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Southwest Airlines Presentation

Transcript: iCOnnect Improved operational efficiencies Lower overall cost for operations Identify and share key information quickly Integrated platform for gathering, processing, analyzing, and reporting customer’s ideas, opinions, sentiment Standardized foundation services for on boarding unstructured data Unified approach to improved business processes and align enabling technologies Saleable and sustainable infrastructure for expansion of social software services Social Networks: Benefits of Social Software and Web 2.0 Process Text Mining & Analytics 10.7 million - GroupOn 8.8 million – LivingSocial Your Customers There are also several blogs where obese people are voicing their dissatisfaction with the policy. 4 Facebook Likes 10,000 - FourSquare 100 million – LinkedIn 1. URL 2. Author 3. Influencer 4. Domains 5. Date 6. Marketing campaign 7. Brand & Image 8. Promotions 9. Sentiment 10. Opinions Process Text Mining & Analytics Social Software Landscape Negative 2MySi THE REST OF THE WEB 2.0+ IS EVEN BIGGER ! Page views Hover over Widgets/ Gadgets Clicks Shares Searches Interactions Initial level of effort: 4-6 weeks Geos 2-4 hours per discovery session Post meeting review Categorize notes Creating the product queries Products 1 – 2 hour session Review focused web query results Objectives and benefits Scope, schedules Product research focus Cross-functional teams Tapping Social Content with focused subjects and structured queries Web Metrics Blogs, forums, specialty sites, specialized search engines Interactive shopping sites, pop-up ads, and more! Leading practice and project accelerators to implement Social Intelligence services and technologies 3 Gathering structured and unstructured data Competitors' Social Media Business Case and Challenges Shopper Enterprise Data Warehouse CRM, MRM, SCM, Actions Islands of Solutions Gather Unstructured Content iCOnnect – The Corporate Listening Office Tools and Techniques The types of sites where the most discussion took place was blogs followed by news sites and forums. The most influential authors included vickyz and Trefis.com. Soft-Knowledge Lost Business Intelligence: Deliver Structured Content Awareness Learning Measurement Kmartin@hcl.com +1 469 258 8522 Practice Director – Social Intelligence BI 2.0 Practice How big is Social Software? 2 Social Media Listening The majority of neutral posts appeared on twitter with blogs having the most negative posts. Key Findings : Ken Martin Southwest Airlines has a Facebook Page with 1,699,275 likes. This page has frequent posts from Southwest Airlines and customers. Implement leading practices Social media listening and analytics Competitive Intelligence Knowledge networks DW/BI/Analytics integrations Strategic planning, implementation and support for “Voice of the Member” : Text mining; Text analytics; Social analytics; Community lifecycle Next Steps: Define the Pilot project and BEGIN LISTENING 25 million user Google’s network! Duplicate costs and efforts Thank You Technology Integration Platform Challenges Unstructured data: Email, web content, Radian 6, ClaraBridge, Oracle RDBMS, Enterprise ERP, Informatica, Data stage Analyze Automated – BPO Many customers approve of the double seat policy because they are tired of obese individuals spilling over into the chair they’ve paid for. Automated Events Publication of user feedback External Case Study: Fortune 100 “Voice of the Customer” Bandwidth = entire internet in 2000 3 Billion video views per day 200,000 uploads per day 300 million accounts 6% educational content 7 % from Europe Develop strategic plan to enable voice of customer services across all lines of business Define governance and foundation services for to gather, process, analyze, and delivery analytics across a variety of listening posts. Work with business owners and technology providers to understand the cross-functional requirements Develop scenarios with business owners to create priorities, need by dates, and align to implementation and integration activities Develop enterprise wide business and technology architecture Develop and utilize an Agile methodology for incremental deployment Alignment Goals Outcomes http://goo.gl/ByORV Focus Redundancy in initiatives No integrated processes Duplicate cost Loss of key information Create customer friendly social applications Cloud-based / software-as-a-service Crowd sourcing Corporate Communication: Results and Business Benefits “The glue” Analysts 360 Community Content Collaboration Publication Analytics Cloud-based SaaS 1 Validate and Prioritize Analysis and reporting cycle Periodic publication of findings for internal SME review Publish Insights reports Establish the Corporate Listening Office Southwest Airlines has a Twitter accounts named SouthwestAir and has 1,183,113 followers. Southwest is using the twitter account for customer service and interaction. Knowledge Management: Information Delivery Product research focus Known's and unknowns Reporting cycles Initiate

