2008, Southwest Airlines voluntarily grounded 44 planes to check if they needed further inspection. The FAA claimed that Southwest Airlines flew almost 60,000 flights without fuselage inspection. Southwest Airlines faced a $10.2 million fine if they violated FAA regulations. There have also been rumors that the FAA knew about Southwest Airlines violations but decided not to fine the airline because it would disrupt the service of Southwest.[36] On March 2, 2009, Southwest settled these claims, agreeing to pay the FAA fines of $7.5 million for these safety and maintenance issues. The original fine of $10.2 million - a sum which would have been the largest fine in the agencys history - was lowered after a year of negotiations. The FAA gave Southwest two years in which to pay the fine.[37] On August 26, 2009 the FAA investigated Southwest for installing improper parts on about 10% of its jets. The work was performed by an outside maintenance company. The FAA stated that the parts do not present a safety danger, but the airline was given until December 24, 2009 to replace the parts with those approved by the FAA.[38] The FAA is still determining whether it will fine Southwest or its vendor.[39]

[edit] Headquarters

Southwest Airlines headquarters in Dallas

The Southwest Airlines headquarters are located on the grounds of Dallas Love Field in the Love Field neighborhood of Dallas, Texas.[3][40] Previously the airline was headquartered in the 1820 Regal Row building in Dallas, by Love Field.[41] Southwest moved into its current headquarters in 1990. At that time the headquarters had 256,000 square feet (23,800 m2) of space and approximately 650 employees.[42] The current headquarters facility was built at a cost of $15 million in 1990 dollars.[43] In early 1995 the building received an additional 60,000 square feet (5,600 m2) of space. As of 2006 about 1,400 employees worked in the three story building.[42] In March 1996,[44] the airline announced that it would begin to build a 300,000 square feet (28,000 m2) addition to the existing corporate headquarters at a cost of $30 million in 1996 dollars.[45] This occurred after, on Wednesday March 13, 1996, the Dallas City Council unanimously voted to allow for the construction.[46] The airline leased two additional tracts of land, a total of 10 acres (4.0 ha) of space, from the City of Dallas to build a new pilot training facility, a headquarters expansion, and additional parking spaces. A $9.8 million new pilot training facility was built on a 5 acres (2.0 ha) plot of land owned by the city of Dallas; it was scheduled to be completed Spring 1997. With the new pilot training facility built, the old one would be removed and the company would expand its headquarters building to the north. 120,000 square feet (11,000 m2) of building space, which had a price of $16 million including fixtures, was built, making the headquarters have a total of 436,000 square feet (40,500 m2). The airline also leased 4.8 acres (1.9 ha) from the city of Dallas to build additional parking; 700 spaces were added to the existing 1,200. After the facilities announced in 1996 were added, Southwest had a total leasehold of about 24 acres (9.7 ha) of land, including its headquarters, training facilities, and parking. By the end of 1997 the expansion of the facilities at Love Field and several terminal improvements were expected to cost Southwest $47 million.[42]
[edit] Risk management

Southwest Airlines has gained a reputation for "outside the box thinking" a proactive risk management, including the use of fuel hedging to insulate against fuel price fluctuation. Some analysts have argued against the style of profit-motivated energy trading Southwest did between

1999 and the early 2000s. They suggested that rather than hedging business risk (such as a hedge on weather to a farmer), Southwest was simply speculating on energy prices, without a formal rationale for doing so.[47][dead link] At present, Southwest has enjoyed much positive press (and a strong financial boost) from its energy trading skills.[48][49][50] However, while most analysts agree that volatility hedges can be beneficial,[47] speculative hedges are not widely supported as a continuing strategy for profits.[51] In the third quarter of 2008, Southwest recorded its first loss in 17 years due to its fuel-hedging contracts being of lesser value because of the drop in oil prices.[52] [edit] Corporate affairs and identity
[edit] Organizational culture

Southwest has created a positive workplace culture by promoting open communication and strong team coordination.[53] In particular they have managed to achieve a high level of coordination between employee groups resulting in greater aircraft and employee productivity, fewer flight delays, and fewer customer complaints.[53] This was achieved with the support of top-level management in conjunction with a set of employee practices.[53] Southwest management coach and nurture their front-line staff by providing feedback and support.[53] Southwest's HR strategy (including recruitment & performance management) is geared towards the development of a cohesive team focusing on team performance rather than individual results.[53] Southwest is also a strong supporter of work/life balance, encouraging employees to maintain strong community and family ties.[53]
[edit] Advertising

The company has employed humor in its advertising. Slogans include "Just Plane Smart", "The Somebody Else Up There Who Loves You" and "THE Low Fare Airline". The airline's current slogan is "It's On.". A select history of print and video ads are available on the company website.[54]

A Southwest Airlines Boeing 737-700 with blended winglets (N741SA) pictured on the tarmac at Chicago Midway International Airport wearing the airline's original desert gold livery.

