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Suggest You - Southwest Airlines Operations - A Strategic Perspective
Any event will have people who register to attend and fail to show up. There are many reasons for not attending, but it really comes down to priorities.No shows create problems for event planners ranging from wasted meals and poor event atmosphere to listening to excuses and deciding whether or not to charge the posted cancellation fee.Everyone, including the attendees would be better off if people would attend events as planned. Here are some reminders about how you might minimize the number of "no shows" to your event.Get their money (if your event has a fee)With online registration and real time credit card processing, this is easy. Once you have full payment, people will be more likely to show up and if they don't you still have their money.This is where you need a good refund and cancellation policy clearly stated on the registration form. Your policy will need to reflect the type of event that you are working on, but in general you don't want to make the policy too lenient as people may not take the registration seriously, nor do you want it to be too strict as people may be discouraged from registering. See our article about writing refund and cancellation policies.Put on a great eventThis really goes without saying, but if you can make attending your event the best option available then people will be motivated to show up. Try coming up with a list of benefits associated with your event such as who people will see, what they will learn, what great food will be served, etc. Creating an element of mystery may also help as curiosity can get the better of people and they will attend to see the secret new product or hear the latest industry changing news.Send a reminderPeople get reminders about dentist and hair appointments so why not for events? Sometimes people are busy and they simply forget about a commitment. A simple reminder email or phone call prior to the event will help to keep people committed.Pick a good date and timeDo your research and select a date and time that will get you the highest turnout. For example, if you are targeting accountants, the end of April would be poor timing as most accountants are being overworked at that time. So with best intentions they may initially commit to the event but many won't end up being there.Have a giveaway for attendeesA giveaway, discount or special deal available only to those who are in attendance can provide just enough extra incentive required to attend. Maybe you can negotiate with a sponsor to provide the items/deals.These few ideas may help reduce the number of no shows at your ev
Carriers like Southwest have a tremendous cost advantage over network airlines simply because their workforce generates more output per employee. In a study in 2001, the productivity of Southwest employees was over 45% higher than at American and United, despite the substantially longer flight lengths and larger average aircraft size of these network carriers. Therefore by its relentless pursuit for lowest labor costs, Southwest is able to positively impact its bottom line revenues.
Fuel Costs
Fuel costs is the second-largest expense for airlines after labor and account
Interviewing an expert and sharing their ideas with others is not a new concept. Experts have been doing radio and television interviews for decades. They use these platforms to create awareness for their company and what they stand for, as well as to educate listeners and ultimately sell products.The same techniques are used today using a different medium - teleseminars. Just like the radio, teleseminars can be something as simple as a recorded phone call between two people that may or may not allow listeners to ask questions.Let's take a look at this technique from two standpoints. How can getting yourself interviewed grow your business and, from a company standpoint, how can interviewing others grow your business?Let's start with how getting yourself interviewed can grow your business. It may sound pretty self-explanatory. You are "the expert" talking about a subject you are familiar with, being asked questions. In doing so you are exposed to a new group of prospects. There are few, if any, expenses to being interviewed over the phone. In fact, you can do it in your pajama's sitting on your coach at home. And if the call is recorded you can reuse the interview in other aspects of your business. You can have the audio put on a CD and use as hand-outs at events. You can post it for free (or sell it) on your web site. Many people include interviews they've done as bonuses in products they sell.How can interviewing others grow your business? Let's say you are a hospital and have several doctors on staff you would like to promote. A common marketing technique is for the doctor to give free seminars, to discuss the pros and cons of the procedures and services they offer. To the public these live seminars may appear to be a community service or an opportunity for them to learn about something they have been considering.Imagine doing the same thing, but over the phone. People who don't want to come in person maybe because of the bad weather or the distance required for travel, or maybe getting out of the house is difficult because of a handicap, learning over the phone is a great alternative. Many hospitals also post these live interviews on their web site for people to listen to whenever they want after the fact.But remember, there is a large portion of the community that does not use the internet or have ipods, so don't make the internet their only option to get the information. Most people are comfortable using the telephone and that is where the product should start.So to recap, interviewing experts over the phone involves no cost, people can listen in the comfort of their own home so they are more likely to attend, and you can reuse the material on your web site and make it a
Southwest Airlines is the largest airline measured by number of passengers carried each year within the United States. It is also known as a ‘discount airline’ compared with its large rivals in the industry. Rollin King and Herb Kelleher founded Southwest Airlines on June 18, 1971. Its first flights were from Love Field in Dallas to Houston and San Antonio, short hops with no-frills service and a simple fare structure. The airline began with one simple strategy: “If you get your passengers to their destinations when they want to get there, on time, at the lowest possible fares, and make darn sure they have a good time doing it, people will fly your airline.” This approach has been the key to Southwest’s success. Currently, Southwest serves about 60 cities (in 31 states) with 71 million total passengers carried (in 2004) and with a total operating revenue of $6.5 billion. Southwest is traded publicly under the symbol “LUV” on NYSE.
