Company Overview

Southwest Airlines has gained a name for being a happy, friendly airline with whom to fly in an era in which flying is generally associated with hassle and inconvenience. This section explores Southwest’s communication and leadership protocol in an attempt to gain insight into the company’s culture and the strategies they use.

There is substantial information on Southwest’s website regarding their mission and culture. The client-facing website instantly garners shock value by announcing, “Low fares…plus your bags fly free. That’s just how we roll” (Southwest Airlines, n.d.; Note: as of the writing of this paper, the splash screen has been changed). In an age in which the majority of domestic airlines charge for every piece of checked baggage, and sometimes even for carry-on luggage (FareCompare, n.d.), the concept of free checked luggage (two pieces) is unusual and very attractive, especially during the holidays when the accumulation of presents may not fit into the meager dimensions of carry-on luggage. Southwest’s Glassdoor overview (Southwest Airlines, n.d.) states the following mission: “…dedication to the highest quality of Customer Service delivered with a sense of warmth, friendliness, individual pride, and Company Spirit” (Southwest Overview, paragraph 1).

It is a telling point that within the first four pages of employee reviews on Glassdoor, over half had “Approves of CEO” selected, with only two reviews including “Disapproves of CEO.” Interestingly, the two dissenting reviews had both “Recommends” and “Positive Outlook” selected, suggesting high employee morale and general satisfaction with the company (Glassdoor, 2017–2018). The combination of clear client-centric priorities and employee-centric elements points to an overall culture that is geared less toward the profit margin and more toward keeping clients and employees happy, an alternative and perhaps more holistic approach to said profit margin.

LinkedIn is generally a good starting point to research a company’s leadership and management teams; anecdotally speaking, this information is easier to glean from LinkedIn than from many companies’ client-facing websites. A glance down Southwest’s LinkedIn page revealed an ABC news report about Southwest’s “Social Care Team,” a team specifically in place to monitor and respond to clients’ social media activity around travel experiences in real time (Kerley, 2017). The report shows how each team member is set up with two monitors, one showing social media activity (Twitter, Facebook, etc.), the other allowing real-time conversation with the Southwest operations team. The Social Care team monitors activity and responds to often frustrated clients in real time and takes steps to diffuse the problems the clients are encountering. The report features senior representatives from the Social Care team, the Senior Director of Social Business, and the Vice President of Network Operations Controls, suggesting that there is an entire vertical branch of management and operations dedicated to solving customer issues. Social media began as a bane to airline operations, as evidenced by the social media outrage over incidents such as United Airlines’ eviction of an Asian-appearing doctor off a flight (Denyer, 2017), but Southwest seems to have been able to turn this very powerful tool to their advantage, appearing proactively caring and responsive to their customers.

This implies that internal feedback systems are rigorous and well implemented, though there does not seem to be much information publicly available about what those systems consist of. Internally, Southwest’s Chairman and CEO, Gary Kelly, leads the communication culture from the top down with weekly “shout outs” to deserving employees; the airline’s monthly magazine, Spirit, also highlights a different employee’s exemplary customer service each month. Southwest also provides incentives in the form of awards and recognition programs, and videos of real customer service stories that are circulated internally (Gallo, 2014).

Linda Rutherford, Southwest’s Senior Vice President and Chief Communications Officer since 2017 (ENP Newswire, 2017), interacts regularly with the public by giving prolific media statements and interviews, speaking of issues very much within her purview, such as crisis management (Ascierto, 2017) and the effects of technology on the media and publishing industries (Grasso, 2017). That she calls herself Southwest’s “chief problem solver” (paragraph 2) indicates that she extends the prolificacy of her communications to her internal audiences as well.

