Southwest Airlines: a happy startup case study
Here’s an airline that’s in its 42nd year of service and still going strong.
Founded by Rollin King and Herb Kelleher in the 70s, Southwest Airlines is the largest low-cost carrier in the United States and sets a prime example for how exemplary customer service and strong company culture in turn, makes money.
Taking around $180 million each year in profits, Southwest were the first airline to offer their passengers a frequent miles program, banking travelled air miles in return for free or discounted flights. They pioneered senior discounts on all inbound flights, and were the first to incorporate wi-fi functionality on their planes (way ahead in innovation.)
How did they secure custom? Here’s some facts on how they secured first customers, and continue to do so…
- No first class! Southwest have no first class or economy boarding. Seats are all unreserved and spacious with a focus on equality as a customer.
- Basic boarding for high frequency – keeping it basic is the key to driving profits for Southwest. There are no in-flight meals, just snacks and beverages, allowing attendants to unload a plane, clean and restock in under 20 minutes in comparison with an average 90 minutes for other airlines – promising on-time departure and arrivals.
- No frills, no fees As other airlines are bumping up fees and restrictions as high as humanly possible (ahem, Ryanair) Southwest continue to keep costs simple. They started by only selling one-way tickets at low prices with no hidden costs, to ease complex fare management giving the passenger freedom in travel, alongside value for money.
- Drinks and peanuts all round They offer all passengers free beverages on every flight and get through 60 million bags of peanuts every year. (insane!)
- Customer service above all – The mission of Southwest Airlines promises dedication to the highest quality of customer service delivered with a sense of warmth, friendliness, individual pride and company spirit.
Here’s a funny example of their customer service in action!
As with every startup, comes setbacks, and Southwest were no exception.
When Southwest first began operations, the US Airline industry was under tight control. Competing airlines filed a suit against Southwest, claiming two airlines were sufficient to cater to the needs of three cities Southwest wanted to fly to, threatening to never hire employees that previously worked for Southwest. Of course this only strengthened the bond of Southwest employees and eventually the lawsuit ended, allowing them to conquer the world and document their battles in the form of a children’s book
So what’s the Company Culture like?
“Our people are our single greatest strength and most enduring long term competitive advantage.” Gary Kelly, CEO of Southwest Airline
After their difficult birth, Southwest employees developed a family spirit. The company core values (or “The Southwest Way Spirit”) outlined below highlights this driving job satisfaction amongst employees:
- Work hard
- Desire to be the best
- Be courageous
- Display urgency
Southwest Airlines are renowned for “hiring for attitude and training for skills.”
They look for key traits in every employee to ensure each person aligns with the company core values, strengthening the brand. Take a look at a Southwest flight attendant doing his thing.
Developing a strong company culture wasn’t easy. Southwest continue to offer their employees:
- Free flights across the world
- Competitive Retirement Plans
- Free Health Insurance
- Freedom to Create and Innovate (whatever your role)
- Extensive Training Opportunities and Character Building Programmes
- Happiness, everyday in their 9-5
In return, when times got rough, their employees stuck around. Southwest Airlines were the only airline in the USA with a zero percent staff turnover rate, post 9/11.
Fun facts about Southwest:
- Southwest has 1,309 married couples in the company
- Southwest received 193,636 resumes and hired 4,349 new Employees in 2011
- Southwest were the first airline to bring a killer whale 10,000 ft into the air
- Southwest’s slogan in the early days was “Long Legs and Short Nights” ensuring all flight attendants fit the bill.
What ways can you strengthen your company culture? How can you provide great customer service and develop relationships with your market like Southwest Airlines do?
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