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Southwest Airlines

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Began as a secretary at Southwest Airlines and eventually became SWA President Known for Humanistic Idealistic Sense of Humor Commitment to Customer Servant ... – PowerPoint PPT presentation

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Title: Southwest Airlines


1
Southwest Airlines
2
SWA
Southwest Performance
  • Employees per aircraft much lower than industry
  • SWA 94, United American 160
  • Industry 135
  • Passengers served per employee
  • SWA 2,443
  • Industry 840
  • Customer service
  • Triple Crown winner
  • On-time performance
  • Fewest lost bags
  • Fewest customer complaints

3
Southwest Performance
  • Fewer employees at the gate
  • One agent, ground crew of 6 (SWA)
  • Three agents, ground crew of 12 (Avg.)
  • Quicker aircraft turnaround time
  • 25 minutes (SWA)

4
Southwest Airlines
What is the secret of Southwest Airlines
unbelievable level of performance?
Southwest Video
5
The Southwest Culture
  • SWA values
  • Work should be funit can be playenjoy it
  • Work is importantdont spoil it with seriousness
  • People are importanteach one makes a difference

6
Southwest Airlines Culture
  • They can imitate the airplanes. They can imitate
    the ticket counters and all the other
    hardware..But they cant duplicate the people of
    Southwest and their attitudes.
  • Herb Kelleher

7
The Culture
  • One of FORTUNE s Most Admired Companies
  • FORTUNE has ranked Southwest Airlines in the
    Best Companies to Work For
  • 2005, American Customer Satisfaction Index (ACSI)
    recognized Southwest Airlines as leading the
    industry in customer satisfaction
  • Business Week Top 25 Most Innovative Companies

8
How do we hire the right people?
  • Traditionally staffing has focused on the match
    between an applicants skills and experience and
    the job requirements.

Job Requirements Rewards
Match
Person KSAs Motivation
9
Most Companies
Job Requirements Rewards
HR Outcomes Performance Extra Effort
Retention Satisfaction Commitment
Match
Impact
Person KSAs Motivation
Hire for the Job
10
SWA
Organization
Task Flexibility
Values/Culture
HR Outcomes Performance Extra Effort
Retention Satisfaction Commitment
Career Progression
Match
Impact
Person KSAs Motivation ATTITUDE
Hire for the Organization
11
(No Transcript)
12
Culture Starts at the Top
  • It used to be a business conundrum Who comes
    first? The employees, customers, or
    shareholders? Thats never been an issue to me.
    The employees come first. If theyre happy,
    satisfied, dedicated, and energetic, theyll take
    real good care of the customers. When the
    customers are happy, they come back. And that
    makes the shareholders happy.
  • Herb Kelleher (1996)

13
Strong vision and articulation
Self-sacrificing, risk-taking
Charismatic Leaders
Unconventional, novel behavior
High expectations Build self-esteem in followers
Self-confident, dynamic
14
Herb Kelleher
  • Founder of SWA
  • Zany, crazy approach to management e.g. arm
    wrestling to settle business matters
  • Work should be fun sing, dance, play but get
    the job done.

15
Colleen Barrett
  • Began as a secretary at Southwest Airlines and
    eventually became SWA President
  • Known for
  • Humanistic
  • Idealistic
  • Sense of Humor
  • Commitment to Customer
  • Servant Leadership

We look for folks who are eager, who are quick
on their feet with outside the box thinking
and who have caring, friendly natures.
16
Tribute to Herb and Colleen
  • About Herb and Colleen

17
Gary Kelly
  • Current president, CEO and chairman of the board
  • Long history in SWA culture working with Herb and
    Colleen

Leadership is... "Effectively supporting your
team of Employees."
18
Southwest Key Challenges
  • Fuel hedging a key strategic advantage but
    becoming more difficult each year
  • SWA fuel hedging for future
  • 2007 95 hedged at 50/barrel
  • 2008 65 hedged at 49/barrel
  • 2009 50 hedged at 51/barrel
  • 2010 25 hedged at 63/barrel
  • 2011 15 hedged at 64/barrel
  • 2012 15 hedged at 63/barrel
  • Even with 511 million in favorable cash
    settlements from derivative contracts in the
    second quarter 2008, our economic fuel costs
    increased 35.2 percent to 2.19 per gallon. -
    Gary Kelly

19
SWA-Frontier Airlines
  • Failed acquisition Why??
  • Could it have worked?

20
What are the SWA and Frontier Cultures?
Flexible Processes
CLAN Build interpersonal Relationships
cohesion morale
ADHOCRACY Entrepreneurial innovative Adaptable
risk-taking
External Positioning
Internal Maintenance
HIERARCHY Stability efficiency Rules
regulations Policy development
MARKET Competitive achievement-oriented Goal-fo
cused
Control-oriented Processes
21
SWA Performance
  • SWA vs. SP 500 over 10 years

22
SWA Recent Performance
  • Past 3 months

23
SWA Future
  • What has been SWAs competitive advantage?
  • Can they keep this competitive advantage in the
    future?
  • What does their future hold?
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