Southwest Airlines

Transcript: Internal Environment External Environment STRATEGIES RECOMMENDATIONS Threat of new entrants Threat of Substitutes Supplier Power Buyer Power Competition Herb Kelleher Pioneered low-cost strategy Cost conscious Is the industry attractive or unattractive? Wright amendment Serving 64 citites High barrier of entry Deliver high frequency flight schedules Maximize number of passengers flown Equipment is standardized Online presence Value Chain Analysis Business level strategy Cost leadership Corporate level strategy Market expansion International Volaris, WestTet Entrepreneurial Herb Kelleher STRENGTHS! Company, Product & Services WEAKNESSES Chris Hamilton Nichole Shepard Taurean Mcaa Edward Jasper FINANCIAL ANALYSIS SWA is an American airline based in Dallas Founded in 1967 by Rolling King and Herb Kelleher First revenue flight in 1971 Now operates more than 3,400 flights a day The largest domestic passanger airline in the U.S. A fleet of 537 aircrafts Servicing 64 cities and 32 states throughout the U.S. Based off of the Five Forces... Breaking down the Five Forces! Growing business Slow to differentiate Aggressive unions New leadership THREATS OPPORTUNITIES CURRENT STRATEGIES "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." Are they sustainable? Rising costs Other airlines Customer satisfaction Environmental conditions Company Mission ANY QUESTIONS

Southwest Airlines

Transcript: Founded in 1971 by Rollin King and Herb Kelleher The third-largest airline in the United States The United States’ most successful low-fare, high frequency, point-to-point carrier. Known as a “discount airline” since 1973 - offers low fares - no-frills service - basis for Southwest's popularity and rapid growth Introduction to the Issues Integrated Strategy Southwest's Current Strategy Southwest Airlines was once the leaders in low operating cost expenses and cost efficiency. However Southwest has lost some of its cost advantage in recent years. In 1995, Southwest Airline’s total operating expense was 19.28% lower than the industry, but in 2009, and the first quarter of 2010 the number drop to 15.4% and 13.81%. Furthermore, over the last years Southwest had consistently overpaying for pilot, employees, fuel and oil, and landing fees. Statistics show that in 2009, Southwest pays 48.76% more on pilot wages, 16% more on employee salaries, and 21.48% on landing fee compare to the industry average. The number for Q1 2010 is 48.1%, 14.32%, 23.29% and 52.08% respectively. As Southwest continues to sustain its title of low cost leader in the airline industry, they will need to keep their operating costs lower than rivals in the industry and use the integration of Airtran to reduce costs. SW has to better integrate the employees and culture of Airtran with its own. There are a number of things SW can do to integrate the employees in the two firms; it can have Airtran executives appointed to SW executive positions, it can fill vacant SW positions with airtran employees to avoid large layoffs and SW executives can meet and welcome airtran employees in Airtran facilities. Financial Analysis Our last issue was would the integration between to the two airlines to reduce the cost of operations. Price competitive Cut cost to survive Rising fuel prices Customer service oriented Organizational Issue Low fares Fun and “LUV” culture Dedicated employees Strong management Point-to-point scheduling Low cost operation Southwest Airlines Air strips started as grassy fields, now they are sophisticated tar macks with lights, signals, and gang ways. Southwest Airlines is a major US airline, which specializes in low cost, short haul, high frequency service. The company is the leader in this industry and its performance compared to other major airlines has been outstanding. Southwest has to address the following issue to remain competitive: lower operation cost, integrate AirTrans Airline into the Southwest culture, and using the integration of AirTrans to save cost and improve operation. The business issue Southwest needs to address is how to integrate AirTrans’ operations into Southwest’ s and achieve cost-savings in the process making it competitive with rivals. Southwest Airlines Overview Business Issue Southwest airlines’ rivals have been slashing costs in order to survive, particularly in the areas of pilot salaries and employee salaries. Southwest, which once had lower labour costs now finds itself confronted with higher labour costs (its employees have more longevity—and thus higher salaries—whereas many employees at rival airlines are relatively new and have not yet gotten in-grade pay raises to the extent as has occurred at Southwest). In September 2010, Southwest airlines announced that it had entered into a definitive agreement to acquire low cost, low fare provider airline AirTran. AirTran currently has 8,033 employees who will need to be successfully integrated into the Southwest culture. In addressing the financial issue of how to lower operational costs, Southwest should keep employee salaries marginally higher than the industry average to maintain exceptional customer service levels, but not so high as to jeopardize profit margins. As employees buy into the cost cutting mentality, they will understand the need to even out salaries across the industry in order to keep jobs. Financial Issue Overview of Airline Industry

