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How Southwest Is Winning (Time Article)  
User currently offlineLoneStarMike From United States of America, joined Jul 2000, 3811 posts, RR: 34
Posted (11 years 9 months 6 days 15 hours ago) and read 2587 times:

From Time Magazine:

One Airline's Magic
How does Southwest soar above its money-losing rivals? Its employees work harder and smarter, in return for job security and a share of the profits
10/29/2002

http://www.time.com/time/magazine/article/0,9171,1101021028-366310,00.html

Most of the articles I've ever read about Southwest Airlines talk about how they keep things simple (like flying only one type of aircraft), but the articles never seem to mention that doesn't have 25 different fares in a city-pair. By having only 9 or 10 different fares in a particular market, I think the reservationists are able to handle more calls per agent that the other airlines with their fancy yield management systems.

LoneStarMike

28 replies: All unread, showing first 25:
 
User currently offlineCapt.Picard From , joined Dec 1969, posts, RR:
Reply 1, posted (11 years 9 months 6 days 15 hours ago) and read 2559 times:

God I love low-cost airlines. Thanks to SW, the European low-cost airline scene is alive and kicking.

Speaking of which, Ryanair are offering free flights again....for the THIRD time in as many weeks.....incredible how they do this. You bet I'm a satified customer!

Rock on Southwest!


User currently offlineMcdougald From , joined Dec 1969, posts, RR:
Reply 2, posted (11 years 9 months 6 days 15 hours ago) and read 2534 times:

Part of their success is their understanding of what motivates people.

They call themselves a 'no-frills' airline, but they're legendary for offering customers the most effective frill of all: friendly employees, who themselves feel appreciated for the work they do.

Sometimes it's amazing what both customers and employees will do just because someone was nice to them or made them feel appreciated.



User currently offlineKUGN From United States of America, joined Jul 2000, 615 posts, RR: 6
Reply 3, posted (11 years 9 months 6 days 15 hours ago) and read 2495 times:

There is very peculiar paragraph that I would like to repeat to everyone. Its very telling, about the company, union, employees and more:


When the union that represents Southwest's pilots told members to reject the company's contract offer, Southwest pilots rebelled. "The industry — and the economy — is going to hell, and I'm supposed to vote against?" scoffed veteran pilot Tracy Price. "The union was out of touch. I took the raise." Two-thirds of the pilots voted in September to accept management's offer. They voted the union leadership out of office last week, in large part because of its unrealistic stance on wages.


User currently offlineArtsyman From United States of America, joined Feb 2001, 4745 posts, RR: 34
Reply 4, posted (11 years 9 months 6 days 14 hours ago) and read 2452 times:

There has been a lot of anti-union comments recently coming from the airlines, from congress and also from employees and analysts too. When United gave the huge raises, it made all the unions hungrier and all of them started demanding industry leading contracts etc. This is the main reason why the airlines are burning cash, as the wages have no grasp on reality at all.

Put it this way, a Continental FA with 15 years seniority flying international is getting 70k a year with 21 days off per month. This is at Continental who everyone says gets paid way less than United, American and Delta etc.

as a side note, Southwest told the analysts this week that they are not sure if they can remain profitable in the 4th quarter, thus breaking their record of successive profitable quarters. I hope they manage

Jeremy


User currently offlineGoingboeing From United States of America, joined Dec 1999, 4875 posts, RR: 17
Reply 5, posted (11 years 9 months 6 days 14 hours ago) and read 2440 times:

as a side note, Southwest told the analysts this week that they are not sure if they can remain profitable in the 4th quarter, thus breaking their record of successive profitable quarters. I hope they manage

They've had losing quarters a few times in the past. I just hope they keep their string of profitable YEARS intact.


User currently offlineSleekjet From United States of America, joined Jul 2001, 2046 posts, RR: 22
Reply 6, posted (11 years 9 months 6 days 13 hours ago) and read 2414 times:

Just think how much more successful Southwest would be if they painted over the awful tan and red planes. (Note to WN: The blue is very attractive...keep using it)


II Cor. 4:17-18
User currently offlineBlatantEcho From United States of America, joined Sep 2000, 1903 posts, RR: 1
Reply 7, posted (11 years 9 months 6 days 11 hours ago) and read 2327 times:

wonderful article for a well deserving airline.