Southwest appears to have a reasonably open communications system approach, both internally and externally. The internal audience comprises some 55,000 employees (Southwest Airlines, 2017); of these, 44% are engaged in customer, ground and fleet services; 43% are flight crew; 7% are maintenance crew, and the remaining 6% are management, accounting, marketing and clerical staff (Southwest Airlines, 2010). Southwest’s external audience includes the 120 million passengers served annually (Southwest Airlines, 2017) and shareholders; the latter received $274 million in dividends and $1.6 million in stock buy-backs (paragraph 5). The 120 million passengers are made up largely of families, leisure travelers, and, more recently, business travelers. Southwest has also been designated a “military friendly” airline (Southwest Airlines, 2017), suggesting that a significant portion of its external audience is related in some way to the military, though sufficient data on military statistics is not available. The myriad methods of communication ranging from social media to robust—and available—customer service pathways ensure that the airline’s maintenance mechanism is preserved: the open, two-way communication using social media, for example, ensures that client concerns are quickly and efficiently addressed in real time, preventing those issues from escalating, thereby acting as an adaptive mechanism well able to handle external elements that may interfere with usual operations (Almaney, 1974). The Social Care team acts as the detector for Southwest: in the majority of cases, the team is not responding to direct messages from frustrated clientele; rather they monitor communication expressing frustration to the outside world. The team detects issues, collaborates with the various operations team to make decisions on those issues, and then effects those decisions.

When Southwest was faced with a crisis in July of 2013, when an accident occurred at LaGuardia airport, Southwest’s public relation teams were proactive and speedy in their communications with their audience, their clients and passengers. They used social media actively (the report mentions Twitter specifically) and continued to provide updates and follow-up information, effectively controlling the image and story of the airline (Frischling, 2013).

These two examples represent an open feedback loop, wherein communication is passed proactively through to the external environment and thereby maintaining what Almaney (1974) describes as “a state of dynamic equilibrium” (p. 40). This fits in perfectly with Southwest’s stated intention of continuous improvement.

In conclusion, Southwest Airlines appears to be a solid example of how a company can implement exemplary internal and external communications protocols to boost employee satisfaction and productivity as well as keep their stakeholders (passengers) choosing their service repeatedly.

 

 

Analysis of Leadership Communications

Southwest’s internal communications protocols begin from the top-down. According to Ginger Hardage, Southwest’s chief communications officer, employees’ accomplishments, triumphs and successes are celebrated in myriad ways, including company newsletters, dinners held in their honor, and videos featuring the CEO at staff meetings. Ms. Hardage stated also that Southwest “43,000 commendations a year, from both inside and outside the company” (Makovsky, 2013, paragraph 9).

As can be seen from the SWOT analysis (see Appendix One), external communications at Southwest are also very much a priority. The formation of the “Social Cares” team actively monitors social media for expressions of frustration from clients, and proactively contacts said passengers and, in real-time collaboration with the various operations teams, attempts to mitigate a solution. This suggests a very effective internal communications system.

Communication with external audiences are not limited to the solving of customer problems, however; Southwest’s flight staff are rigorously trained to seek out moments in which they can bring their passengers pleasure, such as observing that a family on board is celebrating a birthday or other special event (Hickins, 2015). Flight staff are trained to observe such moments, and also to showcase these events on social media, ostensibly to delight the customer, but presumably also to keep Southwest’s reputation and a “fun and friendly” carrier front and center (Hickins, 2015)

These communication processes clearly represent a feedback loop that is quite open: there are multiple inputs of information to Southwest (including social media externally and flight and ground staff internally), and the output of information in the form of proactive interaction with clients is just as prolific.

That Southwest’s leadership routinely uses an open feedback loop to inform market decisions (thereby perpetuating a culture of gathering external inputs) is also significant: Gary Keller upheld Southwest’s half-century-old strengths of point-to-point flight routes and lack of aircraft differentiation for years…until the threats brought about by the industry’s mergers (inputs to the open feedback loop) closed both the profit margins and competitive differentiation gap to the point where Keller spearheaded a more traditional hub-and-spoke policy (Nicas, 2014). Keller used the loop as an adaptive mechanism to inform the expansion in response to the market threats, and as a maintenance mechanism to bolster Southwest’s wavering profit margins (Almaney, 1974).

There are, however, some concerns regarding Southwest’s communications approach. As Southwest targets the business traveler, the airline leaves itself open to considerable criticism by said business traveler as Southwest still has not deployed traditional business perks, such as the aforementioned lounges, reserved seating and seat class advantages (though in an attempt to mitigate this challenge, Southwest does offer its “Business Select” customers early boarding (News, 2014)). The business traveler may well take to Southwest’s relatively open communications protocol to disparage the airline on their social media presence, which may well inhibit Southwest’s growth in this market by turning prospective business travelers away from Southwest.

