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Southwest airlines
- 1. LUV is in the air. LUV is in the air.
- 2. SOUTHWEST AIRLINES Established in 1971 Less Money, More Personality
- 3. Known for: Low fares, Frequent flights, On time arrivals, Top safety record, Free baggage
- 4. Warm, Peppy Advertising “This is what our meals look like at Southwest Airlines. It’s also what our fares look like.”
- 6. The Flying Killer Whale
- 7. The Slam Dunk One
- 8. They can bring down fares down by one-third to one-half whenever they enter a new market.
- 9. But How?!
- 10. Streamlining Takes several steps to save money
- 11. •Point to Point flights •Fast turnaround service, more flights •Unique boarding process •Mostly operates in secondary cities with small airports •Uniformity in flights, Boeing 737s only The Steps
- 12. But the most important one, Fuel Hedging Purchasing options years in advance. Saving billions of dollars.
- 13. The Small Things: Reduce weight of the plane, Save fuel. Lighter seat models Daily cleaning of the jet Hold less water
- 14. LUV – The Pioneer Same day freight service, Senior Discounts, Ticketless travel Website, Blog
- 15. Employee and Customer Friendly The LUVing Spirit – ‘caring about themselves, each other and Southwest’s customers. Sense of humour is a job requirement!
- 16. And as a result, Most admired US airline Profits for 37 straight years No layoffs after 9/11
- 17. Importance of the questions This presentation is based on the Case Study on Southwest Airlines in “Marketing Management” by Philip Kotler and Kevin Keller. Relevant questions after the case study Brainstorming will help understand other businesses and find out ways for growth.
- 18. Q1. Southwest has mastered the low-price model and has the financial results to prove it. Why don’t the other airlines copy Southwest’s model? •Fuel Hedging is not that easy now. •Other airlines started big. Southwest started small and scaled up intelligently. •Turnaround times cannot be reduced by other airlines •Southwest prefers culture over numbers. Employee & Customer Satisfaction. Not so easy to replicate
- 19. Q2. What risks does Southwest face? Can it continue to thrive as a low cost airline when tough economic times hit? •New entrants •Savings from fuel hedging won’t last longer due to fuel price hike •Turnaround times can increase if expanded to bigger airports •Expected change from Boeing 737 for expanding Southwest can continue like this only if they find new ways to save money other than fuel hedging and point to point flights. They have to maintain their customer and employee satisfaction because it is Southwest’s spirit that others can’t replicate
- 20. Low fares Unconventional Advertising Transfer of company savings to low fares Consumer friendly staff with a sense of humour The Spirit of LUVing Summary
- 21. Disclaimer Created by, Jayanth Narayan, BITS Hyderabad, during a marketing internship under Prof. Sameer Mathur, IIM Lucknow