southwest airlines customer experience case study

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Southwest Airlines: A Case Study in Great Customer Service

Table of Contents

Southwest Airlines serves over 126 million passengers each year, provides service to 121 airports across 11 countries and has maintained its nearly 72,000-employee roster with no involuntary furloughs or layoffs in its history. In addition to its commercial and financial success, Southwest Airlines is known for its excellent customer service. Southwest has built an impeccable reputation by putting customers first and ensuring its employees are content and financially secure.

This model of exceptional customer service can be extrapolated to fit the needs of almost any industry if you employ strategies that work for your business. We’ll explain why Southwest is so successful as a company and a customer service provider to help other businesses understand and implement its tenets. 

Southwest treats its employees well

Great customer service starts with happy employees. Southwest treats its employees well by backing individual employees’ decisions and providing everyone with quality employee benefits . For example, the company offers a 401(k) plan and matches contributions dollar-for-dollar up to 9.3 percent of the employee’s eligible earnings. It also offers a profit-sharing plan, an employee stock purchase plan, health and well-being rewards, as well as quality medical, vision and dental coverage.

In addition to benefits, Southwest also encourages professional development through in-person and online classes, mentorship programs, and even a Career Mobility Center that supports internal career advancement through advisement sessions and interview prep resources. The company also prioritizes community outreach, encouraging and incentivizing employees to give back to causes that matter to them.

Making employees brand advocates is your best defense against bad customer service.

Southwest makes excellent customer service its mission

According to a mission statement on Southwest’s website, “The mission of Southwest Airlines is dedication to the highest quality of Customer Service delivered with a sense of warmth, friendliness, individual pride and Company Spirit.” 

Southwest outperforms competitors in customer service

In its last survey of the airline industry from 2018, the Temkin Group compared nine U.S. airlines on the quality of their customer experience – the sum of all a customer’s experiences and interactions with a brand. The strategy of focusing on customer experience is built around the needs of the individual customer over the lifetime of the customer-brand relationship.

The Temkin Group’s survey ranked each airline on the criteria of functionality (how well experiences meet customer needs), accessibility (how easy it is for customers to do what they want to do) and emotion (how customers feel about the experience).

Southwest Airlines earned the highest score every year the Temkin Experience Ratings were published from 2011 to 2018, except for 2015. In the most recent rankings, the company received the highest score in the airline industry, 76 percent – 10 percentage points higher than the industry average score of 66 percent. 

Over the years, Southwest Airlines has maintained high ratings among customers, even amid a global pandemic and overall declines in passenger satisfaction. According to the 2023 J.D. Power North American Airline Satisfaction Study , Southwest ranked highest in customer satisfaction for a second consecutive year for the economy and basic economy segment.

How Southwest Airlines emphasizes the customer experience

Southwest Airlines takes the following crucial steps to prioritize the customer experience:

• Southwest offers multiple avenues for customer support. Customer experience is no longer just an in-person interaction or a phone call. It’s now online, in live chat and more. In addition to multiple phone numbers for different customer service issues, Southwest offers live chat (via mobile app), email and a self-help resource center, allowing multiple touch points and opportunities to delight customers .
• Southwest adapts to meet customers’ evolving expectations. The airline invested over $2 billion to improve the customer experience. From improved real-time travel communications to bag tracking to bolstered self-service options, Southwest proactively meets passenger needs to make traveling more convenient and comfortable.
• Southwest empowers employees. Southwest takes care of its employees, which, in turn, helps employees take care of its customers. Providing robust financial and wellness benefits and ongoing career development allows Southwest’s team to perform at its best and effectively support its customers.

Examining Southwest Airlines as a customer service case study can help other companies learn to provide a great customer experience and place customer service at the forefront of their mission and company culture.

How to provide excellent customer service

All businesses should strive to achieve Southwest’s exceptional customer service. However, many of its specific strategies are tailored to the airline industry and may not work for your organization. Here are a few additional methods any business can implement to give its customers the service they deserve.

1. Be responsive to issues.

Nothing is more frustrating than being put on hold for over an hour, especially if you’ve already paid for a product or service. Remember that your customer relationships don’t end after money has been exchanged. These relationships are long-term commitments that must be cultivated over time.

If you don’t have the time to answer calls all day, consider staffing your business with more agents or outsourcing customer service calls. Ensure all customer service reps and outsourced service agents use one of the best CRM software platforms to ensure consistency and informed help. You can also streamline your communication channels and preferences to accommodate as many customer inquiries as possible. For example, it’s easy to set up a chat feature or an FAQ page on your website to avoid being overwhelmed by calls. 

With so many options available to help your customers, there’s no excuse for leaving them in the dark when they have an issue.

2. Communicate beyond complaints.

Responding to problems swiftly is vital to maintaining a high level of customer service, but communicating with your audience shouldn’t stop there. Starting a weekly email newsletter or using X (formerly Twitter) as a customer support channel are great ways to stay in touch with your base.

A simple “thank you for thinking of us” when a customer tags your brand on social media can go a long way. It’s a simple, cost-free measure to set your business apart as one that truly cares about customer service.

Use proven customer service metrics and KPIs like customer satisfaction scores, net promoter scores and customer effort scores to improve your overall customer service.

3. Get to know your customers.

Customers love a personalized experience because it makes them feel heard. However, to ensure the personalized experience stays positive, you should understand the customer’s wants and needs. Maintaining this mindset will help ensure the customer trusts you and your company in the long run.

Almost every customer service representative has some kind of script they must stick to, but there are opportunities to veer off-book and personalize the experience. You could ask customers what they’ve been up to lately or why they chose your company, or just find a way to make them laugh. If you’re willing to go that extra mile, it can be the difference between keeping a customer and losing them.

4. Keep a positive attitude.

When trying to keep a positive attitude toward the customer, it can help to inhabit a service persona. How you speak to your customers can sometimes be more important than what you say. This approach allows you to connect with the customer on an emotional level. You’ll understand their explicit needs and better understand their overall attitude toward you and the company. If you focus on positive thinking and a positive attitude, customers will likely respond in kind.

Danielle Fallon-O’Leary contributed to this article. 

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Case Study: Profitability Takes Flight, Southwest Airlines Unique Business Model Unveiled

Southwest Airlines is a renowned American low-cost airline established in 1967 and has since become one of the industry’s most successful and profitable carriers.

With its headquarters in Dallas, Texas, Southwest operates an extensive domestic network, serving more than 100 destinations across the United States.

Significance of Profitability in The Airline Industry

Profitability is a critical aspect of any business, and the airline industry is no exception. Achieving consistent profitability is a significant challenge in an industry characterized by intense competition, volatile fuel prices, and economic uncertainties.

However, Southwest Airlines has managed to stand out from its competitors with its unique and highly successful business model.

Southwest Airlines’ Unique Business Model

Southwest Airlines was founded on providing customers with low-cost, efficient, and reliable air travel.

From the outset, its founders aimed to differentiate Southwest from traditional carriers by implementing a business model that focused on simplicity, operational efficiency, and a strong emphasis on customer satisfaction.

Critical Elements of the Business Model

Here are the key elements of Southwest Airlines’ prestigious business model:

Low-cost operations

Southwest Airlines has distinguished itself as a low-cost carrier by implementing various cost-saving strategies.

These include utilizing a single aircraft type (Boeing 737) to simplify maintenance and training, operating from secondary airports to reduce fees, and minimizing unnecessary frills such as assigned seating and in-flight meals.

High Aircraft Utilization

Southwest maximizes the utilization of its aircraft by keeping them in the air for a significant portion of the day.

Quick turnarounds, efficient boarding processes, and high aircraft utilization rates contribute to cost savings and increased revenue potential.

Point-to-Point Routes

Unlike traditional hub-and-spoke models that many airlines employ, Southwest’s point-to-point route system allows direct flights between smaller airports, reducing transfer times and increasing operational efficiency.

This approach also enables Southwest to serve niche markets and respond quickly to changing demand.

Customer-Centric Approach

Southwest Airlines places a strong emphasis on customer service and satisfaction. Southwest has built a loyal customer base with its “Bags Fly Free” policy, no change fees, and friendly customer service.

The airline strives to provide a hassle-free and enjoyable flying experience, differentiating itself from competitors.

Efficient Workforce Management

Southwest focuses on building a stable and motivated workforce. The company’s employee-friendly policies and positive company culture have resulted in high employee satisfaction and productivity.

The airline’s efficient workforce management contributes to operational efficiency and cost control.

Case Study: Southwest Airlines’ Profitability

Southwest Airlines has consistently reported profits for several consecutive years, even during industry downturns and economic challenges.

This remarkable achievement sets Southwest apart from many other airlines struggling to maintain profitability.