Interestingly enough, when perusing Southwest’s media statements and press releases, it is notable that the language used in these statements do not reflect the “fun and friendly,” caring attitude that customers have come to expect from Southwest. In a recent press release, Southwest says, “Effective January 15, 2018, Southwest will no longer accept smart bags with non-removable lithium batteries. If checking a smart bag is required at any time for any reason, the customer will need to remove the battery” (Southwest Airlines, 2017). This language reflects the “impersonal voice,” which is best suited for the explanation of business ideas and plans (though it should be noted that even with business ideas and plans, the impersonal voice approach may directly contradict the open, friendly, personable environment Southwest strives to project). Whereas baggage policies may fall into this category, perhaps a better approach would have been to have used the “we voice” to reinforce Southwest’s attitude of a friendly family and to include both the airline and its passengers in shared interests and the solving of a shared problem. Since Southwest’s exemplary customer service is its main differentiating factor with regard to its competition, it is conceivable that its messaging tone will affect its growth adversely while it is beset with the aforementioned threats.

 

 

Leadership Communication Guidelines

Southwest relies heavily on its reputation for transparency and “friendliness” to both maintain high levels of employee satisfaction and retention as retain its loyal customer base (Gallo, 2014). In that light, it is interesting that Southwest’s leadership communications are prolific, but directed mainly toward internal stakeholders (e.g., employees). Internal leadership communications take the form of accolades and appreciation (including appreciation dinners and videotaped messages from the C-Suite); not much information is publicly available on negative leadership communications for the internal audience.

External leadership communications are both positive and negative. There is ample information on Southwest’s client-facing initiatives available publicly. When there is negative information to convey that is likely to be covered extensively by media outlets, such as an aircraft accident, Southwest favors a proactive approach. For example, when an accident occurred at LaGuardia airport in 2013, rather than wait for speculation to erupt and comments to be sought, Southwest’s public relations teams speedily sent out press releases and social media posts with statements from the leadership. The leadership did not hide behind the public relations team, but appeared instead to actively engage the airline’s audience before they were coerced to do so (Frischling, 2013).

It appears that the same level of action is not considered for information that affects consumers directly but not necessarily the public as a whole, for example, changes in baggage policies. Such items are deployed via short, somewhat terse media releases, which can easily be found on the Southwest website (Southwest Airlines, 2017).

The Needs of Internal Stakeholders

While it is commendable that Southwest’s leadership takes a proactive and prolific approach to positive employee communications, the leadership may consider involving themselves more with negative communications that affect their employees as well.

As there is very little official information publicly available regarding operational leadership communications with internal stakeholders, deductions regarding the general work culture and opinions on leadership communications are largely anecdotal and drawn from a perusal of multiple pages of number of Glassdoor company reviews by current and former Southwest employees (Glassdoor).

Leadership critiques include lack of communication with the general staff (e.g., frontline staff), lack of empathy with frontline staff, and alleged discrimination in the work environment. It is notable that while information regarding leadership communications describe video messages from leadership, very few of them seem to describe actual, in-person communication with the leadership.

As a key principle of effective teams is to meet, in person and often (Cardon, 2018), and since Southwest prides itself on a less hierarchical work environment (Makovsky, 2013), this disparity would appear to hamper effective communication as well as the effectiveness of the general staff as a whole. In addition to appreciation dinners and video messages from the CEO, the CEO should also consider proactively discussing, either in newsletter form or in informal discussions, the challenges that Southwest faces that may affect employee considerations, such as the advent into the business travel market (retraining may be required for business perks or for multi-level seating aircraft).

When public crises occur, the Public Relations Vice President should consider crafting press releases for internal audiences as well as external audiences: since Southwest is primarily client-facing, not only would this tactic apprise employees of the situation and lend them confidence that Southwest is proactively responding, but this would also give them the tools with which to deal with the public more effectively.

In addition, informal discussion sessions and internal social media tools may be used to help the C-suite become more familiar with the frustrations faced by the general staff.

The Needs of External Stakeholders

Southwest Airlines is actively targeting the business traveler. To that end, leadership needs to communicate how Southwest plans to overcome the systemic obstacles to the business travel niche in Southwest’s current business model.

Currently the largest weakness in said business model is the lack of differentiation in aircraft seating class and the various (traditional) perks and amenities that go along with this differentiation. Southwest wants to target the business traveler, yet has hitherto built its brand on a philosophy of egalitarianism (perceived or otherwise) and homogeneity within its aircraft. Since Southwest relies on a single type of aircraft, which allows only one class of seating, it is currently not attractive to the business travel niche (News, 2014). As a result, since Southwest has thus far not been involved in business travel, the airline is likely not on the business traveler’s radar at all; any communication targeting this market needs to attract the target’s attention.