Facts:
* The first major airline to fly a single type of aircraft (Boeing 737s)
* The first major airline to offer ticketless travel system wide including a frequent flier program based on number of trips and not number of miles flown.
* The first airline to offer a profit-sharing program to its Employees (instituted in 1973).
* The first major airline to develop a Web site and offer online booking. In 2001, about 40 percent ($2.1 billion) of its passenger revenue was generated through online bookings at www.southwest.com. Southwest's cost per booking via the Internet is about $1, compared to a cost per booking through travel agents of $6 to $8.
Key competitive advantages:
* Low Operational costs / High Operational Efficiency
* Award winning customer service
* Human Resource practices / Work culture
Operations Analysis – Competitive Dimensions:
Southwest clearly has a distinct advantage compared to other airlines in the industry by executing an effective and efficient operations strategy that forms an important pillar of its overall corporate strategy. Given below are some competitive dimensions that will be studied in this paper.
1. Operational Costs and Efficiency
2. Customer Service
3. Employee/Labor Relations
4. Technology
1. Operational Costs and Efficiency
After all, the airline industry overall is in shambles. But, how does Southwest Airlines stay profitable? Southwest Airlines has the lowest costs and strongest balance sheet in its industry, according to its chairman Kelleher. The two biggest operating costs for any airline are – labor costs (approx 40%) followed by fuel costs (approx 18%). Some other ways that Southwest is able to keep their operational costs low is - flying point-to-point routes, choosing secondary (smaller) airports, carrying consistent aircrafts, maintaining high aircraft utilization, encouraging e-ticketing etc.
Labor Costs
The labor costs for Southwest typically accounts for about 37% of its operating costs. Perhaps the most critical element of the successful low-fare airline business model is achieving significantly higher labor productivity. According to a recent HBS Case Study, southwest airlines is the “most heavily unionized” US airline (about 81% of its employees belong to an union) and its salary rates are considered to be at or above average compared to the US airline industry. The low-fare carrier labor advantage is in much more flexible work rules that allow cross-utilization of virtually all employees (except where disallowed by licensing and safety standards). Such cross-utilization and a long-standing culture of cooperation among labor groups translate into lower unit labor costs. At Southwest in 4th quarter 2000, total labor expense per available seat mile (ASM) was more than 25% below that of United and American, and 58% less than US Airways.
Carriers like Southwest have a tremendous cost advantage over network airlines simply because their workforce generates more output per employee. In a study in 2001, the productivity of Southwest employees was over 45% higher than at American and United, despite the substantially longer flight lengths and larger average aircraft size of these network carriers. Therefore by its relentless pursuit for lowest labor costs, Southwest is able to positively impact its bottom line revenues.