Southwest Airlines Presentation

Transcript: What factors of Cohesion make Southwest Airlines successful? Innovation Herb Kelleher: Southwest Airlines Don't Worry! Family atmosphere Staff Airline Deregulation Act Informality and Humor Managerial Tactics Credibility and Caring Athena Goddess Deregulation and Expansion 1. More frequent flights between current destinations 2. Open new routes to California and the Midwest 3. Buy more airplanes to increase the number of flights What do we think of our CEO? Concept Questions Concept Questions Able to maintain the Southwest model 1978 congress passes Airline Deregulation Act Southwest given opportunity to expand Expands to first state outside of Texas by operating in New Orleans, Louisiana Intermission Low external interactions No baggage fees How did Southwest actually respond? Conservative financial policy Elimination of bureaucracy Southwest begins operations officially in 1971 The Department of Transportation Triple Crown Fair to Customers There are Barriers to Entry! Say What?! Herb's Early Life Southwest Today Intermission Systems Teamwork Relational competence Leadership Happiness and Fun Now it's your time to shine! Was able to avoid massive layoffs Employees Forced to buy a second seat No first class or "frills" Herb Kelleher says "employees come first" Wesleyan University Met future wife Joan Negley Persuaded to try a career in law New York University Law School Stayed up all night drinking and partying Essentially removed government's role in airfare pricing and entry into the industry by airlines like Southwest Over Drinks Marketing 1990 turned an overall profit 1991 had very large expansion; 30 more planes than the prior year along with 5 more cities 1995 reached $2.8 billion in operating revenues Sued by the cities of Dallas and Fort Worth to move their airline to the Dallas-Fort Worth Airport in accordance with agreement signed by other airlines in 1968, even though Southwest did not exist to sign it! Southwest argued to stay in Lovefield, Texas, their original base of operations “Southwest Airlines would not be in existence today had not the other carriers been so rotten, trying to sabotage us getting into business, and then trying to put us out of business once we got started. They made me angry. That’s why Southwest is still alive. I’m not going to get beaten, and I’m not going to let anyone take advantage. They were too stupid to realize the psychology of the situation, so they just kept plowing ahead" Every person and every job is worthy just as much as any other person and any other job Herb Kelleher's Management Style The 7 S Model Factors of Cohesion Outside Critics Still manages to keep employee productivity high $17 billion in revenue United, Delta, and AMR have larger revenues Share price: approx. $9.00 Grown and stayed stable 'Nuts about Southwest' Relational Coordination Effective Communication of Ideas Departments granted power for veto when hiring It was officially passed to encourage the use of the Dallas-Fort Worth Airport, but underhandedly targeted at stopping Southwest from expanding Low Pay "The Southwest Way" Longer hours than competition Profit Commuter flight for the masses Primary Goals Employees on Kelleher Relationship Lens: Be fair and consider those with no power Shared attitudes and values Similarities with Jack Welch Cut costs Creativity and innovation Professional informality culture Passion So... What's your opinion of Herb Kelleher? Superordinate goals Fair Pricing and no hidden fees "You are now free to move about the country" "An Act to amend the Federal Aviation Act of 1958, to encourage, develop, and attain an air transportation system which relies on competitive market forces to determine the quality, variety, and price of air services, and for other purposes" “Top-down” pyramid Entrepreneurial structure Task tribe Are there more? Southwest Airlines Early Life Fought through lawsuits and judgment on deregulation on Airline Industry “CEO of the Year” 1999 and 2001 “CEO of the Century” by Texas Monthly President and CEO 1981-2001 Executive Chair 1978-2008 Herb Kelleher College Years Concept Questions “Offering low fares provides the largest return to our shareholders” Proposition: Open an airline between Houston, San Antonio, and Dallas Greatest output for the smallest effort 3 Steps 1970s Controversy Fair to Employees 1988 Kelleher announces plan to double company size by 1994 “A happy employee is a productive employee” Herb Kelleher's Reflection Productivity Style Southwest eventually wins the court case How does Kelleher compare to Jack Welch? What are his similarities and differences? Consider the 7 S model as well as managerial style, personality, goals, etc. Kelleher's successor: Gary Kelly 15 minute turn arounds Questions? The controversy led to a new law which prohibited any air carrier from offering direct service from Lovefield to any place beyond Texas, Oklahoma, Louisiana, Arkansas, and New Mexico The only airline that managed to turn a profit

