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  • Case Study onSouthwest Airlines 2002: An Industry Under SeigeGROUP NO-06 Ritesh Chhadwa 3Gopal Kadkade - 12Dipesh Kotecha - 15Darshan Kurlawala -16Jayesh Name - 28Santosh Vishwakarma - 55

  • Topics CoveredThe Southwest StoryThe Founding StrategyCompetitive ResponseSouthwests TakeoffStrategyLeadership, Values, and CultureOrganizationThe Impacts of the Events of 9/11Immediate ResponsesHeightened Security and RegulationsIndustry Bailout and TaxationNew Competitive PositionLabour RelationsShort-Term Challenges: Operating ProceduresLong-Term Challenges: Growth StrategiesA Late October Visit to Southwest Airlines Headquarters

  • The Southwest Story:The Founding StrategyFounded by Rollin King and Herb Kelleher in 1967Need for low cost airlinesComparison to driving a vehicle over the same routeLove ThemePoint-to-Point serviceTurnaround time minimized to 15 minsFun during Flights

  • The MAP

  • The Southwest Story:Competitive ResponseEnjoin issuance of Southwests intrastate operating certificateAbandon Love FieldLow-price fare sales60-day half price sale by Braniff InternationalChivas Regals biggest distributors

  • The Southwest Story:Southwests TakeoffAirline Deregulation Act in 1978Manage in good times in order to survive in bad timesAcquisitions of Morris Air and Muse AirThe Southwest EffectNYSE trading symbol LUVReplication of service by People ExpressCultural devotion to the internal resource

  • Market Share

  • Strategy:Non-adaptation of Hub-and-spoke route systemPoint-to-point route systemTurnaround time strategy:Absence of meals on flightLimited amount of checked luggage on aircraftNear-uniform configurationTeam-oriented ApproachHigh-speed boarding processHands-off of flightsUtilization of agentsNo fixed assignment of seatsIncentive for an early arrival at the gateLast-minute arrivalsMaverick in ticketing processesOwn-ticketing distribution systemThe worlds first frequent-flier program

  • Leadership, Values, and Culture:LeadershipDay-to-day operating responsibilities by Jim Parker (Former VP General Counsel) now CEOBarrett (Former VP Customers) now President and COOAnchoring the leadership teamKelleher positioned as ChairmanPublic RoleResponsibilities for growth strategies, government and airline industry relations

  • Hierarchy

  • Leadership, Values, and Culture:Values and CultureThe Basic PrincipleFocus on the situationMaintain self-confidence and self-esteemMaintain constructive relationshipsTake InitiativesLead by exampleCulture CommitteePartnering with UnionsJoint problem Solving

  • Organization:Cross-functional decisionsOperating agents conceptGroup InterviewsTotal Compensation

  • The Impacts of the Events of 9/11:Immediate ResponsesNo Lay-offs or Cut-back in flightsSecurity IssuesMore customer service agentsPatriotism and Resiliency

  • The Impacts of the Events of 9/11:Heightened Security and RegulationAwake of Transportation Security Administration (TSA)Daily call on Todays directive with all Southwest stationsMaximum passengers screened comparativelyAbandoning of plastic boarding passes

  • The Impacts of the Events of 9/11:New Competitive PositionIncrease schedules and employment post 9/11Substantial decline in earnings due to lower ticket prices, higher costs and new taxes

  • The Impacts of the Events of 9/11:Labor RelationsLabor contract negotiationsSuperior relations with labour comparativelyWe dont want to be just another airline

  • Short-Term Challenges: Operating ProceduresNo change in flight schedule by Southwest Airlines despite 9/11Just doing the best possible jobReschedule the airlineRedesign passenger and baggage-handling processBoarding policiesAbandon open seating

  • Long-Term Challenges: Growth Strategies19 aircraft deferredBorrowed Billion dollarsDeveloped Contingency planFirst non-stop transcontinental flightNo additional catering or on-board staffingAnalysts observation

  • A Late October Visit to Southwest Airlines HeadquartersEmergency Exercise for crash managementPreparations for annual Halloween celebrations

  • RecommendationsUse its low price tickets to drive its competitors out of business and take over their marketBuy more 747 Boeings apart from traditional 737 Airbus for larger capacity and business-class across regionsImplementations of cost saving technology such as internet is needed to lower the operation cost to give customers better deals

  • Practice to continue

  • Thank You!!!