Fuel Costs
Fuel costs is the second-largest expense for airlines after labor and account
Localization, in a general sense, means to adapt a particular service to a different culture or many different cultures. It is one of the methods used by businesses to expand into other countries. Localization helps to build trust.The first traces of localization can be seen over fifty years ago when globalization began. Companies coming out of the Great Depression had to build up their reserves and decided to set up branches in other countries. It was impossible to do business in a foreign land without first adapting to the culture. Thus, these multinational companies began reworking their strategies, converting currencies, changing languages in advertisements, etc. - all to attract their target countries.These company strategies worked. Today, almost all big companies are localized in several foreign countries. With the infiltration of the Internet into businesses, another huge aspect of localization has come into play - that of website and software localization. Websites are user friendly to other cultures and communities.The concept of localization is not new, but it has come to the forefront with modern implications. International localization means adapting a particular service, making it accessible all over the world. Of course, localization has to work under strict global censorship. There are issues that arise, like language and cultural sensibilities, currency conversions, weights and measures conversions and different time zones. Despite working under these strict conditions, many companies have managed to come up with superlative localized products.The term "localization" is used pertaining to computers and the Internet. But this term has wide implications in various fields. It can mean different things in different studies. In biology, localization means tracing an object in the body, whereas in telecommunication, it can mean tracing a phone's user. Localization is the name of certain techniques in modular abstract mathematics, sound mechanics and matter physics.
Facts:
* The first major airline to fly a single type of aircraft (Boeing 737s)
* The first major airline to offer ticketless travel system wide including a frequent flier program based on number of trips and not number of miles flown.
* The first airline to offer a profit-sharing program to its Employees (instituted in 1973).
* The first major airline to develop a Web site and offer online booking. In 2001, about 40 percent ($2.1 billion) of its passenger revenue was generated through online bookings at www.southwest.com. Southwest's cost per booking via the Internet is about $1, compared to a cost per booking through travel agents of $6 to $8.
Key competitive advantages:
* Low Operational costs / High Operational Efficiency
* Award winning customer service
* Human Resource practices / Work culture
Operations Analysis – Competitive Dimensions:
Southwest clearly has a distinct advantage compared to other airlines in the industry by executing an effective and efficient operations strategy that forms an important pillar of its overall corporate strategy. Given below are some competitive dimensions that will be studied in this paper.
1. Operational Costs and Efficiency
2. Customer Service
3. Employee/Labor Relations
4. Technology
1. Operational Costs and Efficiency
After all, the airline industry overall is in shambles. But, how does Southwest Airlines stay profitable? Southwest Airlines has the lowest costs and strongest balance sheet in its industry, according to its chairman Kelleher. The two biggest operating costs for any airline are – labor costs (approx 40%) followed by fuel costs (approx 18%). Some other ways that Southwest is able to keep their operational costs low is - flying point-to-point routes, choosing secondary (smaller) airports, carrying consistent aircrafts, maintaining high aircraft utilization, encouraging e-ticketing etc.
Labor Costs
The labor costs for Southwest typically accounts for about 37% of its operating costs. Perhaps the most critical element of the successful low-fare airline business model is achieving significantly higher labor productivity. According to a recent HBS Case Study, southwest airlines is the “most heavily unionized” US airline (about 81% of its employees belong to an union) and its salary rates are considered to be at or above average compared to the US airline industry. The low-fare carrier labor advantage is in much more flexible work rules that allow cross-utilization of virtually all employees (except where disallowed by licensing and safety standards). Such cross-utilization and a long-standing culture of cooperation among labor groups translate into lower unit labor costs. At Southwest in 4th quarter 2000, total labor expense per available seat mile (ASM) was more than 25% below that of United and American, and 58% less than US Airways.
Carriers like Southwest have a tremendous cost advantage over network airlines simply because their workforce generates more output per employee. In a study in 2001, the productivity of Southwest employees was over 45% higher than at American and United, despite the substantially longer flight lengths and larger average aircraft size of these network carriers. Therefore by its relentless pursuit for lowest labor costs, Southwest is able to positively impact its bottom line revenues.