Southwest’s current, established market comprises mainly family travelers: these, along with any business travelers, need to be kept updated on any issues that may affect their travel plans, including delays, cancellations, route deviations, fare sales, destinations, new policies, etc.

The business travel niche is a lucrative market—the business traveler can usually afford the normal perks and inconsistencies of business travel. Lower fares are not the primary method of attracting this niche: specific features, such as pre-boarding for business class fares, are more effective, and need to be extended.

Southwest should consider additional methods of deploying real-time issues such as flight delays and operations disruptions. As the majority of Southwest’s clientele are on social media, a viable option is to have a “status update” page on various social media platforms for (at least) major hubs, reporting in real time the issues and resolutions affecting that particular hub. Southwest may want to use a social experiment to test the status update page (for example, to ensure that it is easily accessible and decipherable on a variety of mobile devices): drawing on the personal connections they make with passengers, one idea is to cull out specific travelers on various flights and invite them to participate in testing this new feature, offering additional benefits (such as offering the testers advanced boarding or a discount on a future flight) to the test group. Business travelers could be offered perks of value to them, such as pre-boarding and vouchers for premium airport Wi-Fi and/or beverages at restaurants close to the gate to compensate for the lack premium lounges.

Audience Challenges

The AIM (audience analysis, information gathering, message development) planning process will be helpful in crafting communications. Audience analysis must be a key component of Southwest’s communication approach. Not having targeted the business traveler, Southwest’s offerings lack features that business travelers value and pay for, such as class differentiation, lounges (with superior Wi-Fi, business centers, comfortable seating, complimentary food and beverage), and seat pre-selection. Southwest’s messaging priorities need to include promotion of features geared toward business travel that do not depend on a change of aircraft or using more resources at airports.

Additionally, Southwest has no credibility in this particular market as their business model, as mentioned previously, targets families (with the lures of free checked baggage, client-selected seating on board, and the “friendly” reputation) and not the business traveler. In order to establish some credibility, Southwest’s leadership needs to draw on themselves as an example of a business traveler to perpetuate the gathering of information and use their own experiences to identify the best method of gathering information from the audience. Southwest has far-flung operations; one can assume that the leadership and upper management travel frequently on business. Not only can upper management serve in the audience analysis, but they can also target the business market segment with communication surrounding the challenged they as business travelers face (demonstrating an understanding of others’ needs and promoting a sense of solidarity and therefore community, and also presenting a view of open and honest communication), and how they are committed to using their own experience to shape Southwest’s business travel offering (Cardon, 2018).

Specifically, the leadership should seek acknowledge and show concern for the business traveler’s needs, and also to use a positive, confident, “can-do” tone in the messaging, to assure the business traveler that the leadership is serious about serving their needs (Cardon, 2018).

Southwest should leverage all possible channels of social media and customer contact. While Southwest has a solid presence on all the popular platforms, it does not always react on every platform, to its detriment: as recently as the 2016 technological glitch that wreaked havoc on their passengers over four days, Southwest met 322 “angry comments” with no response (Baer, 2016).

Ethical issues

In 2008, an FAA inspector “blew the whistle” on Southwest’s lack of compliance with FAA maintenance protocols. Furthermore, the inspector alleged that the FAA cooperated with Southwest’s request to have him removed from the inspection process (Griffin & Bronstein, 2008).

More troubling was Southwest’s leadership’s response: rather than the proactive approach we have observed in recent crises, the leadership quickly fell behind the shield of the investigation testimony, refusing to comment on the FAA inspector’s allegations. The only comment made public was from the FAA acting administrator, Robert Sturgell, who said, “We had a breakdown in the system with Southwest Airlines. It was a two-way breakdown.”

This complete lack of word regarding the case signals a breakdown of ethical communications at Southwest. Rather than take responsibility for the problem and issuing a statement to preserve Southwest’s reputation, the leadership instead damaged their reputation more by negating their own image of honesty and transparency.

