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Human Resource System and

Southwest Airlines

Aman Mishra
Anuj Khurana
Shubhangi Mokashi
Siddharth Anand
Somya Gupta
Riddhi Jain

Group 7

purchased Air California and Pacific Southwest Airlines  From 0 market share again 70 % market share . provided great customer service .Backround  Southwest involved in 4 year long legal battle  Write Amendment: prohibited any air carrier to offer direct service to Love Field from any place beyond Texas and some other states  Effect: Passenger to purchase separate tickets  Southwest theme “Love”. pursued low fare strategy  To increase market share.

for short travels  Leading carrier .The Current Situation(1995)  Concentrates underutilized airports with low cost.dominated the markets as passengers increased two to three times  Profitable for last 21 years  Soutwest stocks earned highest returns . point to point flights  Competition not other airlines but road transportation.

while the larger airlines had costs up to 20 to 30 percent higher.Competitive Advantage  Advantage of company’s cost structure  Southwest’s costs averaged roughly 7.  Flight attendants and pilots help clean the aircraft or check passengers in at the gate.  High productivity of Southwest employees  Southwest pilots spend more time in the air than pilots at other airlines. respectively  It emphasizes customer service  Southwest has won the monthly Triple Crown 24 times .  Southwest had an average of 81 employees per aircraft while United and American had 157 and 152.1 cents.

.Leadership  CEO: Kelleher  Relaxed management style  Kelleher constantly interacts with customers and Southwest employees  He routinely visits maintenance facilities in the early morning hours  Each city is given a budget for parties for the employees and their families.

turnaround times. while preserving the values and special culture of Southwest Airlines.000 employees  While in many companies human resources is considered a backwater.  Mission Statement:  Recognizing that our people are the competitive advantage. we deliver the resources and services to prepare our people to be winners. to support the growth and profitability of the company. the People Department at Southwest is “like the keeper of the flame”  Continually feeding back information to employees such as on-time performance. number of customers boarded etc. .People Department  The People Department has a staff of about 100  Deal with approximately 18.

Recruitment  Extraordinarily  Focused  Peer selective to align with business strategy on positive attitude and teamwork Recruiting is emphasized  Recruiter take opinions from other staff members interacting with the applicant  Invest a lot in finding out common characteristics of effective performers and those possessing good behavior  Ensuring good experience for rejected candidates .

Training  Emphasis on team work and team building in all training programs  Virtually 100% internal training  Need specific trainings for front line leadership  “The Climb” – an effective way to foster change  “The Foster-Line Forum” – Long standing employees reflect on how company is doing and how it has changed over period of time  Two-Way communication – Not only to impart knowledge but also get feedback from employee’s .

34  Excellent Diversity .Southwest Work Force  Herb • 1 of the 5 lowest paid CEO of Dallas • Herb –gifted with labor relation talent  Everyone receives raise on their anniversary of employment  Compensation on seniority basis  Compensation – pay for performance per trip  Average age .

000 in voluntary contributions • During oil crisis.“ The people don’t think the Southwest as a business. equality. they think of it as a crusade” .000 to help defray fuel costs • Monetary help given to a former employee for his medical care  Continual efforts to preserve values that brought Southwest to its current position  Constant sharing of information thus enhancing mutual trust  According to Kelleher . cost consciousness.South West Spirit  Southwest tries hard to maintain its culture  Themes: Family along with customer service. dedication. hard work. fun  Examples reflecting family spirit: • Catastrophe fund of $500. employees raised $130.

and high productivity  Two direct threats: Both United and Continental had begun low cost airlines-within-an-airline to challenge Southwest directly. the American Airlines etc. They were not only directly imitating the Southwest strategy. .. the Trans World Airlines.g. the Continental Airlines. they were also using their policies and procedures. had been characterized by notoriously poor labor relations and authoritarian management.  Southwest’s policies stood out-labor peace. the Eastern Airlines. with few exceptions. e. An old adage at Southwest was not to provoke their major competitors. they had done more than provoke them. trust.The Competitive Threat  The industry overall. Obviously. they had challenged them directly. open sharing of information. non-adversarial relations.

currently flying with 59% seats filled ◦ Customer miffed as no priority boarding or meal service ◦ Flight attendants concerned about increased workloads ◦ Turnarounds taking over 30 minutes ◦ Pilots also were not satisfied due to their busy schedules . imitation of Southwest’s practices. concentration on East coast market  CALite rolled out in October 1993 received following reactions: ◦ Mixed early results.Continental Lite  Under the CEO Bob Ferguson. low fare flights (named Continental Lite or CALite) ◦ first-class service at business class prices Lower cost structure as compared to Southwest. Continental Airlines emerged from its second bankruptcy in April 1993   Continental’s plan to split the company into two operations: ◦ short-haul.

 Performance of Continental Lite Worst marks of any domestic airline in terms of customer complaints. on-time performance. and mishandled baggage  Continental lost $38.1  CALite still relied more heavily on one-stop and connecting passengers than did Southwest  Problems in the attitude of Ferguson and his people skills.5 million on revenues of $3. his style described as “harsh and uncommunicative” Wendy Zellner. profits have been weaker than expected.9 billion from April 1993 through the end of 1993  Chief Financial Officer Daniel Garton said that only 20 percent of CALite’s routes were losing money and noted that because USAir and Delta responded aggressively to Continental’s fare cuts. “Why Continental’s CEO Fell to Earth” 1 .