Case Study
Presented by
Araro Jireh
Ary Andana
Bambang Wijarnako
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The Content
Southwest Airlines at a Glance
What makes SWA Different?
Case Analysis
Recommendation
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MMUGM - JAKARTA
Southwest Airlines at a Glance
 1967: Herb Kelleher and Rollin King founded
Southwest Airlines
 June 18,1971: 1st fly in Texas-Houston, Dallas,
San Antonio (“Golden Triangle) with 3 Boeing
737s aircrafts and 25 employees
 In 2004, 417 Boeing 737 Jets provide services
to 60 airports in 31 states throughout The
USA
 The nations’ low-fare, high customer
satisfaction airline
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Southwest Airlines at a Glance
 Lowest operating cost structure in the
domestic airline industry
 Offered the lowest and simplest fare
 31,000 employees (2004)
 Total operating revenue US$ 6.5 billion (2004)
 Passenger load factor 69.5% (2004)
 The most admired airline in the world
(Fortune Magazine, 2005), for the 9th in a
row
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Southwest Airlines at a Glance
 Number 5th America’s top ten admired
corporation
 100 Best Corporate Citizen (Business Ethics
Magazine, 2002-2005)
 Leading the industry in customer satisfaction
(American Customer Satisfaction Index (ACSI),
2005)
 Best customer service, best bonus promotion,
best award redemption (Insight Flyer
Magazine, 2004)
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MMUGM - JAKARTA
What makes SWA Different?
 Short haul, medium haul, and point to point
 No assigned seats
 Paid the crew by the trip
 Use less congested airport
 60 % revenues generated by online booking
 Consistently sought out ways to improve its
efficiencies and pass on the cost saving to its
passenger
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What makes SWA Different?
 Reduce the head count per aircraft to 74 from 85
(2003-2004)
 Save $455 million from the hedged of 85% fuel
and oil
 Southwest pilot not belong to national union
 81 % of total workforces are ununionization
(2005)
 Flexible contract
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What makes SWA Different?
 Turn around time 20 -25 minutes
 Four ground crews plus two at gate
 Reinforce the company culture (Hard-work,
High Energy, Local Autonomy, and Creativity)
through training at University of People,
encouragement of inflight contest and
recognition of personal initiatives.
 Unique hiring process
 Implement profit sharing plan for employee
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MMUGM - JAKARTA
Southwest Airlines Strategy
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The Generic Strategy – Michael Porter
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Framework for Strategy Implementation
Implementation Mechanism
Management
Control
Strategy
Human
Resources
Management
Organization
Structure
CULTURE
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Performance
Culture
 Clear required Work Ethics ((Hard Work, High
Energy, Fun, Local Autonomy and Creativity)
 Constantly Reinforce Culture to the employee
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Human Resources Development
 Pays for Performance
 Effective Type of Contract
 Employee Involved Hiring Process
 Profit Sharing System (ESOP – Employee Stock
Ownership Plan)
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Organization Structure
 Effective Functional Structure
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The Conclusion
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MMUGM - JAKARTA
The Recommendation
Ensure the understanding of Company
Culture and identify employee needs
through Employee Survey
/questionnaire.
Set the rule and regulation of
recruitment to avoid the violation of
business conduct.
Set the rule and regulation of couple
within the organization to avoid conflict
of interest.
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Thank You
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