A better approach to the handling of the ethical crisis may have included the following:

• A proactive—and speedy—press release with statements from multiple members of the C-suite to acknowledge the allegations (without necessarily confirming their legitimacy) and to announce the House panel investigation openly.
• A statement of commitment to fixing whatever issues the panel investigation reveals (again without mentioning specifics or admitting guilt at this juncture).
• An offer to make public the results of the panel investigation and Southwest’s plans to address the results.
• The use of Southwest’s already established and prodigious social media presence across multiple channels to distribute the press releases and statements in order to make the leadership’s communications accessible to as much of Southwest’s audience as possible to demonstrate that the leadership themselves are accountable to their customers, and care enough about them so as to be honest and transparent in the face of problems.

Best Practices for Developing and Delivering Communications

The primary responsibility for crafting both internal and external communications should rest with the marketing and the public relations teams at Southwest. As Southwest is so heavily invested in the satisfaction (at least outwardly) and morale of their employees, internal communications deserve as much attention, effort and concern as do external communications.

Southwest already employs, for the most part, a proactive approach toward communicating negative news to external stakeholders, thereby ably controlling the narrative before being assailed by the media. Southwest should continue this practice, but also consider extending it to minor points of negative news that may directly affect the business traveler in an attempt to show understanding and concern, and to invite feedback from the business traveler as to how they are being affected, and what changes should be considered.

The public relations team should have access to and monitor the public social media accounts of all of the C-suite and upper management, and also any other prominent internal stakeholder. This will ensure that the PR team will be notified of complaints and/or derogatory information as soon as possible, and can move to mitigate or solve problems as close to their surfacing as possible. Not only will this assure clientele—and the public at large—that Southwest truly cares about them and their concerns, but it will also allow Southwest to continue to control their own narrative and minimize damage to their reputation. A secondary benefit, though no less important, is that were any public leadership figure at Southwest make a mistake in judgment and post unacceptable (by Southwest’s standards) activity on social media, the PR team can move quickly to mitigate the fallout.

As mentioned before. Southwest takes a less customer-centric tone when it comes to displaying certain other types of negative information, such as adverse changes to baggage policies, and it seems that the sole method of communication for these items are short, brief media statements on the company website. It would perhaps be a better, less adversarial approach to apply the lessons taken from the PR team: when such policy changes are enacted, external audiences may react more favorably were they to be approached on social media before the change takes place, and a more personal tone used. If such policies help drive profits up, this should be addressed up front, to again allow Southwest to control the narrative; it is conceivable that as Southwest leans heavily on low fares, policies that increase profits may be cast as a possible way to further enhance customer fares, or even to amplify customer benefits.

By the same token, Southwest should provide training and encourage employees to make wider use of the internal social media tools, such as discussion forums, available to them (Cardon, 2018). In the aforementioned Glassdoor reviews (Glassdoor), lack of management empathy was a common complaint, and internal social media tools can help connect the general staff more closely with management, and allow a bi-directional feedback tool.

Southwest has a Social Cares team that interacts with their customers in real time on social media, and also monitors Southwest’s social media presences to uncover customer complaints and frustrations in order to proactively liaise with the customer and operations teams to solve problems as they arise (Kerley, 2017). The PR team should offer ongoing training to the Social Cares team to apprise them of new social media and communications technology as well as to deploy deeper training in conflict management and resolution, brand guidelines and other PR principles.

Both the PR and marketing teams should collaborate to codify a statement of brand guidelines and best practices as they relate to communications, and ongoing training should be offered to all employees. Southwest’s reputation—its brand—is its most valuable asset, followed closely by its employees; since employees are encouraged to post customer appreciation and celebration moments on social media (Hickins, 2015), it is imperative that such encouragement be accompanied by ongoing training as to social media best practices.

Southwest’s leadership has a critical role to play in implementing these best practices. Taking a top-down approach, i.e., by allowing their public profiles to be monitored and moderated, the leadership would signal an open, responsive and responsible company culture with respect to both internal and external stakeholders. The leadership should also be seen taking part in the various trainings provided by the marketing and PR teams, and should also openly discuss past fallout resulting from crises brought about by unethical practices. This could be a component of a larger system of periodic informal discussion sessions (one company uses “coffee chats with the CEO” in this manner) in which employees are free to discuss topics that will provide feedback from and insight to the workplace for the C-suite.