Factors Contributing to Profitability:

Many different elements are responsible for the continuous progress of the airline. Some of the critical factors that played a crucial role in Southwest Airlines’ profitability include the following:

Strategic Route Planning

Southwest strategically selects routes that align with its business model, focusing on high-demand and high-frequency routes.

This approach allows the airline to optimize revenue potential while minimizing operational complexities.

Cost Leadership and Operational Efficiency

Southwest’s relentless focus on cost reduction and operational efficiency has significantly driven its profitability.

The airline maintains a competitive advantage in the industry by keeping costs low and implementing efficient operational practices.

Revenue Management Strategies

Southwest employs effective revenue management strategies, including dynamic pricing and capacity management.

These strategies ensure optimal seat utilization and maximize revenue per available seat mile (RASM).

Strong Customer Loyalty and Brand Reputation

Southwest’s commitment to customer satisfaction has resulted in a strong brand reputation and customer loyalty.

Repeat business and positive word-of-mouth recommendations contribute to sustained revenue and profitability.

Challenges and Limitations of Southwest’s Model

Here are some challenges and limitations faced by one of the most successful Airlines in the United States. 

Vulnerability to Fuel Price Fluctuations

Like any airline, Southwest is exposed to the volatility of fuel prices. Increases in fuel costs can significantly impact the airline’s profitability, as fuel represents a substantial portion of its operating expenses.

Fluctuations in fuel prices require Southwest to employ effective fuel hedging strategies and closely monitor its fuel efficiency to mitigate risks.

Limited International Presence

While Southwest has been highly successful in the domestic market, its international operations could be more extensive.

The airline primarily focuses on serving domestic destinations, which may pose challenges in expanding its market reach and tapping into lucrative international markets where competition may be fierce.

Potential Risks of Focusing On the Domestic Market

Relying heavily on the domestic market exposes Southwest to potential risks associated with economic fluctuations, regulatory changes, and geopolitical events that could impact domestic air travel demand.

Diversifying its operations to include more international destinations could mitigate these risks.

Southwest Airlines’ Response to Challenges

Fuel Hedging Strategies

Southwest employs fuel hedging strategies to mitigate the risks associated with fuel price fluctuations.

These strategies involve entering into contracts to secure future fuel purchases at predetermined prices, reducing the impact of sudden price increases.

Expansion of International Routes

Recognizing the growth potential in international markets, Southwest has gradually expanded its global operations.

By adding more international destinations to its network, the airline aims to diversify its revenue streams and reduce reliance on the domestic market.

Mitigation Plans for Market Risks

Southwest monitors market trends, economic indicators, and regulatory changes to adjust its operations and strategies proactively.

The airline maintains an elegant approach, quickly adapting to changing market conditions and mitigating potential risks.

If you want to know further, an inclusive case study solution can help you the right way.

Southwest Airlines case study solution , written by experts, lets you take a comprehensive look into the airline’s history, profitability model, challenges, how they tackled them, and many other aspects.

Conclusion:

Southwest Airlines has established a unique and highly successful business model that centers around low-cost operations, efficient utilization of resources, and a customer-centric approach.

Its focus on simplicity, operational efficiency, and customer satisfaction has contributed to its profitability and competitive advantage in the airline industry.

Southwest Airlines’ profitability stands out in an industry often plagued by financial challenges.

The airline’s ability to consistently generate profits can be attributed to its distinctive business model, which enables cost leadership, operational efficiency, and strong customer loyalty.

Southwest’s success serves as a valuable case study for the airline industry. It highlights the importance of innovation, adaptability, and a customer-centric approach in achieving profitability and sustainable growth.

Other airlines can learn from Southwest’s strategies and consider adopting elements of its business model to enhance their own competitiveness and financial performance.

Read more case studies here .

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Southwest Airlines Democratizes Customer Insights With Bloomfire

Southwest Airlines is the largest domestic air carrier in the U.S and employs over 60,00 people. The company was founded in 1976 with the goal to “democratize the skies” and make air travel affordable for everyone. Today, the brand differentiates itself through its customer service and fare transparency. Because customer experience is central to Southwest’s value proposition, it’s essential for their marketing team to understand what their audience wants and needs.

The challenge.

Before 2018, it was challenging for Southwest Airlines’ marketing team members to find customer insights, often taking employees between 30 minutes and two hours to find the information they needed. Additionally, the different marketing teams were siloed, and employees were often hesitant to share ideas across teams. 

Southwest realized they needed to make it easier for team members to find and leverage customer insights so that they could continue innovating and delivering the exceptional experiences customers associate with their brand. They needed a tool that would allow them to centralize their customer insights so that their marketing team could easily find and leverage this information.

We had standing room only training. I think it just shows that people are clamoring to get their hands on a tool like this Sydney Leonard Associate Manager of Knowledge Management, Southwest Airlines

The Solution

Southwest Airlines’ first step in improving their insights and knowledge sharing was adopting Bloomfire, which they used to democratize research and insights across their marketing department. They identified a team of “Knowledge Ambassadors” to act as change agents as the company rolled out Bloomfire. These ambassadors were responsible for answering questions from marketing employees and identifying the knowledge from their team that should be included in the Bloomfire platform. 

The team also promoted a culture of knowledge and insights engagement by hosting a Bloomfire launch party, setting expectations for using the tool to achieve department goals, and modeling the knowledge engagement behavior they wanted to see across the department.

Bloomfire helped Southwest Airlines establish a single source of truth for their marketing department to find information related to customers. The platform also helped break down silos between teams and encouraged marketing team members to share their work and ask questions about others’ work. “It has people thinking in a new way and thinking outside the box,” said Sydney Leonard, Associate Manager of Knowledge Management.

What is a Knowledge Management System?

How to Choose the Right Knowledge Management System

The Importance of Knowledge Management in Customer Service

Start working smarter with Bloomfire

See how Bloomfire helps companies find information, create insights, and maximize value of their most important knowledge.

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Learn more about upgraded WiFi, in-seat power, bigger overhead bins, inflight entertainment, and more.

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Enjoy even more flexibility when you fly Southwest ® with flight credits that don't expire, updates to My Account, and new ways to pay online and onboard.

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Check it. Track it. Relax.

We’ve got it in the bag. Enjoy a more seamless day-of-travel experience when checking your bags with these new upgrades:

New • Pre-check your bags: Next time you fly with us, you can add your checked bags digitally in the app or at Southwest.com ® before arriving at the airport and print your bag tags at the kiosk when you arrive. Doing so will expedite the self-service bag tag process at our kiosks to make checking in faster and easier.

New • Digital bag tracking: With Southwest’s new digital bag tracking, you are now able to track your checked bags from tagging to arriving at your destination.

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We’ve upgraded WiFi equipment on every one of our planes to give you a better in-air experience. More bandwidth and faster data transfer rates mean you can stay connected to what’s important to you at all times. Here’s how:

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More in-seat power to you

Whether you’re keeping the kids entertained, or working to complete an important presentation, more power at your fingertips is always a good thing. That’s why we’ve included in-seat power ports on all new 737 MAX 8 aircraft delivered to Southwest, and why we’ll be adding them to our existing MAX 8 and 737-800 planes in the next few years.

• USB-A and USB-C ports: This means plenty of power to charge your electronics, including phones, tablets, and laptops.
• Ports on each seat back: The illuminated ports are easy to see and easy to use, letting you charge up to two devices at once.
• Zone-based power system: This space-saving system does not compromise legroom.

Larger overhead bins. More room and easier to reach.

All new 737 MAX 8 aircraft being delivered to Southwest feature larger overhead bins. Not only do the new bins provide more room for more carryon items, they’re easier to access when you’re boarding, and grabbing-and-going upon arrival. We’re also making steady progress on refitting the rest of our fleet with these larger overhead bins and expect that process to be complete in the next 2-3 years.

Have a (new) seat and get ready for a whole new experience

We’ve partnered with two of the world’s leading aviation design companies to upgrade your inflight experience. Starting as soon as early next year, you’ll see a refreshed look to our cabins, and enjoy new seats designed to maximize your comfort.

• Refreshed blue cabin interiors: We worked with Tangerine, a leading aviation design company, to develop a more calming and uniquely Southwest design for our cabin, featuring a palette of soothing blue tones.
• New seats, more modern in every way: RECARO, global supplier of premium aircraft seats, collaborated with our Customer Experience teams to design a new seat that’s more comfortable and meets your modern needs. Each seat includes a tablet holder on the seat back, perfect for helping you enjoy inflight entertainment. Plus, our new seats are also aligned—and designed—with our environmental sustainability efforts in mind.

Onboard offerings

From boardrooms to beaches and everywhere in between, no matter your reason for flying, we aim to provide an enjoyable inflight experience. To help make your flight a great one, we're focusing on:

Food and beverage 2

• Improved beverage options: In September 2022, we enhanced our offerings even further by adding hard seltzer, rosé, and more to our alcohol selection 3 , and in July 2023, we added AHA Sparkling Water and Sprite to our non-alcoholic beverage selection. Learn more ›

Inflight entertainment

• Over 100 movies are available in our inflight portal's free-to-watch movie library.