Fuel Costs
Fuel costs is the second-largest expense for airlines after labor and account
Spiral Binders are known for durability. They are most widely used in blank notebooks. Spiral notebooks prove to be quite handy when you need to take quick notes. Spiral Binders are basic constructions of loose-leaf paper bound by a spring-like wire that runs through the holes along the sides of the pages. These wires could be made of either plastic or metal.Spiral binding is a great way to present documents in a long-lasting and attention-getting way. They are ideal for intensive use and perfect for all environments. They are designed in such a manner that they are able to provide the highest standards of quality for all types of mid-volume binding. Besides notebooks, these are often used for preserving and organizing documents like quotations, product portfolios and handbooks.Spiral Binders have a number of advantages over other types. Firstly, the book will lie flat when open. You can add more pages even after the initial printing. When you want a more robust solution and functionality is a priority then Spiral Binders are used, because this method is ideal for low-quantity orders.The Spiral Binders are available in all sorts of colors, such as red, white, black and many more. Usually the largest spiral holds a maximum of 225 sheets, but you can get one custom-made for yourself that can hold a larger number of pages. There are some smaller Spiral Binders also available, that can hold only up to 150 pages. Most of them are manufactured on electrically operated punching systems. These systems employ integrated spiral cutting and folding, along with automatic spiral insertion. Good spiral-binding systems can punch together 250 sheets at a time. Customized Spiral Binders can showcase your style.
Operations Analysis – Competitive Dimensions:
Southwest clearly has a distinct advantage compared to other airlines in the industry by executing an effective and efficient operations strategy that forms an important pillar of its overall corporate strategy. Given below are some competitive dimensions that will be studied in this paper.
1. Operational Costs and Efficiency
2. Customer Service
3. Employee/Labor Relations
4. Technology
1. Operational Costs and Efficiency
After all, the airline industry overall is in shambles. But, how does Southwest Airlines stay profitable? Southwest Airlines has the lowest costs and strongest balance sheet in its industry, according to its chairman Kelleher. The two biggest operating costs for any airline are – labor costs (approx 40%) followed by fuel costs (approx 18%). Some other ways that Southwest is able to keep their operational costs low is - flying point-to-point routes, choosing secondary (smaller) airports, carrying consistent aircrafts, maintaining high aircraft utilization, encouraging e-ticketing etc.
Labor Costs
The labor costs for Southwest typically accounts for about 37% of its operating costs. Perhaps the most critical element of the successful low-fare airline business model is achieving significantly higher labor productivity. According to a recent HBS Case Study, southwest airlines is the “most heavily unionized” US airline (about 81% of its employees belong to an union) and its salary rates are considered to be at or above average compared to the US airline industry. The low-fare carrier labor advantage is in much more flexible work rules that allow cross-utilization of virtually all employees (except where disallowed by licensing and safety standards). Such cross-utilization and a long-standing culture of cooperation among labor groups translate into lower unit labor costs. At Southwest in 4th quarter 2000, total labor expense per available seat mile (ASM) was more than 25% below that of United and American, and 58% less than US Airways.
Carriers like Southwest have a tremendous cost advantage over network airlines simply because their workforce generates more output per employee. In a study in 2001, the productivity of Southwest employees was over 45% higher than at American and United, despite the substantially longer flight lengths and larger average aircraft size of these network carriers. Therefore by its relentless pursuit for lowest labor costs, Southwest is able to positively impact its bottom line revenues.