The managment - employee relationship is what it should be everywhere



They're not handing trophies out today
User currently offlineBarney captain From United States of America, joined Nov 2001, 924 posts, RR: 13
Reply 8, posted (11 years 9 months 6 days 8 hours ago) and read 2273 times:

While I certainly appreciate and echo the praise of the SWA management, I completely disagree with Capt. Price and his comments. Our union leaders did a fantastic job in trying to secure mid-contract enhancements to a 10 year contract that had fallen horribly behind the times. The reason our union leaders advised against the contract was very simple and IMO right on target; our contract was not due expire for 2 MORE YEARS! The logic that "well, it's a good deal considering the times" is ridiculous when you consider that we didn't even need to be negotiating. Why sell your home in the middle of a buyers market when you don't plan on selling in the first place? Our union was quite clear, "now is not the time to be talking, let's wait until the amendable date of our contract in 04', when the airline and the economy lend itself to more equitable results". I love working for SWA, the most profitable airline in the WORLD (Air Transport World 5/02), but Capt. Price's comments do not echo those of myself or my peers.


...from the Banana Republic....
User currently offlineRayChuang From United States of America, joined Jun 2000, 7985 posts, RR: 5
Reply 9, posted (11 years 9 months 6 days 7 hours ago) and read 2250 times:

Despite what people say about WN, you have to admit they have pretty much defined the concept of a low-cost airline since the early 1980's.

Especially here in California--WN single-handedly saved the concept of low-cost flying on intra-California flights. WN's US$65 unlimited fare for intra-California flights in 1986 took away a huge amount of business from the majors literally overnight. That's why WN is the largest tenant at SMF, OAK, SNA, ONT and SAN, and are huge tenants at SJC and LAX.


User currently offlinePhxinterrupted From United States of America, joined Apr 2002, 474 posts, RR: 0
Reply 10, posted (11 years 9 months 6 days 6 hours ago) and read 2209 times:

American unions are doing to the airline industry what they did to the Big 3 auto industry in the 80s!




Keepin' it real.
User currently offlineHmflyer From United States of America, joined Jul 2001, 83 posts, RR: 0
Reply 11, posted (11 years 9 months 5 days 19 hours ago) and read 2130 times:

There is no doubt that Southwest is a great airline. All my friends there love it.

I must say that a lot of anti-union sentiment arises from inaccuracies from the media and others. Usually these inaccuracies come from people who know little about airline jobs.

For example, in the article about Southwest, the author twice points out that United pilots fly 53 hours in an average month. This is very inaccurate. In a busy month a pilot on reserve may fly 53 hours, but a lineholder would fly substantially more than that. I doubt that the article's author knows the difference between lineholder and reserve.

Another example is when Artsyman states that a 15 year CO flight attendant makes 70K a year with 21 days off a month. Possible but highly unlikely. To make that much with so many days off, they would have to work NRT or HKG every time they work, few have the seniority to do that. F/As at CO can potentially make really good many because their hours are not capped, but they would fly a lot for it. Someone reading Artsyman's comments would think that is norm when it is far from it.


User currently offlineJjbiv From United States of America, joined Jan 2001, 1226 posts, RR: 5
Reply 12, posted (11 years 9 months 5 days 19 hours ago) and read 2121 times:

This industry still has the best part time jobs around...let's hope we can keep it that way!

joe


User currently offline727LOVER From United States of America, joined Oct 2001, 6380 posts, RR: 17
Reply 13, posted (11 years 9 months 5 days 18 hours ago) and read 2115 times:

This is bullsh*t!! Why does Southwest get all the publicity??? What about Airtran, Jetblue, Frontier, Spirit, ATA. They're all profitable too. Southwest has more in commom with them than AA,UA,DL,US,NW,CO


Listen Betty, don't start up with your 'White Zone' s*** again.
User currently offlineFATFlyer From United States of America, joined May 2001, 5790 posts, RR: 15
Reply 14, posted (11 years 9 months 5 days 18 hours ago) and read 2098 times:

Until this article appeared I was beginning to wonder why JetBlue was getting all the publicity.  Wink/being sarcastic 60 Minutes 2, newspaper articles etc. I thought the media had a new darling in JB.


