The business model of South West Airlines is extremely unique and cost effective. The business model is based on a business operation that is significantly streamlined. This streamlined operation is the main USP of the company. This operation technique has slowly become a very significant part of the organization. This streamlined operation it has integrated extremely well with the entire structure of the company. The airline’s operation techniques define the corporate philosophy of the airlines. It would be extremely difficult for other airlines to copy this business model
Southwest is a low-cost airline that focuses on fast, no-frills service. It has never served meals, does not have advanced seat reservations, and flies only Boeing airplanes. These decisions have helped Southwest be flexible in the face of the recent decreases in airplane passengers caused by the 9/11 terrorist attacks and the world economic crisis. Southwest is one of those airlines who are consistently earning profits despite the problems the industry is facing. With such stability, the corporation is able to make decisions and adjust policies, which other heavily burdened airlines may not be able to imitate. Southwest’s business model is based on streamlining its operations, which results in low fares and satisfied consumer. Following are the steps taken by Southwest to save money and pass to customers through low fares;
* flies over 3100 short and point to point trips in a day,
* fast turn around service
* unique boarding pass
* operate Boeing 737 for all its flight which simplifies the training proces for employees and save time and manpower,
* program to hedge fuel prices by purchasing options years in advance long term contract
* lighter planes as lighter planes use less fuel.
Southwest Airlines is also well-known for having a very productive and loyal workforce. Such loyalty and productivity among the employees were brought by the way Southwest’s management treats them. Southwest is a people-oriented company and uses that orientation to leverage its advantages. It cuts costs by having employees who work for a company they love, instead of for a simple paycheck at the end of the week. The company also plans for the future and is not afraid to take the risks necessary to stay ahead of the competition.