• Check out our latest offerings of Inflight Entertainment here !

• Double the movies: This summer we've doubled the selection 4 and now have over 100 movies available in our inflight portal's free-to-watch movie library.

• Improved movie discovery: We updated our inflight movie page to help you discover more great content to watch.

Airport Experience

New • Easier wayfinding in our airport lobbies: We're making it easier to navigate the airport lobbies with our new airport signage that will direct you exactly where you need to go. We began our launch in June 2023 and will continue to roll out these signs throughout the year.

On the horizon

Get out of line and onto flights with these upcoming online self-service solutions, accessible on your mobile phone, app, or desktop.

NEW • Pre-check your bags: You can now indicate how many bags you plan to check in at the airport. Doing so will expedite the self-service bag tag process at our kiosks to make checking in faster and easier.

NEW • Check it. Track it. Relax. With Southwest's new digital bag tracking, you will be able to track your bag from tagging to arriving at your destination.

Latest arrivals

Over the last year, we've worked hard to put more functionality in your hands with new digital capabilities.

• Additional context to disruption messaging: With better information, you can make better decisions. We are improving the information you receive when experiencing a disruption, including the actions we're taking on your behalf and how to get help.
• Find your flight status more easily 5 : On an iPhone, you can now quickly preview your inbound flight's progress directly from a flight delay text—just tap the flight number in the message. This is in addition to our existing capability to view and share your flight status from our Southwest iMessage app.
• Upgraded Boarding (A1-A15 positions) in our app and website: No more waiting in line at the gate, you can now purchase Upgraded Boarding (when available) 24 hours in advance of your scheduled departure on the Southwest app. You can even upgrade others on your reservation.
• Lap child booking: You can now either check in with your lap child at the self-service kiosk or, if booking with dollars, add a lap child at the time of booking.
• Check in closer to your flight time: We reduced our digital cut-off time for checking into your flight from 60 minutes to 20 minutes to help with last-minute changes or when you just forget.
• Offline mode for our app: This keeps your trip information handy in case you lose internet connectivity.

Flexible flight credits

Flight credits don't expire: Wanna get away ® , but you're not sure when? We're making expiring flight credits a thing of the past. Now flight credits are just like Rapid Rewards ® points: they don't expire. Your flight credits are yours to keep.

Transferable Flight Credits ™ 6 : Select fares now include Transferable Flight Credits, allowing you to make a one-time transfer to another Rapid Rewards Member. Look for this benefit on our Wanna Get Away Plus ® , Anytime, or Business Select ® fares. Transferable Flight Credits don't expire.

Updates to change and cancel

We get it - sometimes plans change. We're making it easier to go with the flow with updates to our change and cancel process. These include:

• The ability to cancel one leg  of your round trip flight.

• Allowing first and middle name corrections for existing flights.

• Change your flight, not everyone's: The ability to change an individual's flight selection without changing the whole group's reservation is now available on our website and app.

New • Flexibility during disruptions: We're working to empower you with more options to change a flight during a disruption, including making more than one change to a disrupted flight, or even changing your flight to a nearby airport for select airports.

Updates to My Account

My Account is your one-stop-shop for managing your booked travel:

New • Mobile My Account: We are working to bring all the features of your account from our full website to your mobile devices. You will soon be able to view your status, promotions, and points activity in one convenient place.

• Frequent travelers: Our new frequent travelers feature allows you to store information for the people you travel with most and quickly add their information while booking.

• Flight credits: You can now view your unused flight credits, check your flight credit balances, and buy and change flights using your flight credits, gift cards, or Southwest LUV Vouchers ® on any device, desktop or mobile. On our desktop website, you can also now link unused and available flight credits to your account.

Payment flexibility

Pay your way online or onboard with flexible payment options:

• While booking: We've simplified paying for travel with our flexible payment options including Apple Pay, Uplift, and PayPal, currently available across our online experiences. 
• Inflight: We were the first domestic carrier to accept Venmo for inflight purchases. In addition to paying with credit cards, you can now make inflight purchases with Venmo, Apple Pay, and PayPal, making searching for your wallet onboard a thing of the past.

The aforementioned investments were included in the Company's five-year annual targets through 2026 for operating costs and capital spending provided at its Investor Day in December 2021—annual inflation in operating expenses per available seat mile (CASM, or unit costs), excluding fuel, profit-sharing, and special items, in the low single digits range, and average annual capital spending of approximately $3.5 billion.

All Rapid Rewards® rules and regulations apply and can be found at Southwest.com/rrterms . 1 First and second checked bags. Weight and size limits apply. 2 On flights less than 175 miles, food and beverage service will be limited to water only. 3 Must be 21 or older to consume alcoholic beverages. 4 As of May 2022, there are 56 movies in our library. 5 iOS Customers only, branded by Apple as “Preview Flight” 6 Transferable Flight Credit ™ allows you to transfer your flight credit to someone else. Both must be Rapid Rewards ® Members and only one transfer is permitted. For bookings made through a Southwest ® Business channel, there is a limitation to transfer only between employees within the organization.

Cautionary Statement Regarding Forward-Looking Statements This news release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Specific forward-looking statements include, without limitation, statements related to (i) the Company's expectations with respect to enhanced WiFi and other Customer Experience enhancement initiatives; (ii) the Company's expectations regarding expenditures in connection with Customer Experience enhancement initiatives; (iii) the Company's expectations with respect to its new fare category; (iv) the Company's expectations with respect to investments in its workforce; (v) the Company's expectations with respect to travel recovery; (vi) the Company's fleet plans with respect to updated WiFi, power ports, and bin space; (vii) the Company's expectations with respect to Starlink; (viii) the Company's expectations regarding Customer self-service capabilities; and (ix) the Company's expectations regarding its onboard menu. These forward-looking statements are based on the Company's current estimates, intentions, beliefs, expectations, goals, strategies, and projections for the future and are not guarantees of future performance. Forward-looking statements involve risks, uncertainties, assumptions, and other factors that are difficult to predict and that could cause actual results to vary materially from those expressed in or indicated by them. Factors include, among others, (i) the Company's dependence on third parties with respect to the Company's initiatives, strategies, expectations, and goals, and the impact on the Company's operations and results of operations of any third party delays or non-performance; (ii) any negative developments related to the COVID-19 pandemic, including, for example, with respect to the duration, spread, severity, or any recurrence of the COVID-19 pandemic or any new variant strains of the underlying virus; the effectiveness, availability, and usage of COVID-19 vaccines; the impact of government mandates, directives, orders, regulations, and other governmental actions related to COVID-19 on the Company's business plans and its ability to retain key Employees; and the extent of the impact of COVID-19 on overall demand for air travel and the Company's related business plans and decisions; (iii) the Company's dependence on its workforce, including its ability to employ sufficient numbers of qualified Employees to effectively and efficiently maintain its operations; (iv) the impact of fears or actual outbreaks of other diseases, extreme or severe weather and natural disasters, actions of competitors, fuel prices, consumer perception, economic conditions, fears of terrorism or war, socio-demographic trends, and other factors beyond the Company's control, on consumer behavior and the Company's results of operations and business decisions, plans, strategies, and results; (v) the Company's ability to timely and effectively implement, transition, and maintain the necessary information technology systems and infrastructure to support its operations and initiatives; (vi) the impact of governmental regulations and other governmental actions on the Company's business plans and operations; and (vii) other factors, as described in the Company's filings with the Securities and Exchange Commission, including the detailed factors discussed under the heading "Risk Factors" in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2021.

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Southwest Airlines Is Playing with Brand Fire

• Adam Richardson

Southwest Airlines is often used as a case study for a well-run business: it’s consistently more profitable than its competitors, it’s very disciplined about how it operates, and its customers are happy. It also has a strong brand, built on the promise of low prices, convenience, and a no-frills-but-pleasant experience. But recent actions are starting […]

Southwest Airlines is often used as a case study for a well-run business: it’s consistently more profitable than its competitors, it’s very disciplined about how it operates, and its customers are happy. It also has a strong brand, built on the promise of low prices, convenience, and a no-frills-but-pleasant experience. But recent actions are starting to erode the brand and customer happiness, potentially creating a long-term risk.

• Adam Richardson is a creative director at the global innovation firm frog design and the author of Innovation X: Why a Company’s Toughest Problems Are Its Greatest Advantage . His background combines experience in product development, product strategy, and customer research.

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A unique take on Southwest Airlines Strategy

Anyone who has studied business management either as a degree or as an elective would have definitely studied Michael Porter’s 5 Forces framework. This framework was first published in  Harvard Business Review  in 1979. The model is very much relevant in 21st-century business as well due to its deep 360-degree view of a business.