Southwest Airlines

Transcript: Current Fleet Except for a few years during the 1970s-80s when it operated Boeing 727s Southwest has used only Boeing 737s, and as of August 2012 Southwest is the largest operator of the 737 worldwide with over 572 in service, each operating an average of six flights per day. The largest low-cost carrier in the United States, and is headquartered in Dallas, Texas. Was established in 1967 Certificates/Ratings: U.S. FAA Airline Transport Pilot Certificate. Unrestricted U.S. Type Rating on a B-737, must be at least 23 years of age. 2,500 hours total or 1,500 hours Turbine total. Experience must include actively flying two of the last five years. Must possess a current FAA Class 1 Medical Certificate. Must pass FAA mandated Drug Test. Authorization to work in the United States: Must possess a valid United States Driver's License. graduation from accredited, four-year college preferred. At least three letters from any individuals who can attest to the pilot's flying skills, by having observed him/her over a sustained period of time. Hiring Qualifications History Safety Record The Aircraft Flown Southwest Airlines Southwest Airlines was incorporated in Texas and commenced Customer Service on June 18, 1971, with three Boeing 737 aircraft serving three Texas cities - Houston, Dallas, and San Antonio and grew to become a major airline in 1989 when it exceeded the billion-dollar revenue mark. Southwest topped the monthly domestic originating passenger rankings for the first time in May 2003. As of December 2012 they have 581 planes in service. 383 of those are 737-700s. With an average fleet age for their aircraft is 11.2 years. Southwest has more than 46,000 employees as of August 2012[update] and operates more than 3,400 flights per day. As of December 2012 Southwest Airlines has scheduled service to 78 destinations in 39 states. CEO Southwest, Incidents per flight: 0.0000203. Southwest has not had a single passenger fatality in 41 years. Southwest Airlines Gary C. Kelly is the chief executive officer and chairman of Southwest Airlines. He first joined the company in 1986 as a Controller. In 1989, Gary was promoted to Chief Financial Officer and Vice President of Finance.

Southwest Airlines

Transcript: Southwest Airlines Ying Liu Where Southwest is more than just peanuts! Welcome Aboard Southwest Southwest Rap.

