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Southwest Airlines

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by

Debra Richard

on 28 February 2015

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Transcript of Southwest Airlines


People may be skeptical of using Southwest Airlines after the coupon voucher crisis
Southwest is offered more growth opportunities than it has aircraft
Operational costs
Cost of taking in a new company, Airtran.
Heavy and direct reliance on customers for finances
Southwest Airlines
Madison Johnson
Chief Executive Officer
Nasiah Richard
Chief Financial Officer
Charlton Riley
Chief Accounting Officer
Moriah Richard
Chief Operating Officer
Industry Overview
Company History
1973
1974
March 16 1967
Southwest Airlines is incorporated as Air Southwest Co.
This year was the first profitable year for Southwest Airlines.
Southwest Airlines catered to its one-millionth customer.
Southwest Airlines enters the
American Stock Exchange by the ticker symbol "LUV".
1975

Southwest
SWOT Analysis

High customer satisfaction and retention
Survived throughout turmoil (ex. September 11 and 2008/2009 Recession)
Successful acquisition of AirTran
Lowest net-debt in major airline industry
Their customer friendly prices and 2 bags free.

Spread into the international industry
Financial gain due to the AirTran merger.
Traveler traffic is expected to grow by 3.5% through 2019
Southwest airlines has 2 airports that can fly internationally (Atlanta and in Washington D.C.)

Other rising airlines / imitators
Increasing fuel prices
Potential customers that want to travel internationally must use an alternative airline.
No First Class.
People worried due to security issues
The production of new technology. Southwest's technology becoming obsolete.
PEST Analysis
The FAA reported Southwest Airlines for operating planes that weren’t properly inspected.
Due to “9/11” attacks airport security has increased
Wounded reputation due to lawsuits involving racism and drink vouchers


Directly dependent on purchases of customers
The rising fuel costs
Rely on a single aircraft type
Hedges more oil than any other airline- around 70% of its fuel

Fear of security and safety of flying
Southwest Airlines wants all their employees to have a positive, out-going attitude which gives them good customer service
For 2 years in a row Southwest has been ranked #8 for “Top Ten Corporate Blogs”
Known for being the world’s largest low cost carrier



It is convenient for customers to make purchases and access customer service from the comfort of their homes
Upgraded cockpit technology in 2010.
Are creating new programs to help air travel as a whole through technology
Engineers to help the company with Technological Engineering
Created Technological Service Centers to help prevent accidents
Identifying the Problem
Integrate AirTran into the Southwest company culture
Spread into international markets
Expand current service offerings
Southwest Culture Introduction:
Getting to Know the Family
Agenda
"Exchange Program"
Introduction
Overview of the Industry
Overview of Southwest
Timeline
The Purpose
Defining the Problems
Strategic Analysis
SWOT Analysis
PEST Analysis
Recommendations
Integrating AirTran
Moving Towards International Markets
Expanding Service Offerings
Implementation Process
Financial Implications
Integration Method:
Integration Method:
Expanding Service Options
International Markets

Year 1- Buy three international airplanes

Year 2-London, Paris (Jan) (this will be a connected flight)
Buy one more international airplane (Feb). Add Bangkok (June)

Year 3 - Add Hong Kong to the Bangkok route (connected flight in Jan). Buy 1 more international airplane (September).


Year 4 - Add Dubai (Jan). Buy 2 more international planes (June).

Year 5 - Add Barcelona (Jan). Buy 1 more international plane (June).

*These flights will happen twice a day every other day in the year


Subsidiary No More
Airport Lounges
The "Next" Class
Mobile Application Update
Integrating AirTran
-First flight was in 1903
-Used for mail delivery in 1925
-Within the next 10 years commercial airlines began to start up
-The FAA began in 1958 to manage safety operations of aircrafts
-The Deregulation Act of 1978 brought in free market competition
-Competition drove out previously dominant airlines
-9/11 caused the entire airline industry to not turn a profit until 2006
-The 9/11 incident magnified the airlines issues and led to a decline of airline customers


Airport Lounges
The "Next" Class
Mobile Application Update
Introducing a relaxing experience for an annual cost
Houston pilot base
opens in June
1984
Updated Services for Customers
On-Boarding Double Check
Flight Redirect
Hotel Reservations
Southwest buys Morris Air

