Mgt 361 - Southwest Airline Analysis

Xiaoyu Xu

MGT 361

4/4/2018

Southwest Airlines

The airline industry did significant contribution to the world economy. Airline becomes one of the most important components of doing business. It could transport goods across different region in one day, it could also support businessmen negotiate with partners in different countries in one day. Not only for business, the number of leisure trips is also increasing year by year.

The current eternal environment for airline industry is very well and there is also a good outlook of it. According to Zacks Equity Research, “On Dec 22, 2017, President Trump signed the much-anticipated tax bill into law (Tax Cuts and Jobs Act). Under the $1.5 trillion tax overhaul package, corporate tax rates have been slashed to 21% from 35%. The significant reduction in corporate tax rate is likely to boost cash flow, which in turn will aid the bottom lines of carriers. Naturally, low-cost carriers like Alaska Air, Southwest Airlines (LUV) and JetBlue have declared bonuses ($1,000 per member) following the tax overhaul. Among legacy carriers, American Airlines has declared a bonus.” (2018).

Southwest Airlines was founded by Rollin King and Herb Kelleher in more than 46 years ago. They started the business with a very simple goal: send passengers to their wanted destinations on time, with lowest price and satisfying service.

Southwest develops their mission based on their primary goal, “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” (Southwest Airlines, 2018). They also have their commitment to their employees, communities and the planet. They promise to provide their employees a stable and friendly work environment. “The 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” (Southwest Airlines, 2018). They will also try their best to become the hometown airline of every community they serve and make them better places to live. Southwest Airlines also claims that, they will try the best to reuse, recycle material and preserves environmental resources for the earth.

The business strategy of Southwest Airlines works together with its commitment. SWA tries to hold the balance between shareholders, employees, customers, and other stakeholders. They claims that, “we will strive to sustain our unmatched profitability record in the industry, efficiency that conserves natural resources, fostering a creative and innovative workforce, and giving back to the communities in which we work and live” (Southwest Airlines, 2018).

Southwest Airlines receives more than 100 job applications in every 5 minutes. However, the hiring rate is not high. According to the report of Julie Weber, “So far this year(2015), for example, we’ve reviewed 287,422 resumes, chosen 102,112 candidates to interview, and hired only 6,582 people, or less than 2% of all applicants” (2015).

Southwest Airlines tries to find employees who would like to engaged in their collaborative, mission-driven culture. At the same time, SWA will provide good salaries, benefits and opportunities for development and advancement. Julie also said that, SWA is not mainly looking for skilled people, but three attributes, warrior spirits ( a desire to excel, act with courage, persevere and innovate), servant’s hearts (respectively and proactively serve customers) and fun-loving attitudes (passion, joy) (2015).

During the training process, SWA not only offer their employees the skills to do their jobs, but also training them the ways to advance their careers. They provides internal training and encourage their employees to attend external training to develop themselves. SWA claims that, “We are committed to and prioritize compliance with the training requirements of the appropriate governing organizations such as the Federal Aviation Administration, U.S. Department of Transportation, U.S. Department of Homeland Security, Occupational Safety & Health Administration, U.S. Environmental Protection Agency, and U.S Food & Drug Administration. We also offer a variety of additional training opportunities to our Employees. These opportunities for continued development include programs focused on Living and Leading the Southwest Way” (2011).