Operational Management at South West Airlines --------------- A Case Study--------------------

In 1967,Rolling King and Herb Kelleher founded Southwest an intrastate airlines. In 1982, Just Say When campaign In 1987,Frequent flier programme,no. of flights taken. In 1992,Southwest won the annual Triple Crown Award. In 1996,SW started selling through Website www.southwest.com

Milestones:

In 2000,SW placed biggest aircraft order ever,delivery of 94 Boeing737. In 2001,Sept terrorist attacks,SW managed to post a profit. In 2002,the worst year ever for the airlines industry ,SW posted its 30th consecutive profit. In 2003,SWAirlines was the 4th largest US airlines in terms of domestic customers carried.

 Providing

safe travel
duration air service

Reliable/Short Lowest Quality Blanket

possible fare service/Point to Point strategy

Passenger Load factorIt is the percentage of a plane filled with paying passengers.

Passenger Load Factor

72 70 68 66 64 62 1998 1999 2000 2001 2002

Revenue passenger /miles One paying passenger flown one line

Revenue passenger miles

60000 40000 20000 0 1998 1999 2000 2001 2002 million

Average Daily Passengers

3,000 2,000 1,000 0

Aircraft Utilizatin
11:24 11:16 11:09 11:02
1998 1999 2000 2001 2002 hr:min

passengers

Aircraft Utilization-in hours and minutes in a day an aircraft is used.

In2002, a sluggish economy High Energy Cost/ATF Cost Tension in Gulf spelled Trouble for airline industry

SW's Revenue & NI(in $mn)

6000 4000 1000

2000
0 1998 1999 2000 2001 2002

500
0

Revenue

NI

Southwest avoided congested airport. High employee productivity. Reliable on time performance.

Daily Departure
200 180 160 140 120 100 80 60 40 20 0

No. of Daily Flights

141 150 122 130 117

171 180

80

86

No od Daily flights

Airports

7:55 Ground crew chat around gate position

8:03:30 Ground crew move to their vehicles

8:04 crew moves towards gate

8:06:30 Baggage unloaded, refueling

8:15 Jet way retracts

8:10 Boarding complete. ground crew leaves

8:08 Boarding call ,baggage loading, refueling complete

8:07 Passenger off plane

8:15:30 Pushback from backs

Pushback disengages plane leaves for runway

8:18

No meals

Limited passenger service

No baggage transfers

No site assign ments

Short haul, point to point

No connection with other airlines

Passenge r related departur e

High aircraft utlzn

Very low ticket prices

 Standardized Southwest High

fleet of 737 aircrafts

the low fare airlines

level of Employee Stock Ownership

Flexible

Union contracts/High compensation of employees. gate turnaround/Limited use of travel

15-minute

agents

 Increase

more non stop flights Enrich operation system Include daily non stop flights in busy air traffic route.