1992
Phase Implementation
1995
First Airline company to launch a website
Southwest announces merger with AirTran
2010
Southwest talks about going international
Phase 1
Southwest Airport Lounges will be put in our international hubs in London,England and Paris, France. These Lounges will have an annual membership cost of $450. They will include a children's playroom equipped with snacks, a complimentary buffet, charging docs, free Wifi, TV, and a concierge service.
:2015
January 1
: Send notification e-mail
Months 1-5
: Begin changing names on ticket counters
June 1
: Redirect Airtran.com to Southwest.com
Start "Getting to know the Family" training
September 1
:
Buy three international airplanes
Start building airport lounges
Begin changing over the internal computer programming
Start contracts for 2 airport slots
2012
Phase 2: 2016
January 1:
Have obtained 2 airport slots
Begin flying internationally (flights to London and Paris)

February 1:
Purchase another 777- ER
Open the airport lounges

May 1:
Buy one more airport slot

June 1:
Start Bangkok route




Continental Airlines
Phase 3: 2017
United Airlines
American Airlines

January 1
: Add Hong Kong to the Bangkok route
Begin updating Southwest App

June 1
: Customers will be able to access the updated Southwest Mobile Application

September 1
: Purchase another 777-ER
The entire company will be converted over into Southwest Airlines


Phase 4: 2018
January 1
: Begin flights to Dubai

June 1
: Buy 2 more 777-ER airplanes
Phase 5 : 2019
January 1
: Begin flights to Barcelona

June 1
: Buy one more 777-ER airplane
How the Exchange
Program Works
Strategic Analysis
Financial Projections
Economic:
Recommendations
Technological:
Strengths:
Weaknesses:
Opportunities:
Threats:
Southwest Airlines is the world’s largest low cost carrier.
It is known for its superb customer service.
Only fly with 737’s.
For the past five years, Southwest has had a steady rising profit that is projected to benefit them in the future.
Southwest currently has about 46,000 employees.
Southwest Airlines
How can Southwest:
People may be skeptical of using Southwest Airlines after the coupon voucher crisis
Southwest is offered more growth opportunities than it has aircrafts

Operational costs

Cost of taking in a new company, Airtran.
Heavy and direct reliance on customers for finances
Political:
Social:
Financial Projections
Financial Projections
Financial Projections
Agenda
Introduction
Overview of the Industry
Overview of Southwest
Timeline
The Purpose
Defining the Problems
Strategic Analysis
SWOT Analysis
PEST Analysis
Recommendations
Integrating AirTran
Moving Towards International Markets
Expanding Service Offerings
Implementation Process
Financial Implications
Exploration
Madison Johnson
Chief Executive Officer
Nasiah Richard
Chief Financial Officer
Charlton Riley
Chief Accounting Officer
Moriah Richard
Chief Operating Officer
Thank you for your time

http://www.forbes.com/sites/kenmakovsky/2013/11/21/behind-the-southwest-airlines-culture/


http://www.blogsouthwest.com/corporate-social-responsibility-index-and-southwest-airlines/#sthash.uNZKkCVE.dpu
http://www.faa.gov/air_traffic/publications/ifim/intl_overview/
http://money.cnn.com/magazines/fortune/storysupplement/airline_costs/

http://en.wikipedia.org/wiki/Southwest_Airlines

http://swamedia.com/channels/By-Date/pages/1979-to-1981

http://www.southwest.com/assets/pdfs/customer_service/swcom_media_kit.pdf




https://itunes.apple.com/us/app/southwest-airlines/id344542975?mt=8
http://finance.yahoo.com/news/southwest-jetblue-win-reagan-national-215005924.html
http://bcs.solano.edu/workarea/mgarnier/MGMT%2050/Southwest%20Porters%20-%20Brief.pdf
http://www.usatoday.com/story/travel/flights/2014/01/27/southwest-launches-international-services/4938011/
http://www.kgbanswers.com/what-is-southwest-airlines-target-market/19948395
http://online.wsj.com/news/articles/SB10001424052702303338304575155813404043090
http://www.southwest.com/html/about-southwest/careers/positions.html
http://www.wikinvest.com/stock/Southwest_Airlines_Company_(LUV)

http://www.airliners.net/aviation-forums/tech_ops/read.main/279579/
http://southwest.investorroom.com/financial-statements
References
http://www.blogsouthwest.com/awards/#!
http://www.southwest.com/
http://www.delta.com/
References
Soaring Higher than the Average Airline
Airports with Southwest & Airtrain Overlap
Internal exchange to highlight Customer Service Excellence
Airports without Southwest & Airtrain Overlap
Send 5 Southwest Trainers to Airtrain aiports
Training will be conducted at each airport for 1 week
All training will be concluded within 2 months
Customer Satisfaction
Surveys will be conducted for passengers focusing on customer facing positions
Internal evaluations will be conducted for non-customer facing roles
Full transcript