Fuel Costs
Fuel costs is the second-largest expense for airlines after labor and account
Do you suspect that you have black mold in your Los Angeles home? Black mold is most commonly a greenish black color. In most cases, you can tell right away whether or not the mold in your home is black mold or not. While it is always advised that you get mold removed and taken care of, there are some types of mold that you should have removed right away. One of those types of mold is black mold.One of the many reasons why Los Angeles black mold removal is so important is because of the health risks. Black mold is sometimes considered the most toxic of all molds. It has been known to cause serious health problems, particularly concerning one’s ability to breathe property. In some cases, particularly with infants or the elderly, black mold has contributed to death. That is why it is extremely important that your home undergo a Los Angeles black model removal project if it needs to be done.Although the health dangers associated with black mold are the most important reason why your home should undergo a Los Angeles black mold removal project if you have black mold in your home, but there are other reasons as well. One of those reasons is the value of your home. Mold, particularly black mold, can significantly drive down the value of your home. One of the reasons for that are the dangers. Homeowners are advised against living in homes that have black mold. Therefore, if you are looking to sell your home, you should seriously consider having your home undergo a Los Angeles black mold removal project first.If you are unsure as to whether or not the mold in your home is black mold, you may want to think about contacting a mold inspector. These inspectors have their knowledge plus a number of helpful tools that can be used to determine whether or not the mold in your home is back mold. Also, in many cases, you will find that many Los Angeles mold inspectors also double as Los Angeles black mold removal specialists; therefore, one phone call can get your black mold problem solved in no time at all.When a professional Los Angeles black mold removal specialist shows up to complete the mold removal process, you may want to ask them a few questions. Many times, we create the black mold in our homes, by not focusing on the temperature or moisture in our homes. By speaking with a Los Angeles black mold removal specialist, you could get inside information or tips on how to prevent a black mold reoccurrence from happening. Most mold removal specialist would be more than happy to educate you on black mold, how to prevent it from returning again, as well as dangers of it.
Labor Costs
The labor costs for Southwest typically accounts for about 37% of its operating costs. Perhaps the most critical element of the successful low-fare airline business model is achieving significantly higher labor productivity. According to a recent HBS Case Study, southwest airlines is the “most heavily unionized” US airline (about 81% of its employees belong to an union) and its salary rates are considered to be at or above average compared to the US airline industry. The low-fare carrier labor advantage is in much more flexible work rules that allow cross-utilization of virtually all employees (except where disallowed by licensing and safety standards). Such cross-utilization and a long-standing culture of cooperation among labor groups translate into lower unit labor costs. At Southwest in 4th quarter 2000, total labor expense per available seat mile (ASM) was more than 25% below that of United and American, and 58% less than US Airways.
Carriers like Southwest have a tremendous cost advantage over network airlines simply because their workforce generates more output per employee. In a study in 2001, the productivity of Southwest employees was over 45% higher than at American and United, despite the substantially longer flight lengths and larger average aircraft size of these network carriers. Therefore by its relentless pursuit for lowest labor costs, Southwest is able to positively impact its bottom line revenues.
Fuel Costs
Fuel costs is the second-largest expense for airlines after labor and account
More often than not, we make decisions impulsively, without dwelling on too much thought about what we want and without considering other options, guidelines and criteria to base our decisions with. We can always get away with this on small decisions such as deciding on the flavor of Starbucks coffee we want; whether this is decaf or not; medium or large; with cream or without and many other trivial options.This is okay but this is not applicable when we are considering things that concern the financial aspect of our lives - financing, refinancing, mortgages, insurance, investments and yes, even choosing the bank where we could save and store our money. Here are some guidelines you have to consider when you want to invest portions of your money into banks:1. Location. When choosing banks, you have to consider their locations. If you see yourself visiting your bank or banks in a regular basis, then the best option would be to look for banks nearest to wherever you conduct your business or in your home.2. Accessibility of ATM Machines. Choose banks where a sufficient number of their ATM machines are accessible to you.3. In relation to number 2, check the functionalities offered by the ATM machines of these banks. Check if it has the following features: - Do the banks' ATM machines allow deposits to be made in it? - Do the banks' ATM machines printout statements about your accounts such as your available balance, etc.? - Do the banks' ATM machines enable a client to order a check book?4. Telephone Banking. If you are one of those people who cannot go to banks during banking hours, then one of the features you have to look for in banks is the availability of telephone banking service. With this, you can make queries and transactions in your banks anytime, anywhere usually 24/7 all year. Telephone Banking allows you to do some of these transactions in your banks: - Transfer your money from your accounts in your banks to pay your bills - Telephone banking in banks enables cancellation and change of current orders - Check the balance of your account - Telephone banking in banks allows you to apply for other products or services from banks5. Internet Banking. Internet banking features in banks also allows the following services offered by Telephone Banking wherein transactions and inquiries can be done via the Internet through the Internet portals of these banks.If you are a business person and you need a bank or banks for your small business, here are some other aspects and guidelines you have to consider when choosing the right bank/banks for you:1. Aside from the first general consideration on the location of the banks, you have to consider if the banks understand the natur
Carriers like Southwest have a tremendous cost advantage over network airlines simply because their workforce generates more output per employee. In a study in 2001, the productivity of Southwest employees was over 45% higher than at American and United, despite the substantially longer flight lengths and larger average aircraft size of these network carriers. Therefore by its relentless pursuit for lowest labor costs, Southwest is able to positively impact its bottom line revenues.