"Travel is fatal to prejudice, bigotry, and narrow-mindedness." - Mark Twain
User currently offlineGoingboeing From United States of America, joined Dec 1999, 4875 posts, RR: 17
Reply 15, posted (11 years 9 months 5 days 18 hours ago) and read 2101 times:

Perhaps Southwest gets the publicity because they are the fourth largest airline in the US. I believe the gist of the article was that the first, second, third, fifth and sixth largest airlnes aren't making a profit. Southwest is.

User currently offlineLoneStarMike From United States of America, joined Jul 2000, 3811 posts, RR: 34
Reply 16, posted (11 years 9 months 5 days 13 hours ago) and read 2030 times:

Why does Southwest get all the publicity? I think this excerpt from an article in Money Magazine sums it up best:

MONEY Magazine recently asked Ned Davis Research to compile a list of the 30 best-performing stocks since the magazine's debut in 1972. Southwest Airlines came out on top as the No. 1 performer. Since August 1972, Southwest has produced annualized returns of 25.99 percent, which means that had you invested $10,000 in our Company 30 years ago, your stake would be worth a little over $10.2 million today. "When you think about it, it is absolutely remarkable that Southwest could come out No. 1 despite being in probably the worst industry in America," says Jeremy Siegal, Wharton finance professor and author of "Stocks for the Long Run." "What it tells me–and what it should tell your readers–is just how valuable a good CEO with good strategies can be."

LoneStarMike

User currently offlineArtsyman From United States of America, joined Feb 2001, 4745 posts, RR: 34
Reply 17, posted (11 years 9 months 5 days 13 hours ago) and read 2025 times:

This is bullsh*t!! Why does Southwest get all the publicity??? What about Airtran, Jetblue, Frontier, Spirit, ATA. They're all profitable too. Southwest has more in commom with them than AA,UA,DL,US,NW,CO

Well the thing with Jetblue is that despite the fact that they are running a great airline, they are too new and too small to be considered relevent yet. CO / DELTA / AMERICAN / UNITED / NW etc could all just own 20 planes of one type and only fly the routes that are full all the time and then declare a profit. The point is that the major carriers are major because they cover the country, and the skill is to try and fly as many places as possible and still maintain profitability.

If Jetblue expands significantly, then they will discover this too, they will also eventually have Unions wrestling control of their workers with "Industry leading contracts", I can see the Pilots etc saying "We are the only airline making any money, we deserve to be the best paid".

Southwest has been active for a long time, profitable for a long time and have a fairly extensive network and many planes. Jetblue have a very basic network and not many planes. This is why they are not considered part of the big picture ...yet

Jeremy


User currently offlineDouglasDC8 From Australia, joined Dec 2007, 0 posts, RR: 0
Reply 18, posted (11 years 9 months 5 days 3 hours ago) and read 1956 times:

Phxinterrupted, you posted "American unions are doing to the airline industry what they did to the Big 3 auto industry in the 80s!" Well my friend, I hate to tell you that Southwest is a heavily unionized airline. All of their ground personnel and flight crews are union members. The unions are not killing the industry.

So does Southwest do it? In addition to what the article said, they contract out their heavy maintenance. For example, their JT8-D's, which power the 737-200's, are overhauled in Brazil. That's how you cut costs and make profits. Take jobs away from Americans and ship them overseas. I'm really confident that the FAA is able to control the GE/Celma plant near Rio. (and if you believe that one...)