Southwest Airlines

Transcript: 2.3 Involved 4. Workforce Diversity 3.3 Freedom to Leave Southwest And for the One who Wants to Leave Southwest Permanently... Employees First Exit Interview Male More than 1,208 Married Couple Work for Southwest! PEOPLE FIRST Conclusion To Discover other Departments 84% of employees declare they receive the training they need to do their job 77% of employees declare they can meet their career goals in the company 80% of overall employee satisfaction (working in the company) HAPPY ATMOSPHERE Atlanta Disaster Preparedness & Response We can see how well a company treats its workforce during good times and more important, during bad times. Medical Leave of Absence Adoption of a Child Leave of Absence BALANCE AS WELL AS YOUR "Ensuring all Employees experience a positive work environment leading to happy and healthy careers." Thank you! SWA began interstate routes in 1978 Other Positions they Could Be Interested In Southwest Airlines operates scheduled service to 97 destinations in 42 states (as of January, 2012) Strategy Hedge Oil Contracts SW holds 23% of the industry June 1971 5/5 Today, all Southwest employees wear casual clothing INVOLVED Long-distance flights: "Southwest is the top US Airlines in our latest survey" Opportunities Diversity Council HAVE FUN Families Facing Serious Illnesses TRIUMPHS Customer-Care Training Program (yearly) Personal Development Program Coaching Program The largest airline in the United States based upon domestic passengers carried (June 5, 2011) Music MISTAKES CHALLENGED For... All the U.S. airlines laid off employees 5. Holistic Responsibility Expand Domestically Expand Internationally First Officer first to offer the frequent miles program Direct MarketingTravel bookings: by phone and the Internet demographics of flight focus on convenience and focus on price are near limit few international flights no stable long-term strategy lack of morning flights only one class of seating booking of flights no benefits to customers SWA: the first two bags fly free 5/5 world’s busiest airport 3. Flexibility to Achieve the Job #1 in the Top 100 Military Friendly Employers in 2011 Adopt-A-Pilot Student Program Threats PEOPLE FIRST increased pressure on rivals Install TV's Southwest Brief History ENJOY WORK Social Responsibility: 2. Encourage to Take Risks by Accepting Failure Average Age34 Years-Old "We would rather lose money, than our employees." Began service in the Texas Golden Triangle (Boeing 737 ) recognized as the pioneers of the senior discounts, fun fare, and a lot of gift packages Internal Information Retain Fun LUVing Attitude Random LUV Initiatives Organize & amplify issues that improve diversity FUN Employees feel valued and informed Advertising and PR to external also targeted internal Show me the Way Employees Parents Step Parents Children Retirees Reinforce the Culture, Core Values & Corporate Identity. NYSE Ticker Symbol = LUV one of the best low cost carriers high capacity usage company’s reduced fares diverse upper management team profitable control of the airline market Free baggage the short haul segment point-to-point route structure good relationship and status with its unions good safety record one model of aircraft first airline company to initiate 100% e-telling operates more than 3,300 flights a day Spend some time in another “employee’s shoes “ Offer Meals 2.2 Challenged EXCEPT ONE Caribbean at SW Dallas Average Age 34 Years-Old Scholarships Program “People Department” Recruitment Ad Training & Development Company Newsletter : LUV Lines Performance Evaluations Consequences Fly FREE on Southwest Airlines 5.1 Charitable Givings 4.83/5 Presented by: Grace Li Ece Firat Tung Nguyen Ksenia Mikhaylova Expansion Planification of LUV Events Retain Fun LUVing Attitude Ticketless Travel option Herbert D. Kelleher is named President, CEO & Chairman of the Board 42,700 employees References Green Team of Southwest "An opportunity to communicate information to the Company and to communicate the Employee’s feelings about his/her experience at Southwest, including the reason(s) for the Employee separating from the Company. The goal of the exit interview is to enable Southwest to be even more responsive to the needs of all Employees on an ongoing basis." three-year battle 1967 MIT 2: Motivation and leadership Informal Merger With AirTran 5.4 Environmental Initiatives in 2009, Delta Air Lines collected the largest amount in baggage fees -- $130 million, a 172% increase over the same period in 2008 3. Employees' Benefits 1977 Dallas 4/5 “If the employees come first, then they are happy... A motivated employee treats the customer well. The customer is happy, so he keeps coming back. It’s not one of the mysteries of all time, it’s just the way it works.” DON'T TAKE YOURSELF 5/5 "Accepting failure is a Rule for Successful corporations." Increased Operations Research careers, Develop life values, Realize the importance of staying in school 537 Aircrafts 2.1 Employees First Herb

