Southwest Airlines Core Competencies

Abstract
Airline companies are facing many challenges keeping their cost down and profits up. Some of the main issues are gas prices and pilots pay. CEO of Southwest Airlines, Gary Kelly, has been able to work with fuel companies to provide one of the lowest costs for gas than any other company. With his great knowledge and social personality, he has been a very effective leader for Southwest. The company’s core competencies is treating their customers with respect and showing them that they are valuable and treating their employees even better.

Analysis of Southwest Airlines When talking about big airlines, the main companies that come to peoples’ mind are Delta, United Airways, and American Airlines. But looking into their finances,
these three companies are more in debt that any other. Southwest Airlines has been able to produce the best results out of all the airlines. As stated in Fortune 500, “United parent UAL filed the largest bankruptcy in aviation history ($25 billion in assets) in December 2002. That's big. American is weighted down with nearly $18 billion of debt on its books. That's pretty big. And finally, the three large airlines lost a total of some $5.8 billion last year. That's big too” (Serwer, 2004). On the other hand, Southwest earned $442 million in 2003 and had a market capitalization bigger than all its competitors combined of $11.7 billion. What makes Southwest so successful? One of the main reasons for the great success is their corporate culture.
Rollin Kig and Herb Kelleher started the company with a simple notion: “If you get your passengers to their destinations when they want to get there, on time, at the lowest possible fares, and make darn sure they have a good time doing it, people will fly your airline” (We Weren’t Just Airborne Yesterday, 2010). As stated in the interview with CEO Garry Kelly, Southwest follows four basic rules: keep cost down, fly all the same planes so parts and maintenance is fairly simple and cheap, treat their customers like kings and queens, and treat their employees even better (Destination CEO Video, 2010.) This is a great way to keep everyone happy and gain loyal customers who will come back to fly with the airline, and in turn giving them more
revenue.
These core competencies of the company have proven to work as Southwest Airlines is one of the most successful airlines. Southwest.com states that “Since 1987, when the Department of Transportation began tracking Customer Satisfaction statistics, Southwest has consistently led the entire airline industry with the lowest ratio of complaints per passengers boarded” (We Weren’t Just Airborne Yesterday, 2010). Also, when employees are happy with the company, a lot will be willing for the company because how they are treated and not because how much they are paid. Diana Delgado from Chicago is a perfect example of this as she took a pay cut to work for Southwest because she did not want to work for any other airlines as most of them were making employees work double flight on the same shift to cut cost. Having older and experienced employees who do not want leave saves the company money since that company does not have to spend time and money training new people. Plus, flying only one model of planes is a very efficient method of keeping cost down as all the maintenance work and parts needed for the planes are the same so extra cost is not needed to hire different technicians or search around for parts. To add on to the contributors of their success, Southwest Airlines has a very unique and effective CEO Gary Kelly.
As demonstrated in the Destination CEO video, he is a very casual and socially active person who is very kind and shows respect to all his employees. It would be hard for anyone to know all of the 32,000 employees of Southwest, yet Mr. Kelly greeted everyone he ran across and complimented them on their great work and efforts. He exemplifies the qualities of a great leader and he is able to work with fuel companies and provide gas prices lower and most other airline companies. He does not treat his employees like his subordinates nor does he act like he is better than them. To him no special treatment is expected and in fact, when he flies he sits in the back row where it is the nosiest and most crowded so the paying customers can have the good seats. When asked his employees, they had total faith and trust in Gary Kelly to run the company. His “everyman” personality is what makes him stand out from other CEOs and he has the characteristics of an exceptional leader. With such great management, loyal customers and employees, and impressive leader, it is no surprise the Southwest Airlines is doing as good as it is. Treating the employee and customers like loyalty and having Gary Kerry as their CEO has done wonders for the
company.

Reference
Destination CEO Video. (2010). BusinessWeek. Retrieved from http://www.mhhe.com/business/management/videos/DestinationCEO/SouthwestCEO_Qur Serwer, Andy. (2004, March 8). Southwest Airlines: The Hottest Thing in the Sky Through change at the top, through 9/11, in a lousy industry, it keeps winning Most Admired kudos. How? Fortune 500 Magazine. Retrieved from http://money.cnn.com/magazines/fortune/fortune_archive/2004/03/08/363700/index.htm

We Weren’t Just Airborne Yesterday. (2010). Southwest.com. Retrieved from
http://www.southwest.com/about_swa/airborne.html