User currently offlineCPH-R From Denmark, joined May 2001, 5977 posts, RR: 3
Reply 19, posted (11 years 9 months 5 days 1 hour ago) and read 1942 times:

DouglasDC8

I suggest that you read the first comment by KUGN. It pretty much sums up what I think some of WN's staff thinks about the union  Smile/happy/getting dizzy


User currently offlineBWIrwy4 From United States of America, joined Nov 2001, 940 posts, RR: 1
Reply 20, posted (11 years 9 months 5 days 1 hour ago) and read 1938 times:

DouglasDC8

That same airline that contracts out their JT8-D maintenance is the one that has never had a fatal accident in 30 years of flying, much less one caused by a mechanical problem. So before you post connotations of shoddy maintenance based on the fact that it's done overseas, please look at the statistics. I'm sure the maintenance done in Brazil is every bit as high quality as that done in the US.

BTW, do you also believe that Embraer builds a lower quality plane than Boeing?


User currently offlineDouglasDC8 From Australia, joined Dec 2007, 0 posts, RR: 0
Reply 21, posted (11 years 9 months 5 days 1 hour ago) and read 1938 times:

CPH-R,
Some of Southwest's pilot's may not support their union, that is true. However if a majority of them did not support their union, that union would have been decertified as the bargaining agent for the pilots. It's that simple.

BWIrwy4,
Engine shutdowns do not result in crashes.That is due to the excellent design of modern airliners and the high skill levels of those that operate them. I am not saying that the Brazilians can not maintain (or build) airliners. But I do know that the FAA has historically not been able to police U.S. air carriers much less U.S. repair shops (ie:Sabretech). They certainly do not have the resources to police overseas repair stations.


User currently offlineCerulean From , joined Dec 1969, posts, RR:
Reply 22, posted (11 years 9 months 4 days 17 hours ago) and read 1882 times:

To my knowledge, Southwest has had only one year where they posted a loss:

1987

And that was only because of the "Flying Purple Profit Eater", a.k.a. TranStar (formerly Muse Air) Airlines that Southwest bought to preserve its home turf against the advances of Continental.

I believe that all 29 other years, Southwest posted a profit.

Also, isn't ironic that Southwest is not only one of the most heavily Unionized airline in the country, but also one of the best to work for?

Perhaps the Majors should take note:

How you treat your employees makes a big difference. In other words, don't micromanage.


You all know Richard Branson, right?

He has been quoted as saying your priorities should be as follows:

1. Your employees
2. Your customers
3. Your shareholders

Now most US airlines would shudder at that and feel that just the opposite (shareholders, then customers, then employees) should be true.

To paraphrase a quote from Mr Branson:

First and foremost in your airline is your employees. Make sure they enjoy their jobs. Spend more energy rewarding positive behavior as opposed to looking for negatives. If your employees enjoy their jobs, then the customers will enjoy it being done to them. This will ensure their repeat business, which in turn will take care of your shareholders interests.


User currently offlineMcdougald From , joined Dec 1969, posts, RR:
Reply 23, posted (11 years 9 months 4 days 14 hours ago) and read 1849 times:

"If your employees enjoy their jobs, then the customers will enjoy it being done to them."

That's a good point. Morale problems lead to customer service problems. Customer service problems eventually lead to profitability problems.

It's vital to ensure that the path of least resistance for the employee is to keep the customer happy. If there's a mismatch, it's going to cause problems for employees, customers and shareholders.


User currently offline737doctor From United States of America, joined Mar 2001, 1332 posts, RR: 39
Reply 24, posted (11 years 9 months 4 days 14 hours ago) and read 1846 times:

To my knowledge, Southwest has had only one year where they posted a loss:

1987


Well, you're mistaken. Since 1973, we have posted a profit every year, although there have been some unprofitable quarters. In 1987, our net income was $20,155,000.



Patrick Bateman is my hero.
25 Cerulean : 737Doctor: You posted a profit even after that whole Muse Air/TranStar fiasco? How did you pull that off? I thought the reason that WN shut MC down wa
26 Marcus : Ah yes! those damn Brazilians what do they know about building airliners, quality control, technology.............opposable thumbs!!!! They are just t
27 ThirtyEcho : Why can't the majors see the obvious? WN has great employee morale and that leads to great customer service, period. Don't for one second discount the
28 Post contains links LoneStarMike : You posted a profit even after that whole Muse Air/TranStar fiasco?Although I'm not 737doctor and cannot elaborate on how they did it, they did indeed
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