One of the 5 forces is called “Barriers to Entry” and more often than not either Oil & Gas or Airline industry would serve as an apt example of an industry with very high barriers to entry due to its high Capex and Opex requirements.

But wait, then with so many barriers to entry, why do airlines still bleed red? There are many reasons for this, but one of them is stiff competition with low-cost carriers, the 5th, and the framework’s central force (competition among the players).

Before we move on, the below is an interesting tweet response from Anand Mahindra, on being asked to buy the ailing “ Jet Airways ”.

Remember the quote: “If you want to be a millionaire, start with a Billion dollars and then start (buy) an airline!” https://t.co/dYRdwup3kK — anand mahindra (@anandmahindra) June 29, 2019

The US Airline Industry

Following the 9/11 attacks, the US airline industry has been through rough weather. 20+ airlines have filed for bankruptcy protection under Chapter 7. 60+ airlines have filed for bankruptcy protection under Chapter 11.  This list also includes the top 3 out of 4 airlines namely, American Airlines, United & Delta Air Lines, however they were able to exit the bankruptcy within a few years.

The landscape has been constantly changing with a high volume of mergers and acquisitions, resulting in changing market share statistics.

The graph above covering the period January to December 2020 showcases that the top 4 airlines constitute approx. 65% of the market share.

In this story, we are focusing on Southwest Airlines that was founded on the notions of the low-cost carrier but with its unique strategy has been profitable for the last 45 years in a row. 

The takeoff strategy of Southwest Airlines

Southwest Airlines Co. , typically referred to as Southwest, is one of the United States’ major airlines and the world’s largest low-cost carrier airline. The airline was established on March 15, 1967, by  Herb Kelleher  as Air Southwest Co. and adopted its current name, Southwest Airlines Co., in 1971, when it began operating as an intrastate airline wholly within the state of Texas first flying between Dallas, Houston and San Antonio. 

Most airlines back in the 1960s followed the most popular “Hub and Spoke” model for their operations.

Hub and Spoke model – As the name suggests, there is a defined hub from where the flights originate, and the destinations are the spokes.

The benefit of a hub and spoke model is that it has fewer routes, but the major drawback of this model is its rigidity, and if there is a slight change in the airline routing due to weather, etc., it can have cascading consequences to the other planned flights.

Point to Point model – Southwest, being a low-cost carrier, focused more on the point to point model and bought significant process improvements, in a way mastered it to achieve very high operational efficiency.

In the point-to-point model, each flight is a single journey. The origin and destination are connected via a single non-stop flight. The point-to-point model offers more travel options and flexibility as compared to the hub and spoke model.

For passengers undertaking further journeys, they will have to collect the baggage and recheck them for leg 2 of their journey. This model has considerably led to saved travel hours and done away with the necessity for connecting flights.

Key Differentiating Factors in Southwest Airlines Strategy

Southwest airlines is the third largest airline in the United States of America and arguably the biggest in the low-cost carrier segment across the globe.

So, was the operational efficiency gained due to the change in the flight operations model the only reason why Southwest airlines is the #1 low-cost carrier in the world?

NO, let’s understand what differentiated Southwest airlines strategy from its counterparts.

Customer Eccentricity

For Southwest, they keep the customers at the center of their business operations. They offer certain benefits to flyers which are not offered by other airlines, like

• Southwest allows two checked-in bags, free of cost, unlike many of its competitors.
• Flight change thirty minutes prior to the departure is allowed by Southwest.
• Southwest offers free in-flight entertainment like Live TV, Movies, use of whatsapp and imessage. It offers Wi-Fi services at very nominal rates.

All these have resulted in Southwest being the airline with the least number of complaints, according to the Department of Transportation of the United States of America.

Only one type of aircraft

Many airlines have different types of aircraft in their fleet, but not Southwest. Southwest operates by using only Boeing 737 aircraft. It saves a lot of money by:

• Training cabin crews and support staff on only one type of aircraft.
• Maintenance of inventory of spare parts for one aircraft type.
• In case of breakdown, alternate aircraft can be arranged immediately.
• Its policy of not assigning seats helps tremendously as customers can take any available seat when boarding the aircraft, thereby reducing the boarding time. In the case of alternate aircraft also, this policy hugely benefits the airline reducing the turnaround time.

Right recruitment policies

Southwest stresses a lot on the customer experience and hence it is very imperative for the airline to hire the right kind of people. Southwest focusses on hiring people who have an attitude for serving customers.

Employees undergo various pieces of training which also includes cross-training. Training is heavily centered around team building and collaboration.

The Southwest Airlines case study is a lesson in cultural strategy. An organization built on the fundamentals of customer eccentricity, effective processes, and a dedicated team is meant to achieve success and overcome challenges. This model of exceptional customer service can help a business earn an impeccable reputation in the industry. That’s what makes the Southwest model uniquely priced, yet one profitable in this cruel airline industry.

Southwest’s ability to be different and not follow the herd—not to mention becoming America’s largest airline—can be traced in large part to the Airline Deregulation Act. Thanks to this act, Herb and Rollin realized their Vision and the traveling public benefits on every flight, every day. Gary Kelly, Chairman & CEO, Southwest Airlines

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Vinit Joshi is Corporate Planning & Strategy professional with 15+ years of experience across renowned & diversified business groups. When not working or spending time with family, Vinit loves listening to a variety of music

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Southwest Airlines Reveals 5 Culture Lessons

Despite the tragic incident on Southwest Airlines Flight 1380 on April 17, 2018, the culture of the Best-Loved Airline ensured that the accident did not tarnish its reputation. The 1380 flight crew, in an interview on CBS News , attributed their success in safely landing the plane to their shared values.

Although the crew didn’t mention a specific core value, Southwest’s Servants Heart was evident throughout all the actions taken after the accident, from Captain Tammie Jo Shults walking the aisle and speaking to every passenger once the plane was safely landed to the heartfelt message from CEO Gary Kelly.

In an era of general consumer contempt for the airline business, it is heartening to see that one airline, Southwest Airlines, is walking its talk and living its cultural values. The overall attitude of the company can be best summarized by the airline’s co-founder and Chairman Emeritus Herb Kelleher, who said: “The business of business is people.” Even though the company honors and values all people involved in its business – employees, customers, suppliers/vendors, and shareholders – the company puts its employees first.

Southwest Airlines recognizes that treating its employees well creates happy customers , which results in financial success. The outcomes of this formula are shown in the company’s outstanding business statistics, which include:

• 4% voluntary turnover
• 44 consecutive years of profitability
• #1 lowest number of customer complaints
• 85% employees say they’re proud to work for Southwest
• No layoffs, no furloughs ever

What other US airline can boast these same results? It’s no wonder the industry is talking about how Southwest Airlines treats its employees.

I was fortunate to have been invited to attend Southwest Airlines Culture Connection in December 2017 in Dallas, Texas. It was a half-day event that showcased the company’s methods of strengthening, reinforcing, and maintaining its strongly positive culture . I applaud Southwest Airlines for offering this twice-yearly “peek under the covers” of their workplace culture at no cost to the attendees. In contrast, Zappos and Disney charge fees to attend similar events they host.

I want to share a Southwest Airlines culture case study. Here are five lessons learned from Southwest’s Culture Connection day:

1. Evolve your culture.

Southwest Airlines has been in existence for over 50 years, and it started without explicitly articulated values but a shared sense of what the Southwest culture was.

About ten years ago, the leaders decided to formalize their workplace culture by identifying six values they wished to honor. They have created a department of Culture Services, whose mission is to retain focus on company values, the employees, and “low cost,” which is one of the company’s values. One way they remind employees of the culture is through “Culture Blitzes,” in which a Culture Services team visits an airport and touches every Southwest employee there with food and fun.

The team even cleans the planes for the flight operations employees.

2. Equip “leaders,” regardless of what position they have.

Leaders are recognized at all levels of the company hierarchy, not just at the top of the hierarchy. At the Culture Connection event, we saw a video of a baggage handler who plays the ukulele for passengers when he has a moment to spare. As he said, “No one can frown when you’re listening to a ukulele.” His leadership is celebrated in the video.

Leaders and high potential associates attend extensive leadership training, up to three weeks at a time, and are exposed to the company’s managerial best practices and what they call the “way we do things around here.” Leaders are encouraged to know about their employees’ needs outside of the workplace and are given authority to spend money to care for associates in ways such as sending flowers after a death along with sending Southwest-branded baby items to an employees’ newborns.

3. Empower and appreciate employees .

When the company needed new uniforms for their flight attendants, they recruited a task force of flight attendants to help design the uniforms. When customers use social media or other means of communication to compliment an employee, Southwest’s team of responders, in turn, forwards the compliment to the employee directly and their boss. In fact, Southwest receives over 7,000 of these kinds of compliments a month!

