Operations Management at Southwest Airlines
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Case Details:
Case Code : OPEA004
Case Length : 9 Pages
Period : 2003
Organization : Southwest Airlines
Pub Date : 2004
Teaching Note :Not Available
Countries : USA Industry : Aviation
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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.
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Excerpts
Operations
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Southwest's business model revolved around providing safe, reliable, and short
duration air service at the lowest possible fare. With an average aircraft trip
of roughly 400 miles, the company had benchmarked its costs against ground
transportation. But Southwest believed that cost leadership should not dilute
the quality of service. According to analysts, who had been tracking Southwest
closely, the airline's approach had a lot in common with the approaches taken by
cost leaders in other industries. Southwest pursued a blanketing strategy
similar to that of the famous US retailer, Wal-Mart. When Southwest decided to
serve a new city, it typically scheduled flights from the new city to two, three
or even four destinations at which the company had previously established
itself.
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Southwest did not commence a service between any two cities until it was able
to devote the planes and personnel necessary to operate at least five to six
flights a day. Like Toyota, which manufactured small batches of cars in a
cost effective way, Southwest had developed competencies in turning around
aircraft quickly.
Looking Ahead
Southwest planned to add two more nonstop flights between Baltimore and
Houston by 2004. With the additional flights, Southwest would offer a total
of four daily nonstop flights between the two airports.
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Southwest planned to connect with a new daily nonstop service between
Spokane and Las Vegas on January 18, 2004. Southwest also had plans to add
one daily nonstop flight between various cities from April 4, 2004. These
included Chicago midway and Ft. Lauderdale/Hollywood, Chicago midway and
Orlando, Chicago midway and Columbus, Baltimore/Washington and Columbus (A
total of 12 flights daily).
Southwest confirmed, it would start a new service from Philadelphia on May
2004, with daily nonstop service to Chicago midway, Las Vegas, Orlando,
Phoenix, Providence, and Tampa Bay. |
Exhibits
Exhibit I: Southwest Building Blocks of Operational
Efficiency
Exhibit II: Southwest: Anatomy of a 15-minute Turnaround
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