Social and Cultural Impact of Guideline Changes

Southwest already appears to have a relatively open system of communication within the company; these guidelines will enhance the openness and address some of the anecdotal concerns observed, and add a component of corporate responsibility. Specifically, the training suggested should provide employees with a better grasp of how best to use social media tools without potentially harming Southwest’s reputation or brand, and hopefully provide more opportunities to engage with customers to solidify Southwest’s reputation as an airline that cares deeply about its clientele.

The greater use of internal social media tools should serve to address a popular employee complaint (Glassdoor), that management lacks toward the general staff and their concerns. If true, then this signals a major opportunity for Southwest’s leadership to connect with and show concerns for their employees, hitherto missed. The use of internal social media tools effectively and consistently (Cardon, 2018) will result in a bi-directional feedback loop and will promote greater employee satisfaction as a result.

The policies that hold the leadership team accountable for their messaging and actions should signal a larger cultural shift toward increased credibility, transparency and honesty (Cardon, 2018).

Systems Theory Observations

An airline company, by its very definition, must necessarily employ an open system of communication, as there is interaction between many subsystems. For example:

• An airline is dependent on its varied customers to turn a profit.
• An airline’s customers react to an airline’s operations (fares, destination, etc.)
• An airline is affected by governmental and regulatory policies and restrictions.
• A large part of an airline’s workforce is client-facing (ground staff as well as airplane staff).

As a result, the openness of Southwest’s communication systems must be better entrenched and further enhanced to allow each subsystem greater access to the others. More effective and consistent use of internal social media tools would result in greater feedback between management and employees.

Prolific use of social media (with the appropriate training) would ensure multiple feedback inputs (e.g., customer complaints) and outputs (e.g., various social media channels both internally and externally), resulting in an adaptive mechanism that enables Southwest to expose and react to potential threats to the stability of its environment faster than they otherwise would have been able to, an industry advantage. As the “efficiency of the adaptive mechanism depends largely on the efficiency of the communication system” (Almaney, 1974), proper training in the use of communications is essential.

Southwest’s brand and reputation act as its maintenance mechanism (Almaney, 1974) toward providing a service and profiting thereof. Therefore, it is crucial that threats to the brand be mitigated, in this case by the monitoring and moderating of the management public social media accounts.

 

 

Appendix One: Southwest Airlines SWOT Analysis

Strengths

Large Client Base.

Loyalty Program. Southwest Airlines’ loyalty program is exceptionally strong, winning the Freddie Award for the Program of the Year earlier this year (Southwest Airlines, 2017).

Ticketing fees and costs. Their low-price ticketing strategy also supports client volume (Investopedia, 2015), as does their reputation for being the only airline carrier in the U.S. that does not charge ticket change fees nor checked luggage fees (Tully, 2015) for up to two pieces of checked luggage (Southwest Airlines). The checked luggage policy is particularly attractive to the family travel segment, which is likely to be the most apt to require checked luggage.

Communications strategy. The large client base is further supported by Southwest’s communications model, a “Social Care Team,” a team specifically in place to monitor and respond to clients’ social media activity around travel experiences in real time (Kerley, 2017).

Superior Employee Satisfaction. There is ample anecdotal evidence supporting the existence of a satisfied staff with relatively high morale. Specifically, more than half of the first four pages of employee reviews on Glassdoor had “Approves of CEO” selected, with only two reviews including “Disapproves of CEO.” The two dissenting reviews had both “Recommends” and “Positive Outlook” selected, suggesting high employee morale and general satisfaction with the company.

Point-to-Point Service Model. Unlike traditional air carriers, which employ a hub-and-spoke approach to flight routes, Southwest instead focuses primarily on a point-to-point service model for direct short-haul flights (Investopedia, 2015). As a result, Southwest is less affected by factors affecting major airports such as inclement weather or airport-operations-level issues (such as power outages or labor strikes), which for traditional carriers, mean subsequent delays along flight routes (Investopedia, 2015).

Single Aircraft Type. Southwest uses only a single type of plane in two editions: the Boeing 737-700 and the 737-800. This strategy realizes cost savings in training (pilot and maintenance personnel), which are then passed onto the customer.

Weaknesses

Lack of airport facilities for business segment. Southwest has hitherto focused only on direct, short-haul leisure flight routes, and not the business segment. Therefore, the amenities that the business traveler prizes, such as lounges, first class, and reserved seating, are conspicuously absent from Southwest’s service offerings.

