Southwest Airlines didn’t describe seat class and its operation will lead ticket approximately less that reduces cost, sales function cost and back-office accounting cost. Southwest Airlines didn’t provide meals, movies and transfer baggage service to other airlines. Southwest Airlines focus human behavior, cost saving for extra job and created new idea against formal industry culture. There was saving food order cost and reducing baggage handlers cost. Southwest Airlines has employee productivity and an employee-to –passenger ratio of 1:2400, the best in the industry in 2008.
Southwest Airlines Company has excellent HR strategy for employment, incentive plan and profit-sharing plan. Southwest Airlines chose new employee hiring selection with positive attitude, willingness and teamwork mindset who can be able to work with team or groups. Southwest Airlines hires only 3 percent of those interviewed in a year. Southwest creates incentives program for its employees to work hard and profit-sharing plan which of the employee can invest 25% of profit share in Company stock.
This program will change the employees’ mindset, increase their productivity, maintain employee retention, employee motivation, increase individual moral and create ownership culture. All employees are willing to do hardworking, accept their mindset that money makes aircraft would be fly in the air. Pilots and flight attendants did their job description with positive mindset and then willing to helped other functional job not related to their assigned job such as cleaning the aircraft and helping check in passengers at the gate because of their mindset have been recorded why should they do and how to improve their company profit.
They believed that they are ownership position and they act business owner. All employees had team spirit and they can able to do cooperation with each other so motivation forces are very higher that lead to optimize productivity. They can also work flexible. Southwest Airlines made saving more employee cost to do so many functions and new employment cost because of a few employee made everything and substitution for necessary works.
Southwest Airlines had got competitive advantage more than other airlines. Southwest flies point-to-point strategy that why there is no need for dozens of gates and thousands of employees to handle banks of flights that come in and then distribute within a two-hour window. So, the company can operate with far fewer employees than other airlines that fly through hubs.
Southwest Airlines Company use low fair and low cost strategy and differentiation rate of cost will be 30% lower than other major competitors. The company had got competitive advantage and belong superior profitability even in bad years in 2002. The company didn’t fly through hubs, only select point-to-point flying strategy but files often through smaller airports. There are able to make capture enough demand to keep its planes full. Planes arrived on schedule 80% of the time in the first eight months of 2008.
The company’ strategy and route are leading to save delay time for customers. Southwest flies only one type of planes, the Boeing 737 and doesn’t provide seal assignment and mention class. The company doesn’t serve foods, meal and support entertainment such as movies in flight on the way of trip. Airline will not transfer baggage to other airlines. Southwest airlines got employee productivity that can be measure the ratio of employees to passengers carried. The best recorded of employees-to-passenger ratio is 1 to 2400 in the airline industry. The company hires only 3% of those interviewed in a year and focus teamwork & a positive attitude for hiring employees. HR policies are good and realistic.
Southwest airlines uses stakeholder-orientation strategies and applies employee’ productivity with positive motivation. The company has incentive plan and profit sharing plan such as all employees are entitled to get 25% of company share and they have to be invested in Company. Pilots and Flight attendants would like to clean the aircraft and help check in passengers at the gate. They can make not only their assigned job but also other functional job such as cleaning, helping check in customers and other activities.
Other employees of Southwest Airlines are also flexible and motivated workforce leads to higher productivity. Fist, the company made market research and analyze customer’ problem how to solve customer’ problem with empathy. Second, the company found out unnecessary cost and working procedure. Third, the company set up HR policy and rules to build team split with qualify employees. Fourth, the company made employment and hiring employees who are willing to work hard & good positive attitude.
Fifth, the company made marketing strategic decision and thinking new created idea against traditional way. Sixth, the company only use the Boeing 737 airplanes to reduce training cost, various inventory cost and flight reservation cost. Seventh, the company made new idea creation and strategy for HR, Marketing, Cost Saving method, Resource allocation and problem solving. Southwest Airlines has higher performance well trained employees and built working enjoyable environment with employees who have positive attitude. Southwest flies only Boeing 737 air plane type.
Southern Airlines made set up HR policies and Strategy for employment & incentive profit-sharing plan. 1 Employee of Southwest Airlines can be carried 2400 passengers and so Southwest Airlines had got the best employee-to-passenger ratio in Airlines industry. Pilots and flight attendants have been known to help clean the aircraft and check in passengers at the gate. They don’t take too much waiting time for departure because an aircraft doesn’t make money while it is on the airport.
They would like to take off as quick as possible because of they thought that they are doing their own business. All employees are doing flexibility and higher productivity. Southwest Airlines decided to fly point to point and not to through hubs. Southwest Airlines is also focus pricing barrier and provide low cost rate to save customer’ expense. Other airlines can not compete human resource ability because of employees are higher productivity and individual moral are very higher for company. Management of Southwest Airlines are able to make right decision and has good plan how to solve passenger’ problem? Distinctive competencies of Southwest Airlines are low cost, various cost saving, competitive advantage, people, HR policy, meet customer’s expectation and innovation.
