Southwest
Case Study Highlights
Southwest Airlines case: 1993 (A)
Behnam Tirandazi
History
In my opinion for operating management of a system like this three categories is important: geographic, economic and politic. Reason of Geographic category is locations and weather forecasting. The first thing I interested about that is location of Southwest’s corporate offices. It were located at Dallas’s Love Field. Love Field was located six miles from downtown Dallas. All Southwest flights out of Dallas originated from Love Field. According to “Exhibit 3” main office is approximately located in center of Southwest Airline Routes. It is important for one company the corporate office access to all other branches.
The Southwest Model
Fig 1.summery of Southwest Model (Abhishek Mehra)
Operations
In this table summery of report is shown in this diagram.
According to Exhibit 1, Southwest Airline income was reported. As shown in Table, operating expenses percentage are:
Operating expenses:
%
Salaries, wages and benefits
33.4
Fuel and oil
16.2
Maintenance materials and repairs
8.0
Agency commissions
7.1
Aircraft rental
4.3
Landing fees and other rentals
6.8
Depreciation
6.7
Other operating expenses
17.4
This case must be complicated because table show 17.4% of expense is related to “Other operating expenses “and this value is significant. If number of parameter is too many in a system they make a system complicated. But in this case, Salaries and wages is major expense.
Salaries, wages and benefits:
Review this three paragraph in article:
Southwest Airline had 84% unionized labor force but its labor relations were excellent.
All employees were entitled to profit sharing, which was the company’s only form of retirement program. Each year a percentage of the company’s earnings before taxes was divided among employees based on their wages.
A manager noted, “We pay our flight attendants at least as much, if not more, than the industry average.” Flight attendants
Southwest Airlines case: 1993 (A)
Behnam Tirandazi
History
In my opinion for operating management of a system like this three categories is important: geographic, economic and politic. Reason of Geographic category is locations and weather forecasting. The first thing I interested about that is location of Southwest’s corporate offices. It were located at Dallas’s Love Field. Love Field was located six miles from downtown Dallas. All Southwest flights out of Dallas originated from Love Field. According to “Exhibit 3” main office is approximately located in center of Southwest Airline Routes. It is important for one company the corporate office access to all other branches.
The Southwest Model
Fig 1.summery of Southwest Model (Abhishek Mehra)
Operations
In this table summery of report is shown in this diagram.
According to Exhibit 1, Southwest Airline income was reported. As shown in Table, operating expenses percentage are:
Operating expenses:
%
Salaries, wages and benefits
33.4
Fuel and oil
16.2
Maintenance materials and repairs
8.0
Agency commissions
7.1
Aircraft rental
4.3
Landing fees and other rentals
6.8
Depreciation
6.7
Other operating expenses
17.4
This case must be complicated because table show 17.4% of expense is related to “Other operating expenses “and this value is significant. If number of parameter is too many in a system they make a system complicated. But in this case, Salaries and wages is major expense.
Salaries, wages and benefits:
Review this three paragraph in article:
Southwest Airline had 84% unionized labor force but its labor relations were excellent.
All employees were entitled to profit sharing, which was the company’s only form of retirement program. Each year a percentage of the company’s earnings before taxes was divided among employees based on their wages.
A manager noted, “We pay our flight attendants at least as much, if not more, than the industry average.” Flight attendants