Another way the company encourages employee acknowledgment is through peer to peer recognition. With this, the company created a system which encourages employees to give “points” to colleagues. In turn, with these “points”, employees can purchase from a catalog of items that the company provides.

4. Model the way

Executives and managers are fully expected to lead the way with their behavior in the workplace. To reinforce this idea, executives are video-recorded telling personal stories that illustrate the values and spirit of Southwest Airlines. In turn, managers coach associates who fail to live out the values and expected behaviors of the organization, while many newer hires simply self-select out of the system when they recognize that their behaviors don’t conform to the prevailing Southwest culture.

5. Design the physical space to enforce culture.

At Southwest Airlines’ headquarters in Dallas, Texas, the office has been recently redesigned around “culture centers” on each of the floors. Each center highlights one of the company’s values and provides break services (coffee and kitchen facilities), meeting rooms, and quite a bit of color, photos, and flair to demonstrate that particular value. Different departments, such as accounting and marketing, are clustered around the centers, encouraging communication and chance encounters between employees across departments.

When it comes to Southwest Airlines’ culture, facts seem to support the stories. Theirs is a role model for other companies. The airline’s success demonstrates the need for a strong and vibrant company culture that puts its employees first.

Let’s all take a lesson from them. When you learn from the best, you become the best!

Southwest Airlines

Lean-agile transformation with safe ®.

Southwest Airlines is famous for its employee-first culture, dedication to customer service, and sense of warmth, friendliness, and fun. And when it comes to meeting the urgent demands of technology development in a highly complex logistical environment, a thriving culture is just the start to meeting the challenge.

To live up to Southwest’s purpose of connecting people to what’s important in their lives through reliable, low-cost air travel, Southwest began its Agile transformation in 2018 in operations. The fantastic results led to SAFe ® adoption throughout Southwest.

Now four-plus years into their Agile transformation, more than 2,000 Southwest employees collaborate cross-functionally across the organization.

Quick Facts:

• Operates at more than 120 airports across 11 countries worldwide
• Carried 126 million customers in 2022
• Operates more than 4,000 flights per day during peak season
• Started SAFe transformation in 2018
• More than 2,000 employees involved in SAFe across reservations, customer experience, crews, scheduling, training, aircrafts, ground operations, maintenance, and more

Key Outcomes:

• Streamlined the number of steps and handoffs between business and technology and made them more predictable, saving time and money.
• By adopting SAFe at the portfolio level, Southwest went from 7–9 months of planning in 2017, plus variable building, testing, and deploying timeframes (see timeline below) to releasing every iteration in 2020 
• From 2018–2020, they saw increased deployment success and 5x faster time to market  (28 releases with 45% deployment success in 2018, to 349 releases and 93% deployment success in 2020)
• Experienced better alignment around business value while measuring greater than 80% of business value delivered

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How Southwest Keeps Making Money In A Brutal Airline Industry

It seems as though the airline industry is in a perpetual state of crisis.

While virtually every major U.S. airline has declared bankruptcy in the past 10 years, Southwest Airlines has remained solvent and has consecutively generated a profit for the  past 39 years .

How do they do it? Their mantra seems to be "keep it simple," having mastered the art of cost-cutting, reports Seth Stevenson at Slate .

Here are some of the strategies employed to keep operating costs low: 

Having one type of aircraft

Southwest's fleet is comprised of one type of aircraft: the Boeing 737.

“We only need to train our mechanics on one type of airplane.We only need extra parts inventory for that one type of airplane. If we have to swap a plane out at the last minute for maintenance, the fleet is totally interchangeable," VP of ground operations Chris Wahlenmaier told Slate.

Related stories

Using a point-to-point routing system

Another cost-cutting tactic? Forgoing the popular hub-and-spoke model, which can lead to delays in the event of inclement weather or scheduling conflicts.

Instead, Southwest uses a point-to-point routing system; with this strategy, passengers deplane the flight and, chances are, the aircraft will turn around and fly back to its starting airport.

Putting a premium on customer service

Perhaps Southwest's real strategy for success lies in its customer service practices. There's no first class, nor is there assigned seating, which means no wait for your section to be called before you're allowed to board.

At a time when many airlines are applying (often obscene) surcharges to check bags, Southwest allows two pieces of checked luggage per ticket. Another added perk? Your luggage will likely greet you on the other side, as Southwest boasts a 99.6 percent completion rate on bags.

While Southwest remains the most consistently profitable of all U.S. carriers, they still are not immune to the realities of today's economy. According to USA Today, in April Southwest posted an adjusted first-quarter loss of $18 million due to rising fuel costs.

CHECK OUT: The Best and Worst Airlines in America

• Main content

Rewards Case Study: Southwest Airlines Rapid Rewards

When it comes to choosing the perfect airline, there’s no shortage of options for U.S. travellers. With 18 U.S companies considered “major carriers” , competition in the travel industry is fierce.  As a result, customer retention is  more critical to staying in the air than ever before. In an industry this competitive, how do airlines keep customers coming back, flight after flight?

Dallas-based carrier Southwest Airlines seems to have found the answer. Known for their affordable fares and excellent customer service, Southwest is setting the stage for customer loyalty with their Rapid Rewards loyalty program.  Launched in 1987, the program aims to enhance the customer experience for Southwest’s frequent flyers, and they seem to know what they’re doing!

In 2016, Rapid Rewards took home loyalty “Program of the Year” and “Best Customer Service” at the 28th Annual Freddie Awards , a ceremony that recognizes the most prestigious loyalty programs in the travel industry. It’s clear that Southwest knows what their customers want out of a rewards program : a no-fuss experience that makes flying simple and rewarding. However, it’s not all a first-class flying experience.  While this program has a number of exceptional features it also has some areas to improve. Let’s start by looking at the positive features of Rapid Rewards that keep members flying high.

The Take Off: Why Rapid Rewards Succeeds

When you line them up with their competitors, it’s not really surprising that so many customers choose Southwest and their Rapid Rewards program. The incredibly straightforward redemption process, member-friendly program rules, and variety of ways to redeem points are only a few of the reasons why Rapid Rewards is an award winning program.

Rapid Rewards is Easy to Use

Southwest Airlines knows that planning a trip is already complicated enough for travellers. Why further complicate the process with a rewards program that’s not easy to navigate?

On the Rapid Rewards website , there are a number of easy-to-spot navigation tabs that will immediately answer all of your questions about the program. These include an “about” section and details on how to earn and redeem points, as well as information about the program’s tiers and partners.

Using a simple checklist, the “about” tab walks customers through a program overview that clearly states the benefits of membership through a combination of easy-to-read text and branded visuals elements.

Once you’ve signed up for a Southwest credit card, flying isn’t the only way you’ll be earning points. Purchases made directly with the airline, hotels, car rental purchases and ALL other purchases made with your card will take you one step closer to redeeming the reward that’s right for you.

They make the redemption process just as easy.  In fact, it’s so simple that it can be explained in 2 minutes (quite adorably) by young Juliette, the daughter of a  Rapid Rewards member:

Southwest Airlines doesn’t stop there, though.  While others might have been content to contain their program to desktop devices, Southwest makes it clear that their rewards experience is accessible on mobile devices, too. No desktop computer to access the program? No problem - the Southwest Airlines application for iPhone and Android provides a full mobile experience to Rapid Rewards members, allowing the redemption of points through a handheld device.

In addition to Rapid Rewards access, the app also allows users to check in to flights, access helpful airport information, and view their flight status - among other features. Clearly this program is prepared for the impact of mobile commerce as users migrate from desktops to devices.

Overall, the ease of use of the Rapid Rewards program helps simplify the flying process for members, providing a positive experience that keeps customers coming back.

Rapid Rewards Has No Blackout Dates or Point Expiration

Two of the biggest selling features of the Rapid Rewards program are the fact that there are no blackout dates for flight redemption and that points accrued do not expire while the card is in use.

Blackout dates - otherwise known as dates in which rewards are not available to be redeemed for travel - are extremely frustrating for reward members. This is largely because blackout periods tend to be during holidays and peak seasons, otherwise known as when everyone wants to travel - best customers included.  Who wants to spend the year collecting points for the perfect holiday getaway, only to find that their annual Maui Christmas vacay falls within a blackout period? Removing blackout dates gives Rapid Rewards members the freedom to choose their rewards on their own terms.

In addition to the removal of blackout dates, the Rapid Rewards program allows members to continue accruing points without expiry, as long as the card remains active within a two year period. This is particularly important following the 2016 Air Miles point expiry scandal , where thousands of members lost their trust in Air Miles and transferred their loyalty to different programs. This scandal reinforced the importance of no-expiration policies on loyalty points -- a program feature that Southwest has boasted since 2011.  This makes it clear that Southwest is not only ahead of the curve, but also determined to keep themselves leading the fleet.