Opportunities

            Prospective market segment: long-haul business travel. Long-haul business travel is currently the domain of the large, traditional carriers who do offer lounges, various classes of seating and the ability to reserve seating to draw business travelers. With the 2011 purchase of AirTran, Southwest was able to leverage the former’s Atlanta hub and offer numerous non-stop flights to Los Angeles, Houston and Denver and compete directly with Delta for its business travel market share (Tully, 2015).

Prospective market segment: international travel. The purchase of AirTran referenced above also provided Southwest entry into Latin America, a market in which there is not very much competition thus far. United Airlines is Southwest’s only significant competitor in this market, and plans to challenge United with the launch of a new international terminal at Hobby Airport are underway. Gary Kelly, Southwest’s CEO, plans to discount Latin American fares by 40% to attract customers in this market (Tully, 2015).

Threats

Bankruptcy, consolidation, and mergers among larger, more traditional carriers. The consolidations and bankruptcies that swept through the airline industry in the last decade have resulted in large mergers, bringing significant economies of scale and higher capacities to the survivors. As a result, the larger (traditional) carriers are able to now compete effectively with Southwest’s low fares (as the competition over Hawaii as a very popular leisure destination shows (Shine, 2017)), the quality of customer service notwithstanding. As Southwest’s key draw is its low fares, the airline faces a major threat in this arena.

Single Aircraft Type. Southwest’s policy of using a single aircraft type, while a significant strength that supports financial gains, also threatens their entry to the business traveler market. The current aircraft type is made up of homogenous seating: there are no distinguishable seating classes. As the business traveler generally pays extra for more comfortable seating (especially on long-haul flights) and the premium service that accompanies the class, the use of a single aircraft type is a significant threat and barrier to Southwest’s entry into this market.

 

References

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Bronstein, D. G. (2008, April 3). FAA inspectors: Southwest tried to hide safety problems. Retrieved from CNN: http://www.cnn.com/2008/US/04/02/southwest.faa.inspection/index.html

Cardon, P. (2018). Business Communication: Developing Leaders for a Networked World. McGraw Hill Education.

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Gallo, C. (2014, January 21). Southwest Airlines Motivates Its Employees With A Purpose Bigger Than A Paycheck. Retrieved December 3, 2017, from Forbes: https://www.forbes.com/sites/carminegallo/2014/01/21/southwest-airlines-motivates-its-employees-with-a-purpose-bigger-than-a-paycheck/#1d03572b5376

Glassdoor. (n.d.). Southwest Airlines Reviews. Retrieved from Glassdoor.com: https://www.glassdoor.com/Reviews/Southwest-Airlines-Reviews-E611_P1.htm

Hickins, M. (2015, September 21). Southwest Airlines Adds Social To Its Customer Engagement Strategy. Retrieved from Forbes: https://www.forbes.com/sites/oracle/2015/09/21/southwest-airlines-adds-social-to-its-customer-engagement-strategy/#780810af58ae

Investopedia. (2015, July 22). Southwest Airlines’ Business Model Could Soon Be the Industry Standard. Retrieved from Investopedia: https://www.investopedia.com/articles/markets/072215/southwest-airlines-business-model-could-soon-be-industry-standard.asp

Kerley, D. (2017, November 21). Inside the hub where Southwest responds to passengers’ complaints. Retrieved December 3, 2017, from Yahoo! News: https://www.yahoo.com/gma/inside-hub-where-southwest-responds-104857511.html

Makovsky, K. (2013, November 21). Behind The Southwest Airlines Culture. Retrieved from Forbes: https://www.forbes.com/sites/kenmakovsky/2013/11/21/behind-the-southwest-airlines-culture/#36fed1813798

News, A. (2014, April 22). Southwest Airlines Opens for Business – Customers. Retrieved from Forbes: https://www.forbes.com/sites/airchive/2014/04/22/southwest-airlines-opens-for-business-customers/#212b5a91329b

Southwest Airlines. (2017, December 15). Media Statement: Smart Bags. Retrieved from Southwest Media: https://www.swamedia.com/releases/release-69aa80e248cb7cd6a4c3b48eaa341032-media-statement-smart-bags

Southwest Airlines. (2017, April 28). Southwest Airlines’ Rapid Rewards Program Sweeps the 29th Annual Freddie Awards. Retrieved from PR Newswire: https://www.prnewswire.com/news-releases/southwest-airlines-rapid-rewards-program-sweeps-the-29th-annual-freddie-awards-300447970.html