Fuel Costs
Fuel costs is the second-largest expense for airlines after labor and accounts for about 18 percent of the carrier's operating costs. Airlines that want to prevent huge swings in operating expenses and bottom line profitability choose to hedge fuel prices. If airlines can control the cost of fuel, they can more accurately estimate budgets and forecast earnings. With growing competition and air travel becoming a commodity business, being competitive on price was key to any airline’s survival and success. It became hard to pass higher fuel costs on to passengers by raising ticket prices due to the highly competitive nature of the industry.
Southwest has been able to successfully implement its fuel hedging strategy to save on fuel expenses in a big way and has the largest hedging position among other carriers. In the second quarter of 2005, Southwest’s unit costs fell by 3.5% despite a 25% increase in jet fuel costs. During Fiscal year 2003, Southwest had much lower fuel expense (0.012 per ASM) compared to the other airlines with the exception of JetBlue as illustrated in exhibit 1 below. In 2005, 85 per cent of the airline’s fuel needs has been hedged at $26 per barrel. World oil prices in August 2005 reached $68 per barrel. In the second quarter of 2005 alone, Southwest achieved fuel savings of $196 million. The state of the industry also suggests that airlines that are hedged have a competitive advantage over the non-hedging airlines. Southwest announced in 2003 that it would add performance-enhancing Blended Winglets to its current and future fleet of Boeing 737-700’s. The visually distinctive Winglets will improve performance by extending the airplane’s range, saving fuel, lowering engine maintenance costs, and reducing takeoff noise.
Point-to-Point Service
Southwest operates its flight point-to-point service to maximize its operational efficiency and stay cost-effective. Most of its flights are short hauls averaging about 590 miles. It uses the strategy to keep its flights in the air more often and therefore achieve better capacity utilization.
Secondary Airports
Southwest flies to secondary/smaller airports in an effort to reduce travel delays and therefore provide excellent service to its customers. It has led the industry in on-time performance. Southwest has also been able to trim down its airport operations costs relatively better than its rival airlines.
Consistent aircrafts
At the heart of Southwest's success is its single aircraft strategy: Its fleet consists exclusively of Boeing 737 jets. Having common fleet significantly simplifies scheduling, operations and flight maintenance. The training costs for pilots, ground crew and mechanics are lower, because there's only a single aircraft to learn. Purchasing, provisioning, and other operations are also vastly simplified, thereby lowering costs. Consistent aircrafts also enables Southwest to utilize its pilot crew more efficiently.
E-Ticketing
The idea of ticketless travel was a major advantage to Southwest because it could lower its distribution costs. Southwest became electronic or ticketless back in the mid-1990s, and today they are about 90-95% ticketless. Customers who use credit cards are eligible for online transactions, and today Southwest.com bookings account for about 65% of total revenue. The CEO Gary Kelly thinks that this idea would grow further and that he wouldn't be surprised if e-ticketing accounted for 75% of Southwest’s revenues by end of 2005. In the past, when there was a 10% travel agency commission paid, it used to cost about $8 a booking. But currently, Southwest is paying between 50
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