LOGISTICS GROUP ASSIGNMENT

Southwest Airlines

1. Territory

Southwest Airlines currently operates flights to 41 states in the United States, the

District of Columbia, the Commonwealth of Puerto Rico, and five near-international

countries including Aruba, Bahamas, Jamaica, Mexico and Puerto Rico.

Figure 1. Southwest Airlines Cargo’s service map

Source: http://www.swacargo.com/swacargo/stationHours.htm

2. Strategy

2.1. Mission

The mission of Southwest Airlines is dedication to the highest quality of customer

service delivered with a sense of warmth, friendliness, individual pride, and

Company Spirit.

To their employees

Their employees are committed to be provided a stable work environment with equal

opportunity for learning and personal growth. Creativity and innovation are

encouraged for improving the effectiveness of Southwest Airlines. Above all,

employees will be provided the same concern, respect, and caring attitude within the

organization that they are expected to share externally with every Southwest customer.

To the communities

Southwest Airlines aims at being the hometown airline of every community they

serve, so that those communities will sustain and nurture them with their support and

loyalty. They realize the importance of embracing each community with the Southwest

Spirit of involvement, service, and caring to make those communities better places to

live and work.

To the planet

Southwest Airlines strive to be a good environmental steward across their system in all

of their hometowns, and one component of their stewardship is efficiency, which, by

its very nature, translates to eliminating waste and conserving resources. They tend to

use cost-effective and environmentally beneficial operating procedures (including

facilities and equipment) to reduce the amount of materials used, when combined with

their ability to reuse and recycle material, preserves these environmental resources.

To their stakeholders

Southwest Airlines’ vision for a sustainable future is one where there will be a balance

in their business model between employees and community, the environment, and

their financial viability. In order to protect the world for future generations and uphold

their commitments to the employees, customers, and other stakeholders, they strive to

lead their industry in innovative efficiency that conserves natural resources, maintains

a creative and innovative workforce, and gives back to the communities in which they

live and work.

2.2. Vision

“Our vision is to become the world’s most loved, most flown, and most

profitable airline”

SWA’s vision clearly state that being a low cost airline does not mean low quality

services, they want to gain customer’s trust and loyalty. They understand that one

people have loyalty rather than hundreds of people do not come back again, they want

to be the world’s most loved.

“To connect People to what's important in their lives through friendly,

reliable, and low-cost air travel”

They have a desire to develop their scope both domestic and abroad by being the

largest reasonable price airlines. They also want to become a successful company as an

efficiently, low cost carriers in both short and long haul. On the other hand, they define

themselves as an airline with the most productive, friendly and professional workforce

to guarantee the best flight possible for every passenger.

3. Tactical level activities

Cutting costs and keeping fares low: the primary tactical goal for Southwest

Airline.

Enhance competitiveness of Southwest airline on condition of significant

pressure from other low fare airlines and attract more customers with great

loyalty, position a good image in customers’ insights and raise profits while cut

down expenses.

The organization cuts costs in its maintenance program by doing more work on

a plane when it is in for a check instead of bringing it in three different times. Time: Limiting the turnaround time between flights to 20 minutes, compared to

up to an hour for other airlines. Place: Southwest usually flies to less-congested airports, thus saving time and

money by avoiding traffic. No dividing classes: There is just one class of seating, doing away with the

distinction between coach and first class. Even the boarding passes are reusable,

made of plastic. In flight services: The airline saves by not feeding passengers: it serves mostly

peanuts, no in-flight meals.

Save cost but still provide transportation services at reasonable quality.

Improving services quality by making arrival times more reliable.

“Reliable airline” – trustworthy.

Erasing old policy as guaranteed seat reservations before ticketing, so that no-

shows will not complicate (and therefore delay) the boarding process.

Passengers paying extra for “business select” fares would be placed at the front

of the line. Assuring that turning planes around in exactly 20 minutes, therefore on-time

departures are more apt to produce on-time arrivals.

4. Operating level activities

The company developed operating strategy as a set of strategic decisions centered on

reducing operating costs and offsetting the productivity disadvantages of short-haul,

point-to-point flying.

First, the company focuses on quick aircraft turnaround at the gate, minimizing

the time on the ground, the time when airline’s most costly assets, its planes, are not

utilized. Turning planes around quickly at the gate results in planes being able to log

more hours in the air, increasing their utilization. This strategy, however, has kept

them out of some markets where such a quick turnaround is not possible.

Second, Southwest uses a standardized fleet of Boeing 737 jets, which reduces

maintenance and pilot training expenses. The crews and spare parts are

interchangeable and maintenance cycles more predictable. The single plane type also

makes fueling, cleanup, catering, and ramp operations such as unloading and loading

of baggage and cargo, more efficient and routine, which helps with the quick

turnarounds.

Third, when possible, Southwest uses smaller airports with less traffic and

congestion with easy access to large metropolitan areas. They started at Dallas

Love Field Airport, a much shorter drive to down-town compared with American

Airlines dominated DFW. Some other examples are Chicago’s Midway and Houston’s

Hobby airports, which ended up losing carriers to much larger and more modern

airports such as Chicago’s O’Hare and Houston International.

Fourth, Southwest offers “positively outrageous”, but “no frills” customer

service. In particular, in-flight meals are not served, passengers get only peanuts.

There is no baggage transfer to other airlines and the seats are not reserved. This did

away with printing boarding passes, eliminated the time required to process them at

the gate, which allowed for much quicker boarding process, speeding the plane

turnaround time.

All these operational strategies required an extremely high level of coordination and

cooperation between various employee groups: pilots, flight attendants, gate operators,

operations managers, ramp managers, baggage transfer and cargo handlers, mechanics,

fuelers, cabin cleaners, and caterers.

Group members

Name Student ID

Hoàng Ngọc Mai

Nguyễn Thị Trang

Vũ Phương Thảo

Mai Thu Hiền

Thân Thị Tuyết

Phạm Mai Linh

Nguyễn Thị Thúy

Nguyễn Hà Phương

Phan Hà Phượng Vân

Nguyễn Thị Thu Thảo

Trương Thị Ánh Nguyên

Nguyễn Thị Thu Thảo

Nguyễn Minh Trang

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