[edit] "Just Plane Smart" Shortly after Southwest started using the "Just Plane Smart" motto, Stevens Aviation, who had been using "Plane Smart" for their motto, threatened a trademark lawsuit.[55] Instead of a lawsuit, the CEOs for both companies staged an arm wrestling match. Held at the now demolished Dallas Sportatorium (the famed wrestling facility) and set for two out of three rounds, the loser of each round was to pay $5,000 to the charity of their choice, with the winner gaining the use of the trademarked phrase. A promotional video was created showing the CEOs "training" for the bout (with CEO Herb Kelleher being helped up during a sit up where a cigarette and glass of whiskey (Wild Turkey 101) was waiting) and distributed among the employees and as a video press release along with the video of the match itself. Herb Kelleher lost the match for Southwest, with Stevens Aviation winning the rights to the phrase. Kurt Herwald, CEO of Stevens Aviation, immediately granted the use of "Just Plane Smart" to Southwest Airlines. The net result was both companies having use of the trademark, $15,000 going to charity and good publicity for both companies.[56]
[edit] Corporate reporting Southwest Cares

Southwest's 2008 report that expounds on the company's commitment to the environment and reports on the airline's corporate responsibility and citizenship efforts pertaining to People, Planet, Communities, and Suppliers. Southwest Cares
[edit] Southwest Effect

Southwest has been a major inspiration to other low-cost carriers, and its business model has been repeated many times around the world. The competitive strategy combines high level of employee and aircraft productivity with low unit costs by reducing aircraft turn around time particularly at the gate.[53] Europe's EasyJet and Ryanair are two of the best known airlines to follow Southwest's business strategy in that continent (though EasyJet operates two different aircraft models today). Other airlines with a business model based on Southwest's system include Canada's WestJet, Malaysia's AirAsia (the first and biggest LCC in Asia), Sir Richard Branson's and Australia's Virgin Blue (although Virgin Blue now operates two aircraft types), Qantas's Jetstar (although Jetstar now operates two aircraft types), Philippines's Cebu Pacific, Thailand's Nok Air, New Zealand's Freedom Air, Mexico's Volaris and Turkey's Pegasus Airlines. Although Southwest has been a major inspiration to many other airlines, including Ryanair, AirAsia and Jetstar, the management strategies, for example, of Ryanair, AirAsia and Jetstar differ significantly from those of Southwest.[57]
[edit] Lobbying This section requires expansion with: more than one sentence of information.

Southwest has fought against the development of a high-speed rail system in Texas.[58][59]
[edit] Awards and recognitions This section needs additional citations for verification.
Please help improve this article by adding reliable references. Unsourced material may be challenged and removed. (August 2010)

The American Brand Excellence Awards recognize leading national brands that best serve the needs of small- and medium-sized businesses. For 2007, Southwest Airlines came out tops in the Travel segment, based on a City Business Journals Network nationwide survey of 1,000 business decision-makers who evaluated 251 brands. For the tenth year in a row, FORTUNE magazine recognized Southwest Airlines in its annual survey of corporate reputations. Among all industries in 2005, FORTUNE has listed Southwest Airlines as number three among Americas Top Ten most admired corporations. FORTUNE has ranked Southwest Airlines in the top five of the Best Companies to Work For in America. Southwest ranked first in 1997 and 1998, second in 1999, and fourth in 2000. Southwest has chosen not to participate since 2000. Southwest Airlines Rapid Rewards program was honored in InsideFlyer magazine's 2006 annual Freddie Awards for Best Program of the Year, Best Award Redemption, Best Award, Best Web Site, and Best Bonus Promotion Honors. For 2007, the eighth year in a row, Business Ethics magazine lists Southwest Airlines in its "100 Best Corporate Citizens", a list that ranks public companies based on their corporate service to various stakeholder groups.[60] Southwest is one of only 11 repeat winners that have made the list all eight years. In 2005 and again in 2008 The American Customer Satisfaction Index (ACSI) recognized Southwest Airlines as leading the industry in customer satisfaction. The ACSI, conducted by the University of Michigan, independently tracks customer satisfaction levels by measuring the household consumption experience.[61] Since 2000, HISPANIC magazine has listed Southwest Airlines as Corporate 100 for leadership in providing opportunities for Hispanics and for supporting recruitment, scholarships, and minority vendor programs. The Express Delivery & Logistics Association honored Southwest Airlines as the "2006 Airline of the Year." In 2005, American Small Business Travelers Alliance ranked Southwest Airlines as the "Best Airline Among Small Business Travelers." Southwest president Colleen Barrett was chosen as 2007's Tony Jannus Award winner,[62] becoming the first woman to be honored in the 44-year history of the respected aviation award. Professional Women's magazine included Southwest Airlines in their 2006 ranking of the "Most Admired Companies Among Women." According to Institutional Investor magazine, Southwest Airlines ranked number one in the Consumer category among all airlines as the "Most Shareholder Friendly Company" based on the effectiveness of Southwest's governance and investor relations as part of their overall efforts to maximize share holder value. Southwest Airlines took top honors in the ninth Business Travel News Annual Airlines Survey. In 2006, Southwest ranked in GIjobs.nets list of 50 military friendly employers. At number 37, Southwest was the only major commercial airline to make the list.