Rapid Rewards Has A Variety of Ways to Redeem

Not everyone values the same rewards , and Southwest understands this. That’s why the Rapid Rewards program offers something for everyone! Whether you’re a frequent flyer who prefers to save up points for wintertime getaways, or an avid camper who values the perfect fireside lawn chair, there are rewards designed for you.

In addition to miles for flights, members have the opportunity to redeem their points balance to book hotels, secure car rentals, purchase gift cards, attend concerts, or browse through thousands of products in their “More Rewards” section. Between Earning points from every flight you book and every credit card purchase you make with Southwest partners, it won't be long until you’re redeeming points for your ideal reward!

Offering a number of different rewards to members makes them feel like their desires are considered and appreciated, while also increasing the value of the program itself. It feels great when a company you’re loyal to is aware of the rewards you’re interested in, and motivates you to work toward them!  For this reason, Southwest Airlines has proven to be an airline that truly understand where their customers are coming from (and traveling to!).

Where There's Turbulence: Features Rapid Rewards Can Improve

While Southwest Airlines might have developed a rewards program that keeps customers coming back, there are areas of Rapid Rewards that could be improved to create a better customer experience.

Rapid Rewards Has High Barriers to Entry

To join the Rapid Rewards program, you are required to apply for a Southwest Airlines VISA credit card. With the option to apply for the Plus Card at $69 per year or the Premier Card at $99 per year, being a Rapid Rewards member is anything but free. This pay-to-join approach is similar to the popular Costco Membership , which also comes with an annual fee.

For me, this is the biggest barrier to entry in joining a loyalty program. While many successful rewards programs have an annual fee to join , the cost of adding yet another credit card to my wallet may be higher than the rewards are worth.

An alternative for Southwest Airlines would be the introduction of a free loyalty card that allows frequent flyers to collect points over time but requires more of them to redeem high-ticket items. While this would change the structure of the program drastically, it may result in more loyal Rapid Rewards members. For customers who fly with Southwest because of their low-cost alternatives, a pricey loyalty program may not align with the consumer perception of what the brand stands for.

Rapid Rewards Points Don't Have a Fixed Value

The Rapid Rewards program operates using a fare-based points system . This can be both a blessing and a curse for members. While a discounted flight will require less points  to redeem, it also means that members will have to watch redemption offers closely if they want to get the most value out of their points.

Let’s look at an example:

Say you’re planning on taking your family to Disney World this summer and have been accumulating points for 6 years to make it happen. You see redemption values of 1.9 cents per point on January 7th, 2018, but you hold off just in case the cost of the flight continues to drop. The next day, the cost of the flight has gone up -- and so has the redemption value. Your hard-earned points are now worth 1.25 cents each, and that trip seems less attainable than ever before.

I know that I wouldn’t be very happy in this situation, and I’ll bet other rewards members aren’t, either.  When customers are left in the dark about the value of their points, they lose all motivation to earn them.  After all, who cares about earning something with no perceived or understood value?

To resolve this issue, it would be helpful for Southwest to provide frequent updates on the value of their rewards to members in order to help them receive the best deal possible for their hard earned points.  This type of communication could be easily included in a members newsletter or email marketing campaign , and could have a significant impact on overall customer satisfaction and program engagement.

Rapid Rewards Has a Confusing Tiered Program

While tiered programs are an extremely effective system for developing customer loyalty, it’s important that the qualifications for each level are clear in order to motivate customer participation. The Rapid Rewards program lacks a clear-cut description of how each status is achieved.  Is it through the application for a Premier Southwest credit card, qualifying flights, or points from purchases? How is a qualifying flight defined? Do “points” and “tier bonus points” have a different value?

Turns out, I wasn't the only one who had trouble understanding the tiered program. On Southwest discussion boards, many of the questions from customers were related to the tiered programs and their benefits.

Because there are so many limits on what kinds of points count toward tiered status and the associated benefits, members of the Rapid Rewards program could spend years collecting the wrong points.  As a result, they will likely be confused about why they aren't receiving the rewards they believe they’re entitled to when they go to cash in.

If we look at the expectancy theory of customer motivation, it’s clear that the instrumentality component is missing here:

If achieving tiered status is the “particular outcome” and spending thousands of dollars to accumulate points isn’t considered “successful performance”, loyal customers may question their connection to a brand. If Southwest provided a straightforward description of their tiered program and made its qualifications easy to understand, Rapid Rewards could be leveraged more effectively to enhance the experience for all members of the program.

Overall, Rapid Rewards is a First-Class Rewards Program

While the Rapid Rewards rewards program may require a significant investment in terms of your finances and time, membership is sure to pay off. For frequent flyers and thrill-seekers alike, Rapid Rewards provides everything a great retention program should : an easy to use interface, policies created with the member in mind, and a number of ways to redeem.

With a rewards strategy like Rapid Rewards, it’s no surprise that Southwest is known for their amazing customer service . Rapid Rewards reinforces the company’s commitment to their customers, and with it, Southwest is sure to continue taking members to cloud nine.

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• Programs & Tools

Brand Case Study [Southwest Airlines]

Few brands ever achieve Cult Status, and no brand in the airline industry can boast a cult following quite like Southwest Airlines.

From a small interstate airline operating out of Dallas Texas where the brand was born back in 1967, Southwest now services over 100 destinations across North America and The Caribbean.

A story of hot pants, whisky, peanuts, caring and some light-hearted humour, this article breaks down the Southwest Airlines Brand in this  case study .

The Brand History

The history of Southwest  began in 1967 at a hotel bar in San Antonio, Southwest founders Herb Kelleher and Rollin King took out a napkin and scribbled three points of a triangle representing their novel idea.

An airline that would connect the three main cities of Texas; Dallas, Huston and San Antonio.

For 8 years from 1971, Southwest Airlines operated as an interstate only carrier.

It wasn’t until 1979 when U.S. President Jimmy Carter deregulated air travel in the USA, did Southwest really take off.

40 years later, the Southwest Brand has  achieved cult status  with its customers with a low cost, low stress no nonsense approach to air travel, which has seen it grow to become the largest airline operating in the U.S.

But how did it get there. What makes Southwest so different to all the other airline brands out there and why do their customers love them so much?

Case Study: Brand Positioning Strategy

When the founders of Southwest were sitting in that bar in San Antonio, their conversation about what would make them different centred on pricing.

Founder Herb Kelleher summed up their position succinctly when he said

I can teach you the secret to running this airline in thirty seconds. This is it: We are the low-fare airline

Low cost pricing as a standalone strategy is nothing new and never tends to last long, but they weren’t selling a commodity that was easily picked up and sold at a cheaper price.

They were building an airline from the ground up and  integrating this positioning strategy  into every single decision of operations making it next to impossible for existing, more established airlines to replicate.

Their deliberate decision to stock their fleet with only Boeing 737’s had a dramatic impact on their operating, maintenance and staff training costs that was unparalleled.

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A Competitive Brand Advantage

From the early days in Texas, Southwest has run a tight and efficient ship through their business operations.  A competitive advantage they’ve never relinquished .

Where the airline has really excelled however has been through a deep focus on customer experience, low-cost pricing and logistics solutions.

But Southwest is not all love cuddles and peanuts.

Their  outside the box thinking and innovation  has moved the industry forward and their  development of company culture has positioned them as an airline their motivated employees believe in.

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Helpful brand personnel.

We’ve all had bad experiences with air travel.

Having emigrated to Australia in 2001, I have traveled back to my home country of Ireland more times than I can remember so I’m well versed on how airline staff impact the travel experience.

Some make you feel like you’ve asked them to walk over hot coals when all you’ve asked for is an extra pillow, while others make you feel like they’d actually walk over hot coals for you.

Southwest understands this gripe and  has gone to extraordinary lengths  to make sure the people they hire are aligned with the brand experience.

Helpfulness is a core value of the brand and  ensuring their employees are the most helpful in the industry has given them a distinct advantage.

A Flexible Brand Experience

The Southwest Airlines leadership are people who understand the stresses of air travel and  make it their business to reduce that stress wherever possible .

To put it simply, Southwest  make flying easier .

Traditionally, the airline industry is full of red tape and “Gotcha” terms and conditions that sting customers for anything outside the “Buy your ticket and get on the plane” model.

At Southwest, policies and procedures have been softened at every corner including a cancellation policy that would make other airline CEO’s look like they were sucking a lemon.

You want to cancel your flight 30 minutes prior to take-off? No Problem.

Pricing Less And Rewarding More

More often than not, a better overall brand experience is a differentiation strategy that  comes with a premium price .

And it makes sense. If you want the best services you can’t expect to pay the lowest price. Price and quality are the usual trade-off.

Not only do Southwest offer one of the best experiences in the business, they do it with the lowest prices which is a brand advantage accessible to them via their low operating cost strategy.

