SOUTHWEST AIRLINES - Essay Example

This in turn led to a correction in the industry’s long-haul pricing structure where at times airlines were forced to offer prices lower that their costs. The deregulation of the airline industry in 1978 has been a failure and the airlines are more like public utilities than ordinary businesses (Roberts, 2008). SWA operated out of Texas and was doing much better than the regulated airlines because of fewer regulations in the state. The industry today is full of uncertainties with airlines merger becoming common.

The greatest strength of SWA is its superior asset utilization. Its flight schedule structuring is such that its turnaround is 20 minutes. SWA flies its planes 20 to 30 percent more hours than other major airlines. They have fewer employees per aircraft, fly fewer passengers per employee and have more available seat miles per employee (Pfeffer, 2005). They do not use the standard hub-and-spoke model like most carriers but have the a point-to-point route network and is thus able to minimize the domino effect of flight delays thereby maximizing asset utilization (Kearney, 2008).

Another major strength is highly motivated workforce. SWA achieved success not from economies of scale but the airline is known for its very productive, very motivated and unionized workforce (Bacon, 2001). They encourage individuality and they encourage leadership. The employees always come first with the company and the customers a respected second (Miles & Mangold, 2005). A failure is accepted as natural and pardonable at SWA (Bunz & Maes, 1998). They are encouraged to take responsibility for their acts and celebrate mistakes as well as triumphs.

The culture of the firm and the dedication to the employees sees the airline through any obstacles and challenges (Singh, 2002). The recent soaring of fuel price has disturbed the airlines industry globally. Eight US airlines have gone out of business in less than a year, one is in bankruptcy and many others are