In its January 2006 issue, Institutional Investor ranked Southwest CEO Gary Kelly as one of America's top CEO's. He was ranked best CEO in the airline sector. In April 2007, The Port of Portland presented Southwest Airlines with the Environmental Excellence Award in recognition of an exemplary effort in the category of Environmental Innovation.[63]

[edit] Destinations By 1979, Southwest flew to all of the cities they currently serve in Texas, including El Paso, Amarillo, Beaumont, Corpus Christi, Harlingen, Lubbock, and Midland/Odessa. Interstate service began to New Orleans in 1979, and Albuquerque in 1980. Oklahoma City and Tulsa were added shortly thereafter. In 1981 Southwest co-launched the 737-300 with USAir. In 1982, the first expansion beyond the Southcentral U.S. took Southwest to the West Coast, adding Phoenix, Las Vegas and San Diego. In late 1984, the 737-300 was placed into service. Chicago Midway and St. Louis service began in March 1985, spreading to Midwest markets.[64]
[edit] Current service Main article: Southwest Airlines destinations

Ramp operations at William P. Hobby Airport in Houston, with a Southwest Boeing 737-500 parked at a gate

As of December 8, 2010, Southwest Airlines operates scheduled service to 69 destinations in 35 states, the newest of which being Northwest Florida Beaches International Airport in Panama City, Florida which opened in May 2010.[65] Southwest does not use the more traditional "hub and spoke" flight routing system of most other major airlines, preferring instead the "Point to Point" system. Currently, Southwest serves 69 cities in 35 states, with more than 3,300 flights a day. It has notably large operations in certain airports. Airports with large Southwest operations include Austin (AUS), Baltimore (BWI), Nashville (BNA), Chicago (MDW), Dallas (DAL), Denver (DEN), Houston (HOU), Los Angeles (LAX), Oakland (OAK), Orlando (MCO), Phoenix (PHX), San Diego (SAN), San Jose (SJC), Sacramento (SMF), Salt Lake City (SLC), and Tampa (TPA). An average of 80 percent of Southwest passengers are local passengers, meaning only 20 percent of all passengers are connecting passengers. This is significantly higher than most airlines, where passengers often

connect in hub cities.[66] Las Vegas (LAS) has non-stop service to all but ten of Southwest's destinations.[67] As part of its effort to control costs, Southwest tries to use secondary airports which generally have lower costs and may be more convenient to travelers than the major airports to the same destinations. For example, Southwest flies to Chicago Midway Airport (MDW) in Chicago instead of O'Hare International Airport (ORD), Fort Lauderdale-Hollywood International Airport (FLL) and Palm Beach International Airport (PBI) in South Florida instead of Miami International Airport (MIA), Dallas Love Field Airport (DAL) in Dallas instead of Dallas-Fort Worth International Airport (DFW), Long Island MacArthur Islip Airport (ISP) & New YorkLaGuardia (LGA) instead of New York-John F. Kennedy Airport (JFK) and Houston Hobby Airport (HOU) in Houston instead of George Bush Intercontinental Airport (IAH).

Southwests tribute to Arizona Boeing 737-300 aircraft undergoes maintenance at Portland International Airport.

Southwest makes exceptions to its practice of serving secondary airports by flying into some larger airports in major cities, such as Las Vegas International Airport, Phoenix Sky Harbor International Airport, Lambert St. Louis International Airport, Orlando International Airport, Detroit Metropolitan Wayne County Airport, Philadelphia International, Denver International Airport, Cleveland Hopkins International Airport, Kansas City International Airport, SeattleTacoma International, Raleigh-Durham International Airport, Bradley International Airport (Hartford, CT) and Pittsburgh International. In the Baltimore-Washington market, Southwest has limited flights into one major airport (Washington Dulles International Airport) while maintaining their east-coast focus city at the region's other major airport, Baltimore-Washington International Airport (BWI). In the Los Angeles market Southwest flies to both the major city airport, Los Angeles International (LAX), and to three of the four secondary airports, BurbankBob Hope Airport, Santa Ana-John Wayne Airport, and LA/Ontario International Airport. With the restoration of service out of San Francisco International Airport on August 26, 2007, Southwest now serves all three airports in the San Francisco Bay Area; the other two being Oakland International Airport and San Jose International Airport. The airline also once served Stapleton International Airport in Denver but withdrew in 1986 because of excessive ATC delays during poor weather exacerbated by minimal separation between the runways. Southwest returned to Denver in 2006 with service to the new Denver

International Airport. Southwest is expanding Denver service faster than any previous Southwest destination[68] at the cost of service to Orlando, Kansas City and Baltimore.[69]
[edit] Top served cities

As of November 7, 2010[3]
City Las Vegas Chicago-Midway Phoenix BaltimoreWashington Denver Houston-Hobby Dallas-Love Los Angeles Oakland Orlando Daily departures Number of gates Cities served nonstop Service began