Compared to their closest competitors such as  Delta Airlines  and  American Airlines  Southwest’s pricing is  far more affordable .

But Southwest doesn’t stop there. On top of the savings they afford their customers, they also lavish gifts on them through  one of the best rewards programs in the industry .

It’s no wonder their brand loyalty soars so high.

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A Nimble And Innovative Brand

Southwest’s flexible business model allows the airline to  stay ahead of the curve with nimble decision-making and forward thinking .

Always focused on customer experience, the airline regularly upgrades its fleet of airplanes and expands its army of loyal followers and service destinations.

Case Study: Target Market

Commercial airline travel emerged after the Second World War though this wasn’t an inexpensive experience.

There were multiple classes including luxurious lounges where three course meals were served on bone china with champagne in crystal glasses.

Air travel up to the late 60’s was an exclusive luxury reserved for those who weren’t short of a dollar.

When Southwest emerged, they shook up the industry as the first “Budget Airline”.

An Everyday Target Audience

So, who is Southwest’s  Target Market ?

Cost-conscious, no-frills travellers looking for the best value for their dollar.

Air travel wasn’t just for the wealthy anymore. Southwest expanded the market by slashing costs and today Southwest’s target audience includes

Young travellers

Businessmen and Women

Frequent Flyers

Holiday Makers

They’ve distances themselves from exclusivity and the segment that expects it and have masterfully appealed to their audience by focusing on what’s important to them.

Low cost, simplified air travel with a pleasant experience.

Case Study: Brand Messaging & Marketing

Although their low-cost position put Southwest on the map, it’s not what has keep them there.

Today, budget airlines have flooded the market and have become a pain-point in-and-of-itself for many seasoned travelers.

The cost-cutting model has become so intense that bag size arguments and hairdryer unloading have become common scenes at check-in gates the world over.

This is why the other angle of their market position focus on the customer experience and their messaging is such a breath of fresh air.

Brand Language & Tone

Southwest isn’t like other airlines . They don’t speak with a robotic corporate voice with overly corporate language and tones.

Southwest has such high brand advocacy rates because they are a brand of people, speaking to people, making connections just as people do.

Modern  brands are human brands and there a few examples better than Southwest Airlines

The Social Branding Approach

Southwest started a 30-person “Social Business” department in 2015 that has become a  central figure across the entire business operations .

This social department has made the brand seem  even more human and approachable  as it’s used for everything from customer service to marketing to crisis management.

In 2016 the airline  suffered a massive technology failure  causing thousands of flights to be cancelled and an inevitable barrage of complaints from some of the 250,000 unhappy customers.

The  social team worked relentlessly to respond as many customer complaints as possible, which were all loaded with authenticity and humility.

We're so sorry to hear about the cancellation and we cannot thank you enough for your patience with our services today. ^AC — Southwest Airlines (@SouthwestAir) July 22, 2016

Branding With Human Emotion

Let’s face it. When we think of airlines we don’t tend to get become overcome with affection because our memorable experiences are usually on the wrong side of the word “love”.

Southwest however, have  made it their mission to make as many of their customers feel that way about the brand .

Their messaging is warm, their manner is friendly, their approach is human and they do everything they can to show the “Love”.

This is a philosophy they’re so committed to, they use the “Ticker Code” “LUV” on the New York Stock Exchange and use a heart icon wherever the brand needs to be represented visually.

This is a  brand with personality  and authenticity that genuinely puts their customers first.

Brand Loyalty & Intimacy

The terms brand loyalty and brand intimacy are interconnected and along with advocacy are  the holy grail of branding .

These terms are reserved  for brands that just get it .

They supersede transactional relationships and take a meaningful place in the hearts and minds of their customers.

Loyalty Is A Human Emotion

Being human is a philosophy that Herb Kelleher adopted early on.

He  encouraged informality and wanted staff to have fun in their jobs . This human touch has remained a  philosophy of the brand  over 40 years later.

Today, employees are encouraged to be themselves and a strong brand culture and their belief in what they do is playing out at check-in desks and in the skies across America.

In this video, a flight attendant is captured doing things a little differently.

Brand Loyalty Leads To Brand Intimacy

In their annual brand intimacy study MBLM ranked Southwest Airlines the most intimate brand in the travel industry for three years on the trot.

According to MBLM:

Southwest has been able to distinguish itself and cultivate Brand Intimacy, creating a significant advantage because consumers are more willing to engage with, use, and pay a premium for intimate brands. Whether it is the heart logo or the focus on customer service, Southwest’s brand is built on an emotional foundation that is uncommon among travel brands.

Most notably,  Southwest Airlines is by far the most intimate travel brand  with the market segment earning under $100k. A sure sign of their strong position in the market for their intended  target audience .

Over To You

Soutwest Airlines is an example of a brand that understands their audience.

First, they know their challenges and make it a priority to take those challenges away and make flying as easy as possible.

Then, they make the relationship about more than just a transaction.

Yes, Southwest solve a problem for their customers; yes their customers pay for that privilege but that’s not what drives brand intimacy.

Southwest customers feel affection towards the brand because they make their lives easier and they make human connections as they do it.

That is what every brand must strive for.

Let me know your thoughts in the comments below!

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Love your in-depth analysis Stephen!

Cheers Vincent… glad you enjoyed it

Hello from Belfast. The best city in Ireland obviously. Brilliant stuff, been following your stuff for a while and you lay things out really clearly. Nearly ready for onboarding. that was bad sorry.

What about ye…. ???? ????

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Southwest Airlines Remote From Home No Experience $30/Hour - Work From Home Jobs

Southwest Airlines and embark on an exciting journey with our Remote From Home program. No prior experience is required! We're offering an incredible opportunity to work from the comfort of your own home, earning $30 per hour. If you're passionate about customer service, enjoy a flexible work environment, and thrive in a collaborative setting, this role is perfect for you.

Position: Remote Customer Service Representative

Location: Work From Home (U.S. based)

Hourly Rate: $30/hour

Job Type: Full-time or Part-time

Responsibilities:

Provide Exceptional Customer Service: Engage with customers via phone, email, and chat to assist with inquiries, bookings, and general assistance.

Resolve Issues Efficiently: Address customer concerns and troubleshoot problems with a focus on finding effective solutions to ensure customer satisfaction.

Maintain Professionalism: Represent Southwest Airlines with professionalism, courtesy, and a positive attitude in all interactions with customers and team members.

Utilize Resources: Access and navigate internal systems and databases to gather information and assist customers effectively.

Adaptability: Embrace change and adapt quickly to new processes, procedures, and technologies as they evolve.

Team Collaboration: Work collaboratively with team members and other departments to ensure seamless customer experiences and contribute to a positive team environment.

Meet Performance Metrics: Achieve and exceed performance goals related to customer service metrics, including response times, resolution rates, and customer satisfaction scores.

Qualifications:

No Prior Experience Required: We welcome individuals with diverse backgrounds and experiences, including those without previous customer service experience.

Excellent Communication Skills: Strong verbal and written communication skills are essential for effectively interacting with customers and team members.

Customer-Centric Attitude: A passion for providing exceptional customer service and a dedication to resolving customer issues with empathy and professionalism.

Tech-Savvy: Comfortable using computers, navigating multiple software applications simultaneously, and quickly learning new technology platforms.

Flexible Schedule: Ability to work a flexible schedule, including evenings, weekends, and holidays as needed.

High School Diploma or Equivalent: Minimum educational requirement.

U.S. Citizenship or Legal Authorization to Work: Applicants must be legally authorized to work in the United States.

Competitive Pay: Earn $30 per hour with the opportunity for performance-based incentives.

Flexible Work Environment: Enjoy the convenience and comfort of working from home with a flexible schedule.

Comprehensive Training: Receive thorough training to equip you with the knowledge and skills needed to excel in your role.

Career Development: Access to ongoing learning and development opportunities to support your professional growth within Southwest Airlines.

Travel Perks: Eligibility for employee travel benefits, including discounted flights with Southwest Airlines.

Health and Wellness: Access to health insurance benefits for eligible employees.

How to Apply:

If you're ready to join the Southwest Airlines team and embark on an exciting remote career opportunity, please submit your resume and cover letter highlighting your qualifications and interest in the position. We look forward to welcoming you aboard!

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Avelo Airlines continues to soar with PayPal’s strategic solutions

PayPal Editorial Staff

April 8, 2024

On April 28, 2021, Avelo Airlines took flight for the first time — ushering in a new era of convenient, affordable, and reliable air travel. 1 Their mission statement is to “inspire travel” and they accomplish this by reducing as much friction as possible for their customers. Avelo never charges a cancellation or change fee. Ever.

They serve over 48 destinations across the United States with an average ticket price of $100. Flying out of smaller, more convenient airports, saves their customers time and money so that they can fly easily and more often.

