Case – SWA

at Baltimore
Submitted by-
Section B,
•Nishat alam Choudhary – 19FPM004
Group - 6 •Ayush Bhatnagar – 19PGP031
•Chadralekha – 19PGP037
•Divyam Bhadoria – 19PGP052
Cost leadership :
• Using only boeing 737 carriers to maintain interchangeability,
reduce maintenance cost and better training of crew and pilots.
Q1) How does
• Limited in flight services like meals to cut on unnecessary
operations.
Southwest
• Providing open single class seating to save software costs and Airlines
encourage customers to board early.
• Reducing on ground time of flights. compete?
• Filling fuel where price is lower.
What are the
Differentiation: advantages
• Customer satisfaction is priority and employees are trained to
delight customers.
relative to
• Hiring employees who fit in well with family oriented culture. other airlines?
• Decentralised system of working and giving more decision power
to employees who are onboard rather than those at headquarters.
• Cross- training among departments to build tight relations.
Q1) How does Focus:
Southwest • In order to avoid disrupting flight
Airlines operations and to maximize aircraft
compete? time in air less crowded airports are
What are the being used instead of new ones.
• Southwest airlines considers buses
advantages
and trains their competitors unlike
relative to others airlines.
other airlines? • Highest frequency of flight in the
industry.
Q. The plane turnaround process requires coordination amongst twelve functional groups, matching an incoming
plane to its new passengers and baggage in a brief period of time. Critically evaluate SWA’s turnaround process at
Baltimore – how is the process working?

A high level of coordination was needed between among 12 distinct functional groups: pilots, flight attendants, gate agents, ticket agents, operations
agents, ramp agents, baggage transfer agents, cargo agents, mechanics, fuelers, cleaners and caterers. These groups were stratified by status,
expertise, and were evenly spread out at the terminal. These groups of workers traditionally did not have a good history of cooperation. Southwest
invested time and money in selecting employees for attitude, teamwork and service orientation.  
• Flight Connections
SWA’s reservation system does not allow passengers to book connecting flights within the airline that has a connection time of less than 35 minutes
between the arrival of the first flight and the departure of the second flight. This helps to ensure that there are no customers who are missing
connections.  
• Ground Operations
Other airlines centralised their aircraft turnaround, ground operations and managed daily flights from a headquarters using an integrated computer
system. Southwest de-centralised this coordination, leaving it up to employees on site in airport stations. Operations supervisors onsite had to plan
ahead to identify possible problems throughout the day and would come up with a design solution to these challenges e.g. delaying a plane for
departure if the incoming flight had connecting passengers. 
• OTIS – Operations Terminal Information System
Southwest operations staff would update this internally developed system for tracking flight information. It contained information regarding:
passengers, revenue, baggage, weight, fuel as well as flight times and delays.
Why is the operational performance
eroding at Baaltimore?

• Dependence on single aircraft supplier (Boeing)

• The current Boeing 737 jets may not be enough to
fly long-haul flights
• Increasingly costs
• Entertainment and food are two unavoidable issues
for Southwest when it comes to long-haul flights
and international flights.
• Weak relations with labour unions
• Leadership management and challenges
What would you recommend Matt Hafner to do?
Southwest Airlines were able to operate their business relatively undisturbed. It was only in poor economic conditions that suddenly Southwest Airlines' method of operation became the ideal
model for its competitors. While the publicity is beneficial in raising employee morale, and raising stock prices; Southwest Airlines is now the target of their competitors' focus.

Engage in price war

• A tactic that Southwest Airlines can do to inflict damage to competitors is to slash prices. This type of tactic is typical of a big company that has a monopolistic rule in an industry squeezing
other competitors. This tactic is advisable when competitors are near bankruptcy or are in dire situations. Because competitors cannot match Southwest Airlines' prices, the most they can do
is narrow the gap of the price difference. Southwest Airlines, which has consistently made a positive profit, can increase the price gap by lowering their prices. Southwest Airlines will incur
losses from this move, but the goal of this move is to drag the competitors further into debt. Because this move affects both companies, this move is very risky and should not be done
unless Southwest Airlines is sure that their competitor is near bankruptcy. Possible reasons for this move would be to eliminate the weakest competitor in the industry, which would free up
the market held by that company.
 
Expand customer reach
• Southwest Airlines, however, is not without weaknesses. No matter how successful, Southwest Airlines serves only 29 states and cannot compete against the bigger companies that serve
nationally or even internationally. Furthermore, Southwest Airlines does not utilize a hub system that allows for bigger competitors to reach further out. Such competitors are aware that
they cannot match Southwest Airline's prices; their market is larger and is not able to offer cheaper tickets at the cost of no in-flight meals. Instead, competitors narrow the price difference
between Southwest Airlines and themselves and stress on the quality of these frills. Others, through use of flight hubs, are the only ones who can economically serve remote customers.

Expand Fleet
Another weakness of Southwest Airlines is their preference of Boeing 737s. Being limited to one type of airplane leaves them with little flexibility when the model receives a bad reputation or
a critical flaw is discovered. Such would be a costly venture for this company, who've used only one type of airplane and in the face of a dire situation would face a costly venture of finding
replacements or counteracting bad publicity.

Stop flight connections

• Southwest Airlines needs to stop allowing customers to book connecting flights through their network. Instead, customers should book two separate flights and treat these as independent of
each other. This means that the onus is on the customer to allow enough time for connections and possible delays. This alleviates the stress put on ground operations in the airports and will
save the airline both time, resources and costs. It will also help to ensure that turnaround times are kept at 15 minutes.