212 208 173 160 141 127 125 110 103 91

19 29 24 26 17 17 15 11 13 12

54 52 47 43 42 30 15 21 19 32

1982 1985 1982 1993 2006 1971 1971 1982 1989 1996

[edit] Newest Service

During November 2008, Southwest applied to purchase 14 slots (for 7 roundtrips daily) previously used by ATA Airlines at LaGuardia Airport.[70] The bid was approved about a month later, and further progress was made during late March, 2009. In early April, it was announced that the airline will (strategically) have a combined total of 16 daily arrivals and departures (5 and 3 each way with MDW and BWI respectively), despite the receipt of only 14 slots.[71] On June 28, 2009 Southwest successfully started serving LaGuardia Airport and the airline is confident about future growth at LGA, including expanded service to other locations.;[72][73] On February 19, Southwest announced service to Boston's Logan airport, in the Fall of 2009 .[74] Service began August 16, 2009, with five daily roundtrips to both BWI and MDW .[75] Southwest says that it is complementing their service to Manchester, NH and Providence, RI. As reported

by the Boston Herald earlier this year, there is a two-gate operation with an additional 2 gates as options at Logan .[76] Southwest is hoping to curve toward business travelers that stay in downtown Boston and bring lower ticket cost and fees to these travelers .[77] In October 2009, the airline announced service to Northwest Florida Beaches International Airport near Panama City, Florida, with service to Baltimore-Washington, Orlando International, Houston-Hobby, and Nashville International. Service began on May 24, 2010.[78] On May 11, 2010, Southwest announced plans to begin serving both Greenville-Spartanburg International (GSP) and Charleston International (CHS) airports in South Carolina. The airline will start flights to and from South Carolina on March 13, 2011. Both airports will have nonstop service to and from Baltimore-Washington, Chicago-Midway, Houston-Hobby, and Nashville International, with GSP also having nonstop service to and from Orlando International.[79] On August 27, 2010, Southwest announced that it was to receive 36 slots at Newark Liberty in a divestiture from Continental Airlines, due to a United States Department of Justice ruling as a result of the merger of Continental and UAL Corporation.[80] On October 28, 2010, Southwest announced it would begin serving Newark on March 27, 2011, beginning with a "first wave" of six daily nonstops to Chicago-Midway and two daily nonstops to Lambert-St. Louis International Airport. Additionally, on June 5, 2011, Southwest will add ten more nonstops from Newark, with three each to Baltimore-Washington and Denver, and two each to Houston-Hobby and Phoenix.[81]
[edit] International service

As of January 2011, Southwest does not offer direct service to destinations outside the United States. Southwest has entered into code sharing agreements with other airlines to allow Southwest customers to connect to international destinations. After Southwest completes its acquisition of AirTran Airways in early 2011, Southwest will offer direct service to a number of international destinations in Mexico and the Caribbean currently served by AirTran.[citation needed] Due to contractual agreements with it pilots' and flight attendants' unions, Southwest is required to negotiate with those unions before entering into any code sharing agreements with other airlines.[citation needed] [edit] ATA Airlines codeshare Prior to ATA Airline's shutdown, Southwest had set a goal to codeshare with ATA and begin international codeshare services or ticket for international flights in 2009. Destinations served by ATA would have included Canada, Mexico, Europe and the Caribbean.[citation needed] [edit] WestJet codeshare On July 8, 2008, Southwest announced that it agreed to a comprehensive codeshare agreement with Canada's second largest carrier, WestJet Airlines.[82][83][84] Southwest terminated the WestJet codeshare agreement in early 2010.

[edit] Volaris codeshare Southwest announced a plan to codeshare with Mexico's Volaris and flights are expected to begin in 2010.[citation needed]
[edit] Codeshare agreements Current

Volaris

Southwest announced its second international codeshare agreement on November 10, 2008, with Mexican low-cost carrier Volaris. The agreement will allow Southwest to sell tickets on Volaris flights beginning in 2010, including international flights from the United States that the carrier started in early summer, 2009.[85] Volaris serves Chicago Midway (MDW), Oakland (OAK), Los Angeles (LAX) and San Jos (SJC) with service to Guadalajara. Volaris also operates between Los Angeles (LAX) and Morelia (MLM), Toluca (TLC) and Zacatecas (ZCL).[86]
Past

Icelandair

In 1997, Southwest and Icelandair entered into interline and marketing agreements allowing for joint fares, coordinated schedules, and transfer of passenger luggage between the two airlines at Baltimore. Icelandair operated flights between Baltimore and Keflavik Airport in Iceland. Connecting service between several U.S. cities and several European cities appeared in the Southwest timetable[87] The frequent flyer programs were not included in the agreement. This arrangement lasted for several years but is no longer in existence, and Icelandair service to BWI ended January 2007.[88]

ATA Airlines

ATA Airlines, one of Southwest Airlines' main competitors in the Chicago market, historically operated out of Midway Airport alongside Southwest. ATA declared bankruptcy, and in 2004, Southwest injected capital into ATA that (among other things) would have resulted in Southwest's 27.5% ownership stake in ATA upon their exit from Chapter 11 bankruptcy proceedings. In a departure from its traditional "go it alone" strategy, Southwest entered into its first domestic codesharing arrangement with ATA, which enabled Southwest Airlines to serve ATA markets in Hawaii, Washington, D.C., and New York City. In late 2005, ATA secured $100 million in additional financing from the firm of MatlinPatterson, and Southwest's original deal with ATA was modified such that Southwest no longer retained the 27.5% stake (or any other financial interest) in ATA. The codeshare arrangement expanded to include all of ATA's 17 destinations and all of Southwest's 63 destinations. In 2006, Southwest's pilot union approved a codeshare sideletter to their contract with limitations on the growth of this