We spoke to Avelo’s Head of Finance and CFO Hunter Keay, and Chief Digital Officer, Sumit Goyal, to discuss their experience with PayPal Braintree, Pay Later, and Fraud Protection Advanced.

Success metrics

• 3% increase in approval rates. 3
• 22% higher AOV with Pay Later. 4
• 15.5% reduction in chargebacks. 5

The opportunity – Avelo wanted to simplify and streamline the checkout process to reduce friction for their customers.

Creating a seamless travel experience is paramount for Avelo Airlines. However, they encountered challenges with their prior processor and felt that they were not being heard. As a result, Avelo decided to explore other processing solutions, via a request for proposal (RFP). Their goal was to align with an innovative company that shared their vision for putting the customer first and minimizing friction. Avelo also wanted to offer their customers flexible payment options to help them easily budget their travel. And, to ensure that they were approving as many customers as possible, they wanted an adaptive machine-learning solution, to help protect them against evolving fraud. Innovation, reliability, scalability, and responsiveness were key factors in their decision-making process. Ultimately, Avelo Airlines chose PayPal.

Said Keay regarding the RFP process, “We spoke to a lot of really, good emerging fintech companies who provided compelling economics and value propositions. But PayPal was really the only one from a top to bottom perspective, from IT, economics, overall support, and collaboration. PayPal differentiated itself from the start.”

The solution – Avelo integrated PayPal Braintree’s platform to elevate their offerings and decrease turbulence.

With the integration of PayPal Braintree as their processor, Avelo has access to PayPal checkout, Venmo , Pay Later , Fraud Protection Advanced (FPA) , and much more. “The PayPal Braintree integration was our single biggest IT success story that we’ve ever had at this company,” said Keay. “Not just through the speed of integration but through the partnership and collaboration.”

And there are so many components to this collaboration. Avelo customers are adopting PayPal Checkout at rates that have exceeded Avelo’s key performance indicators (KPI’s). Keay explained that “We have better data when the customer books through PayPal and a greater ability to track the demographics, and to better know our customers.”

Knowing that their customers were interested in flexible ways to pay for their flights, Avelo integrated dynamic messaging for PayPal’s Pay Later solutions. Customers can choose between Pay in 4, a short-term, interest-free offer for purchases between $30-$1,500, or, Pay Monthly, a longer-term, interest-bearing offer for purchases between $199-$10,000. 2 By messaging the Pay Later solutions early in the checkout process, customers are aware of these options.

“Quite frankly Pay Later is delivering above and beyond our expectations,” said Keay. “We use dynamic messaging for Pay Later because it drives higher conversion, and it’s a beautifully simplistic product.”

FPA is like a traffic controller, providing Avelo with critical insights and control relating to the customers on their site. With PayPal’s advanced machine learning and analytics, FPA helps Avelo manage fraud and ensure that as many credit worthy customers as possible are being approved.

“The ability to adjust the filters in Fraud Protection Advanced has been exciting for us. The PayPal team confirmed that our fraud filters are optimized and that is evident in our conversion rates,” said Keay.

Collectively, these PayPal products provide Avelo with an integrated payments solution that delivers scalability, security, flexibility, and innovation, ensuring their customers a seamless checkout.

The impact – PayPal helps deliver higher approval and conversion rates, and rich data intelligence to help manage fraud.

The strong collaboration between Avelo and PayPal has been developed with exceptional care and attentiveness, yielding impressive results. Avelo has seen a 3% increase in overall approval rates since integrating PayPal Braintree. 3 According to Keay, “That increase is huge. And that means we are increasing the number of customers who are able to successfully checkout.”

PayPal Pay Later messaging assures customers that Avelo offers the most trusted brand in payments at checkout even if they choose to pay in full. “With Pay Later, we actually experienced a 22% increase in the average order value,” noted Keay. 4

“Fraud Protection Advanced (FPA) is working brilliantly as well,” said Keay. FPA helps streamline the checkout experience for trusted travelers by creating frictionless customer journeys that help increase conversion rates, reduce good customer declines, and increase customer lifetime value. FPA has helped Avelo to reduce their overall chargeback rate by 15.5%. 5

As Avelo Airlines continues to strive to make travel easier for their customers, PayPal’s solutions align with that goal. The strong collaboration and communication have proven instrumental in streamlining the customer checkout experience. PayPal’s strategic offerings help Avelo fuel growth to deliver convenient, nonstop flights so their customers can fly more, for less.

Avelo Case Study (PDF)

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Southwest Airlines Success : A Case Study Analysis

2011, BVIMR Management Egde, Vol. 4, No. 2 (2011) PP 115-118

In this cut throat competitive era service firms may survive with innovative strategies with reference to people, process and physical evidence that differentiate their services from their competitors. The key objective of this paper is to highlight the strategies of Southwest airlines that facilitated it to produce a successful model in airlines industry that was benchmark for the entire world. Paper enlightens that if a service firm gives priority to its employees than customers, it automatically serves customers in better way as services of a company are given through employees and employees’ delight is customers’ delight in service sector.

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hasan ahmed

This article analyzes the sources of Southwest Airlines' competitive aduantage using an integrative approach, employing economic analysis tools to illustrate the roles of commitment and organizational capabilities in delivering competitive advantage at Southwest. A framework is presented illustrating that much of the value Southwest generates is (1) created through employee needs satisfaction, (2) converted to customer and shareholder value via organizational capabilities, and (3) captured by the firm as a result of its cost advantage and superior service. This three-part framework may be applicable to other labor-dependent service organizations.

Dr Kasturi Naik

Purpose: A need has arrived for the airline industry to go beyond offering price discounts, tour packages and air miles to enhance customer experience. The research paper attempts to gain insight in how different customer delight strategies can be implemented by the airline industry to survive in the highly competitive global market'. Currently airline industry's customization is starting and ending at the booking platform (mobile/app/website/travel agent) and food preferences. As a result of advent in information, technology and communication customers are hoarded with public relations and marketing messages', social media advertisements and continuous repetitive mails. Time has come to go beyond the customer expectations and delight the tech savvy customers with the unexpected service excellence to gain and retain customer loyalty. Methodology: For this purpose a survey was carried out among customers who are frequent flyers of airlines in Mumbai catering to domestic a...

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Managing Service Quality

kenan aydin

Recently, businesses have been competing each other with their high-tech investments and their technology. Especially, ın a service sector like airline services, ıt is so important to have a good equipment and great technology. According to this, the purpose of this research is to determine whether there is a significant difference between the consumers' service quality expectations and service quality perceptions. To achieve this purpose, the scale which was suggested by Parasuraman et.al(1988), was formed as 5 dimensions and 22 statements(Servqual), has been adapted for airline travel sector. This questionnaire was implemented to the passengers at İstanbul Atatürk Airport with a " face to face " method. Then collected data was analysed in SPSS 16 program.

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The research reported in this thesis was on "Impact of Service Quality on CS in an Airline Industry". The purpose of research was to study the service quality impact of Pakistani Airlines on the customer satisfaction and to suggest measures to accomplish it on better lines. The secondary data was collected by consultation of literature in the libraries and Internet. The primary data was gathered by floating questionnaires and conducting interviews. SPSS software was applied to analyze data for frequencies regression parameters and cross tabulation the results were interpreted by usual principles of statistics. The findings suggested that out of five Seroquel attributes, four of them have significant impact on customer satisfaction in Pakistan: tangibility, responsiveness, reliability and assurance. However, empathy does not have significant impact on customer satisfaction. Thus, Pakistanis are more concerned about flight The Elements of Service Quality and Customer Satisfaction Role in Airline Industry of Pakistan http://www.iaeme.com/IJM/index.asp 582 [email protected] safety, reliable staff, comfortable cabin seats and quick response to their queries and less concerned about individual attention by cabin crew.

Dhruvi panchal

Nadeem Zahoor, Usama saddique , M.Shahid, Shabbir Hussain

Editor iajps

"Impact of Service Quality on Customer Satisfaction in the Airline Industry" was the title of this thesis. The study's purpose was to find out how Pakistani Airlines' service quality affects customer satisfaction and to suggest strategies to improve it. Secondary info was collected through searching the library and the Internet. Primary data was collected through floating questionnaires and interviews. The data was examined for frequencies, regression parameters, and cross tabulation using standard statistical procedures and SPSS software. Four Seroquel features, tangibility, responsiveness, reliability, and assurance, have a significant impact on customer satisfaction in Pakistan, according to the research. Empathy, on the other hand, does not appear to affect customer pleasure. As a result, Pakistanis are more concerned about flight safety, dependable people, comfortable cabin seats, and quick responses to their concerns than they are about individual cabin attendant attention. Keywords: empathy, assurance, reliability, tangibility, responsiveness, customer satisfaction.

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