Southwest Airlines

Transcript: Southwest Airlines According to the American Customer Satisfaction Index Report from 2011, Southwest scored an 81 out of 100 putting them at the top of the list. According to Airline Quality Rating, Southwest ranked 5th ovverall in 2010. Southwest has not laid anyone off or cut any flights since September 11th. Where Southwest flies to Southwest Airlines Stocks (LUV) How they fly The Airline Deregulation Act of 1978 is a United States Federal Law that removes government control over fairs and routes. This promoted competition in the airline industry. One of the goals of the Act was to encourage the use of secondary airports in metropolitan areas. Southwest saw this as an opportunity to provide service outside of Texas. The Wright Amendment of 1979 was put in place by Texas Congressman Jim Wright to restrict passenger air traffic out of Love Field. This was to protect DFW International Airport. Southwest uses Love Field. Southwest maneuvered around this by increasing service to non effected airports. Finances In 1995, Southwest became one of the first airlines to have a website. It was called Iflyswa.com On October 13, 2006 a bill was signed by President Bush that ended the Wright Amendment. Non-stop flights from Love Field are restricted until 2014 On May 2, 2011, Southwest bought AirTran for $1.4 Billion. This allowed for Southwest to add 15 destinations including Atlanta. Shane, Jonathan, and Ericka After selling one of their airplanes to stay in business they learned that they could keep up with demand by using the 10 minute turn around method, which is still implemented today. Today they have increased it to a 25 minute turn around. Their fleet includes only variations of the Boeing 737 to reduce costs for maintenance. After their purchase of AirTran they now have several Boeing 717s Early Years They are putting motions in place to go international. Their goals are to add flights to Mexico, Canada, and the Caribbean. Deals made put the timeline for international flights in 2014. They will start in Texas. They purchased 150 Boeing 737 Max 8 airlines to be put in service in 2017. They are a step toward the new green image the company is creating. By 2013 they wish to reduce each plane by 835lbs to create a more fuel efficient fleet. (Changing carpet and evolving the seats) Present Day What makes Southwest different? How are they a disruptive company? Where Southwest Flies into: 27. Chicago Midway 49. Dallas Love Field 20. LaGuardia N.Y. 40. Hobby (Houston) Hub and Spoke Great Quality, Great Company Southwest uses the Point to Point Transit method.... Acts and Amendments The Southwest Experience Who are they? Top 10 Busiest Airports in U.S.: 1. Atlanta (2012) 2. O'hare Chicago (N/A) 3. L.A. (1982) 4. Dallas-Ft. Worth (N/A) 5. Denver (2006) 6. J.F.K. New York (N/A) 7. Houston (N/A) 8. San Francisco (2007) 9. Las Vegas (1982) 10. Phoenix (1982) Founded in March 16, 1967 under the name Air Southwest by Rollin King and Herb Kelleher. On June 18, 1971 they started service between Houston, Dallas, and San Antonio with three Boeing 737s. $20.00 was the cost for a one way ticket. On November 14, 1971 they completed the triangle by adding flights between Houston and San Antonio. Kelleher commercialized on the same "Long legs And Short Nights" theme that California-based Pacific Southwest Airlines used. Flight attendants were carefully selected. Southwest is the largest low cost airline company in the United States. Headquartered in Dallas, Texas. Most recognized for giving birth to the low cost approach to air travel. This budget airline created a new disruptive market and a new type of inexpensive travel Future of the Airline Open seating Bags fly free Early Bird No unexpected charges

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