and other codeshare agreements. While these restrictions today are minor, outsourcing remains a growing concern in the union's current contract negotiations. During 2006, Southwest Airlines began marketing ATA only flights. ATA's dependence on the Southwest network continued to grow in 2006, and at the time of ATA's demise in April 2008, the airline offered over 70 flights a week to Hawaii from Southwest's focus cities in PHX, LAS, LAX, and OAK. Additional connecting service was available to many other cities across the United States. Plans had been announced for ATA to offer exclusive international service for Southwest by 2010, but were scratched when ATA abruptly ended operations on April 3, 2008. There was no plan to open the ATA/Southwest codeshare to ATA's sister carriers, North American Airlines or World Airways, even though they are co-owned by the same corporate entity created from ATA Holdings. The ATA/Southwest codeshare was terminated when ATA filed for Chapter 11 bankruptcy on April 3, 2008.[89][dead link] Towards the end of November 2008, Southwest announced it was buying the operating certificate and the remaining assets of ATA Airlines thus enabling Southwest Airlines access to New York LaGuardia slots formerly controlled by ATA. According to Southwest Airlines "...it doesn't include any aircraft, facilities or employees of ATA."[90]

WestJet Airlines

On July 8, 2008, Southwest Airlines officially announced the intent to begin a codeshare agreement with WestJet Airlines of Canada, giving the two airlines the ability to sell seats on each other's flights.[91] Originally, the partnership was to be finalized by late 2009, but has been postponed due to economic conditions.[92] On April 16, 2010, Southwest and WestJet airlines amicably agreed to terminate the implementation of a codeshare agreement between the two airlines. [edit] Fleet
[edit] Current fleet

As of September 30, 2010 the Southwest Airlines fleet consists of 547 aircraft, all of which are variants of the Boeing 737.[3] Southwest owns more Boeing 737 aircraft than any other airline in the world and is often cited as an example of an airline containing costs and streamlining operations by flying only one type of aircraft.[citation needed] Southwest has been a launch customer for all three of the Boeing 737 variants it currently operates and was the first airline to put both the 737-500 and 737-700 into service.[citation needed] Although known for its flying only Boeing 737 aircraft, Southwest has operated other aircraft at times. Southwest operated leased Boeing 727-200 aircraft during the late-1970s and the mid1980s and Southwest subsidiary TranStar Airlines operated McDonnell Douglas DC-9s and McDonnell Douglas MD-80s during the mid-1980s.[citation needed] After completing the purchase of AirTran Airlines, Southwest will add AirTran's existing fleet of both 737-700 and smaller

Boeing 717-200 aircraft to the Southwest fleet, giving Southwest a fleet based on two different families of airliners.
Southwest Airlines fleet[93] Aircraft In Outstanding Purchase Options Passengers Service Orders Rights Notes Launch customer and largest operator of this variant Newer aircraft being retrofitted with electronic flight decks Launch customer and 4th largest operator of this variant. The 735 (737-500) has 21 rows of 6 seats (minus 1 seat for over wing window exits) compared to 733 (737-300) or 73G (737-700) models which have 23 rows of 6 seats (minus 1 seat for over wing window exits) Launch customer and currently the largest operator of the type All feature glass cockpit screens for compatibility with analog cockpits 25 orders are to replace older Boeing 737 Classics Unions approved conversion to -800 or 900 series for gate constrainted airports[94] Scheduled to enter service in March 2012 ETOPS configured upon delivery[95]

Boeing 173 737-300

137

Boeing 25 737-500

125

Boeing 349 737-700

113

37

98

137

Boeing 0 737-800

20

175

The interior of a Southwest 737-700 with the airline's leather seating

After Boeing ceased production of the 737-300 and 737-500 variants, Southwest began ordering the 737-700 exclusively.[citation needed] Beginning in December 2007, Southwest began retiring some older 737-300s, reducing Southwest's 737-300 fleet count from its peak of 194.[citation needed] In comparison to the glass cockpits installed in competitor's 737-300 and 737-500 aircraft, Southwest's aircraft of those types are equipped with with analog gauges.[citation needed] Newer Boeing 737-300 variants are being upgraded with retrofitted electronic flight decks and blended winglets to reduce operational costs. The retrofits will make the 737-300s operationally compatible with the 737-700 and support the airline's move to embrace the Global Positioning System enabled Required Navigation Performance system.[96][97] On December 15, 2010, Southwest announced a plan to add the 737-800 to the Southwest fleet. Southwest changed an existing order with Boeing and plans to begin taking delivery of 20 new 737-800 aircraft beginning in March 2012.[98] Southwest states that the 737-800 could enable more scheduling flexibility, allowing additional capacity in high-demand, slot-restricted or gaterestricted airports. Southwest may use the Boeing 737-800 first at busy airports in the Northeast and also stated that the aircraft could be used to fly to Hawaii, Alaska, Canada, Mexico and the Caribbean, destinations that Southwest does not serve. The 737-800 has 175 seats, 38 more than the largest planes in Southwest's current fleet. Due to the larger seat count, Southwest will add one additional flight attendant to each 737-800 flight.[citation needed] [edit] Fleet age and utilization As of August 2009, Southwest has an average fleet age of 14.0 years and each plane flies an average of about 7 flights per day,[99] Southwest aircrafts' average trip length is 633 miles (1,019 km) with an average duration of one hour and 48 minutes. The daily utilization of each plane is, on average, 12 hours and 36 minutes.[citation needed] [edit] Seat pitch and width The seat pitch averages between 32 inches (810 mm) and 33 inches (840 mm), which is longer than the average U.S. domestic airlines of 31 inches (790 mm) to 32 inches (810 mm).[citation needed] Although Southwest offers a longer seat pitch than most competitors, airlines operating variants of the Airbus A320, such as JetBlue, offer seats that are one inch wider.[citation needed]
[edit] Retired fleet Southwest Airlines retired fleet Aircraft Year retired Replacement Notes

