SouthWest Airlines Case

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What do you understand by the term "turnaround time" of aircraft at the
airports? How did Southwest manage to reduce this turnaround time? Why
and how does this reduced turnaround time lead to higher revenues to the
firm? Name and briefly explain three other operational decisions that
enabled Southwest achieve the lowest operational costs in the industry?
What benefits the customers get out of this low operational cost model?
Term turnaround time in the context of aircraft at the airport means the process and amount of time taken
by an aircraft crew to drop the first set of passengers and luggage at a destination and readying the next
flight by loading a different group of passengers, luggage, servicing the aircraft. Southwest Airlines is a
success story in terms of reducing their turnaround time. They sent their team to Indianapolis race to
watch how the car pit crews performed so efficiently. SW recognized that servicing cars was similar to the
operations of an aircraft. By observing the pit crews they were able to come up with new, improved ideas
of handling equipment, management and how to work as a team. This saw a 50% reduction in turnaround
time as compared to their competitors. Reduced turnaround time means less bottle-necks and more flights
could be run which lead to higher revenues.
3 operational decisions which led to lowest operational costs for SW airlines were:




No In-Flight Meals: Southwest did not provide in-flight meals which was one of the focal points
of running a low cost model.
One model of aircraft was operated: Operating one type or model of aircraft meant that southwest
training and servicing related costs were minimized. The employees had very sound knowledge
on how the systems in the aircraft worked.
Point to Point flights: Southwest did not rely on the traditional hub system which was utilized by
their competitors. This meant that there were direct routes and people did not have to take
connecting flights.

By operating on a low cost model, SW was able to pass on this benefit to their customers by having
reduced airfares. Direct routes also meant no connecting flights which also benefitted their customers as
their overall travel cost was considerably lower.
Briefly explain the three basic distinguishing elements of employee
relations at Southwest. Also explain how each of these three elements
translate into overall benefits to the business?
The three important elements which were an integral part of excellent employee relations at SW were as
follows:
1. SW enjoyed an unprecedented lowest employee turnover ratio in the industry. The main reason of
low employee turnover was the Job security which the management promised and delivered
upon. Even in times of low economic activity the staff was never sent on unpaid leaves also
known as furlough. Employees appreciated the fact that SW employed an employee first strategy
hence they were fiercely loyal to the company.
Benefit: Job security in tough times meant lowest turnover ratio in the industry. Lower cost for
the company hiring new employees.
2. The focal point of the hiring process was judging a potential candidate in terms of how much
importance he gives to customer service that too externally as well as internally. The company
was also of the view that employees are prone to making mistakes hence it is important to

understand why mistakes are made and come up with ways which solve those mistakes and make
sure they don’t happen the next time. In normal circumstances, arguments will take place and
problems won’t be resolved in a timely manner.
Benefit: Resolving situations and coming up with ideas to avoid mistakes has a positive effect
rather than arguing and pointing fingers. This meant healthy manager-subordinate relationships.
3. The culture in the company also was an important element which meant excellent employee
relationships. Employees had one common goal to achieve what’s best for the company. Flexi
timings and trading shifts was a norm even if it was not part of the HR manual.
Benefit: Flexi timings and trading shifts are important non-monetary factors in keeping up the
motivation of the employees.

According to the Case, one thing frequent flyer passengers complain about
Southwest is the absence of any preferential seating arrangement for
them. What would have been your decision regarding this suggestion?
Explain briefly the current passenger seating process and your decision to
the frequent flyer complaint, citing both pros and cons.
One of most important facets, which differentiated southwest airlines from its competitors was its seating
arrangement plan. SW employed the FCFS rule which meant that those travelers reaching the airport
earlier would get a better choice of seats. SW would divide the passengers into groups called zones and
the customers reaching well before time would be given boarding passes of earlier zones, hence they
would get a better choice of seats.
SW had very few complaints from its customer base, but the only thing which the frequent flyers
complained about was that they were not given preferential treatment even if they flew 100,000 miles
yearly through SW like Liz Blast. Even though SW had a much incentivized flyers program which also
included free tickets, still people like Liz, who were business travelers complained to the lack of
preferential treatment.
The egalitarian concept implemented by SW was fairly uncommon in the industry and SW believed in
treating every customer equally but to SW to prosper in the long run SW can revisit their seating plans
and switch to giving some preferential treatment to its frequent customers or regular fliers. With
competition increasing it becomes very important that the loyal customers stick with SW and people who
travel frequently prefer that they get better seating and their travel plans do not get any last minute
hitches.
SW had built a reputation of being a low cost airline who treated all customers equally, hence if they
change their seating plans, this might turn away some customers, because people who reach early are the
ones who give importance to timings, hence they might be put off if they don’t get the best seats.

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