Boeing 737-200 2005

Boeing 737-700 Southwest's first aircraft type

Boeing 727-200 [edit] Livery

Boeing 737-200 727's leased from Braniff International

Southwest Boeing 737-300 N340SW pictured in the airline's original desert gold livery retired in January 2001.

Southwest Boeing 737-300 N310SW pictured in the airline's current canyon blue livery.

Blended winglets on two Southwest aircraft. Both the the retired desert gold livery and the current canyon blue livery are pictured.

Southwest introduced the current canyon blue livery on January 16, 2001, the first primary livery change in Southwest's 30-year history. Spirit One was the first plane painted in the canyon blue fleet color scheme. The new livery replaces the former primary color, desert gold, with canyon blue and changes the Southwest text and pinstripes to gold. The orange and red stripes continue to be used. The pinstripe along the plane is drawn in a more curved pattern instead of the straight horizontal line separating the colors in the original. For aircraft equipped with blended winglets, the blended winglets are painted to include the text SOUTHWEST.COM. Southwest completed repainting its entire fleet with the new canyon blue livery by late 2007. [edit] Original livery Southwest's original primary livery was desert gold, red and orange, with pinstripes of white separating each section of color. The word Southwest appeared in white on the desert gold portion of the tail. On the original three 737-200s, from June 1971, on the left side of the plane, the word Southwest was placed along the upper rear portion of the fuselage, with the word Airlines painted on the tail where Southwest is today N21SW. On the right side, the word Southwest was in the same place as today, but also had the word Airlines painted on the upper rear portion of the fuselage.N20SW. [edit] Special Liveries

Shamu special livery

Arizona One special livery

Lone Star One special livery

Some Southwest aircraft feature special liveries. Southwest gives these aircraft special names, usually ending in "One". All special liveries prior to Spirit One wore the standard desert gold, red and orange colors on the vertical stabilizer and rudder. Subsequent special liveries including Maryland One, Slam Dunk One and others feature tails with the canyon Canyon Blue livery. All earlier specials, with the exception of Triple Crown One, have been repainted to match. Aircraft painted in special liveries, such as Shamu, have plain white painted blended winglets.[3] Some of the well-known examples of special liveries include:

35th Anniversary combined the original primary livery with the current canyon blue livery. Arizona One: (1994) The flag of the state of Arizona applied across the aircraft. (N383SW) California One: (1995) The flag of the state of California applied across the aircraft. (N609SW) Florida One: (2010) The flag of the state of Florida applied across the aircraft. (N945WN)[100] The Fred J. Jones: (1984) In honor of Fred J. Jones, one of Southwest's original employees.[101] Signature on the nose. It later became Southwest's only 737-200 to be painted in the Canyon Blue livery when it was applied in 2001. The aircraft was retired in 2005 and replaced in the same year with a 737-700 with the same signature on the cone. The replaced aircraft is also the first 737 Next Generation that was manufactured without eyebrow windows above the cockpit. (737-200 N96SW: Original,Canyon Blue) (737-700 N201LV). Illinois One: (2008) The flag of the state of Illinois applied across the aircraft. (N918WN) The June M. Morris: (1994) In honor of June Morris, Signature and Morris Air logo on the nose. Logo removed for Canyon Blue repaint. (N607SW, Original, Canyon Blue) Lone Star One: (1990) The flag of the state of Texas applied across the aircraft. (N352SW) Maryland One: (2005) The flag of the state of Maryland applied across the aircraft. (N214WN) Nevada One: (1999) The flag of the state of Nevada applied across the aircraft. (N727SW) New Mexico One: (2000) The flag of the state of New Mexico applied across the aircraft. (N781WN) Nolan Ryan Express: (1998) Commemorative sticker dedicated to famous Texas pitcher Nolan Ryan who is MLB's all-time strikeout leader with 5,714 strikeouts. (N742SW) Shamu: The three aircraft are painted to look like an Orca, with advertisements for SeaWorld. (N334SW), (N713SW), (N715SW) o The first aircraft to be painted in the "Shamu" scheme was N334SW (1988), a 737-300, and it was later followed by N507SW (Shamu II) and N501SW (Shamu III), both 737-

500s. Subsequent to the retirement of Southwest's 737-200s, the 737-500s began to stay within a smaller geographic area formerly operated by the 737-200s, and as such, Sea World was no longer getting the optimal national exposure from these two aircraft. Two 737-700 aircraft, N713SW and N715SW, were repainted as the new Shamu aircraft, and both N501SW and N507SW were eventually repainted in Canyon Blue colors. All three current Shamu aircraft are no longer referred to as Shamu I, II, or III. The artwork on the nose of each aircraft simply states "Shamu". The overhead bins on the -700 series aircraft display ads for Sea World, except towards the front and back of the airplane, where the bins get smaller and are no longer uniform. Silver One: (1996) 25th Anniversary aircraft. Originally polished bare metal, it was later painted silver for easier maintenance. It was then re-painted with a silver metallic paint. This aircraft also featured silver seats, which were replaced to conform with the rest of the fleet for simplicity. Silver One also featured silver heart shaped drink stirrers. Most recently Silver One was repainted in the fleet standard Canyon Blue theme due to the silver paint looking dingy and the company felt it did not fit the companies cheerful, bright personality. The Silver One nose logo remained but the interior was replaced with the fleet standard blue and tan. (N629SW, Original, Silver Paint, Canyon Blue) Slam Dunk One: (2005) Basketball superimposed on side of aircraft and a different NBA team logo on each overhead bin in the cabin, recognizing Southwest's partnership with the National Basketball Association. On October 11, 2010 Southwest Airlines and the National Basketball Association announced that their partership has ended and the aircraft will be repainted to standard canyon blue livery. Source: Dallas Morning News Aviation Blog (N224WN) The Spirit of Hope: (2004) Dedicated to the Ronald McDonald House. Overhead bins are covered in artwork from kids at a Ronald McDonald House in Washington State. (N443WN), (The overhead bins) The Spirit of Kitty Hawk: (1984) Livery and title introduced the first three Boeing 737-300 aircraft to the Southwest Airlines fleet. (N300SW) is the oldest 737-300 in Southwest's fleet, followed by sister ships (N301SW) and (N302SW). Spirit One: (2001) 30th Anniversary aircraft. (First Aircraft in New Canyon Blue paint scheme) (N793SA) Sports Illustrated: (2009) A large decal of Sports Illustrated Swimsuit Edition Cover Model Bar Refaeli adorns the fuselage of N922WN . However on June 16, 2009 this aircraft was photographed in full canyon blue on a photo posted on airliners.net (N922WN, Sports Illustrated/Original, Canyon Blue)[102] Tinker Bell One: (2008) Includes the logo of the Tinker Bell movie and a sticker featuring the phrase "Powered by Pixie Dust". However on April 2, 2010 this aircraft was photographed in full canyon blue on a photo posted on airliners.net, and on August 8, 2010 a photo of this aircraft was posted on airliners.net with the "Free Bags Fly Here" sticker just above the cargo door to promote Southwest's Bags Fly Free campaign. (N912WN, Tinker Bell/Original, Canyon Blue, Free Bags Fly Here) Triple Crown One: (1997) Livery dedicated to the employees of Southwest, in recognition of Southwest receiving five Triple Crown airline industry awards (best on-time record, best baggage handling, and fewest customer complaints). The overhead bins in Triple Crown One one are inscribed with the names of all employees that worked for Southwest at the time, in honor of their part in winning the award.(N647SW) Southwest received both the 5,000th 737 produced (February 13, 2006) (N230WN) and the 2,000th "Next Generation" 737 produced (July 27, 2006) (N248WN). The 2,000th "Next Generation" 737 is marked as such in its livery, though the 5,000th 737 is not similarly marked on

the outside. It does have a placard stating that it is the 5000th 737 on the upper part of the inside entry door frame. Southwest received their 500th 737 on June 28, 2007. This aircraft is marked to honor this milestone. (N281WN)

[edit] Products and Services

[edit] Southwest experience

Prior to the 2000s, Southwest served smaller meals than the meals served by full service airlines, with shorter flights receiving single small snacks and soft drinks, and longer flights (with a duration of about 3 hours or more) meriting "Snack Packs" of prepackaged goods. In the 2000s these meals in a bag typically exceed the food served on full-service airlines like United Airlines or American Airlines.[citation needed] Southwest also offers free in-flight beverages (excluding alcohol). Southwest has complimentary peanuts or pretzels on all flights, and many flights have free Nabisco snacks. There is no in-flight entertainment. Southwest is known for colorful boarding announcements and crews that burst out in song. The singing is unusual, and is quite popular among passengers, but has been noted by some travel critics as being offensive and intrusive.[103] Southwest maintained excellent customer satisfaction ratings; in 2006, according to the Department of Transportation December year end operating statistics, Southwest ranked number one (lowest number of complaints) of all U.S. airlines for customer complaints, with 0.18 per 100,000 passengers enplaned. Southwest Airlines has consistently received the fewest ratio of complaints per passengers boarded of all major U.S. carriers that have been reporting statistics to the Department of Transportation (DOT) since September 1987, which is when the DOT began tracking Customer Satisfaction statistics and publishing its Air Travel Consumer Report. In July 2010, it became widely public that Southwest had classified mechanical difficulties as an act of God in their contract of carriage, a definition not shared with major competitors such as Delta, American, Continental and United.[104] By doing so, Southwest is under no obligation to provide passengers compensation for "any type of special, incidental or consequential damages" and limits their recourse to receiving a refund of the unused portion of their tickets. According to a Southwest spokesman, the airline will still assist affected passengers "just as in the past."[104]
[edit] In Flight Wi-Fi

After completing a testing phase that began in February 2009, Southwest announced on August 21, 2009 that it will begin rolling out in-flight wi-fi Internet connectivity via Row 44's satellitebroadband based product. Beginning in the first quarter of 2010, Southwest plans to update its entire fleet.[105] [edit] Frequent-flyer program Southwest first began to offer a frequent-flyer program on June 20, 1987, calling it The Company Club. Unlike competitor's programs which were based on miles flown, The Company

Club credited for trips flown regardless of distance.[106] Southwest Airlines gave its frequent flyer program the current name, Rapid Rewards, on April 25, 1996 replacing "The Company Club".[107]
[edit] Rapid Rewards program description

The original Rapid Rewards program offered one credit per one-way flight from an origin to a destination including any stops or connections on Southwest Airlines. When 16 credits were accumulated in a 24 month period, Southwest awarded one free round-trip ticket that was valid for 12 months.[108] Beginning March 1, 2011, Rapid Rewards changed to a points system based on ticket cost.[109] Members earn and redeem points based on a three-tier fare scale multiplier and the cost of the ticket.[110] [edit] Points earned with partners Customers were able to earn one-half credit by using a Southwest partner to book any car rental or hotel stay, regardless of whether a Southwest flight is involved. Rapid Reward members can also earn one credit for every US$1,200 charged to a Rapid Rewards branded Visa credit card, with charges from Southwest or its partners counting double by dollars spent. Members could register their credit card with Rapid Rewards Dining at rapidrewardsdining.com to receive 0.25 credits for every US$100 spent at restaurant partners. In early 2009, Southwest announced their first retail partner, TeleFlora Flower Club, from which members can earn 0.5 or 1.0 credits with each flower order, depending on the total cost of the order.[111] [edit] Online booking bonus Initially, double rapid rewards credits were awarded for trips booked online using the southwest.com website, but this policy was modified at the end of 2003 to award one-half credit for each segment booked online. The bonus for online booking was discontinued completely in April 2005.[citation needed] [edit] Blackouts and capacity controls Prior to February 2006, reward travel was subject to blackout dates but not capacity controls: one could use a reward to travel on any flight for which seats were available, provided it was not on one of the five blackout dates. In February 2006, these policies were reversed: the blackout dates were eliminated, but capacity controls were instituted, limiting the quantity of seats available to those traveling on reward credits.[citation needed] [edit] Code share flight credits In early 2006, Southwest expanded its codeshare agreement with ATA Airlines and allowed redemption of award tickets on flights to Hawaii at the rate of two awards per round trip flight. This program ceased on April 3, 2008 when ATA ceased operations due to bankruptcy.[citation
needed]

[edit] Incidents and accidents

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Southwest Airlines Flight 1248 runway overrun at Chicago Midway International Airport

Southwest Airlines has not had any passenger deaths on any of its planes in its history, but has had eight incidents/accidents with one hull-loss and two deaths on the ground.

On March 5, 2000, Southwest Airlines Flight 1455 overran the runway upon landing at BurbankGlendale-Pasadena Airport, now called Bob Hope Airport, Burbank, California, injuring 43. The incident resulted in the dismissal of the pilots. The aircraft was damaged beyond repair. This incident is the only hull-loss accident in the 38+ year history of the airline. On August 11, 2000, passenger Jonathan Burton broke through the cockpit door aboard Southwest Airlines Flight 1763 while en route from Las Vegas to Salt Lake City. In their own defense, the other passengers restrained Burton, who later died of the resulting injuries.[112] A CSI episode, "Unfriendly Skies", using similar incident elements in its plot, aired on December 8, 2000. Wikinews has related news: Southwest Airlines flight skids off runway at Chicago's Midway

On August 19, 2004, Southwest Airlines Flight 411, taking off from Los Angeles International Airport bound for Albuquerque, New Mexico, was on the same runway that Asiana Airlines Flight 204, a Boeing 747, was using for landing due to an air traffic control error. The Asiana pilot aborted the landing, saving both planes.[113] On December 8, 2005, Southwest Airlines Flight 1248 (pictured above in its end result) skidded off a runway upon landing at Chicago Midway International Airport in heavy snow conditions. A six-year-old boy died in a car struck by the plane after it skidded into a street. Passengers on board the aircraft and on the ground reported several minor injuries. The aircraft involved, N471WN, became N286WN after repairs.

On May 12, 2009, one of the starboard rear tires of Southwest Flight 519 from New Orleans deflated upon landing at Houston Hobby Airport. The metal rim of the wheel made contact with the runway, and the resulting sparks ignited the tire. It took about eight minutes to extinguish the fire.[114] On July 13, 2009, Southwest Flight 2294 from Nashville International Airport to BaltimoreWashington International Airport was forced to divert to Yeager Airport in Charleston, West Virginia, after a hole formed on the top of the plane's fuselage near the tail, resulting in depressurization of the cabin and deployment of the oxygen masks. The aircraft landed safely.[115]