LoneStarMike
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How Southwest Is Winning (Time Article)

Wed Oct 23, 2002 1:50 am

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

 
Guest

RE: How Southwest Is Winning (Time Article)

Wed Oct 23, 2002 2:02 am

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!
 
Guest

RE: How Southwest Is Winning (Time Article)

Wed Oct 23, 2002 2:12 am

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.

 
KUGN
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RE: How Southwest Is Winning (Time Article)

Wed Oct 23, 2002 2:34 am

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.
 
artsyman
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RE: How Southwest Is Winning (Time Article)

Wed Oct 23, 2002 3:29 am

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
 
goingboeing
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RE: How Southwest Is Winning (Time Article)

Wed Oct 23, 2002 3:34 am

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.
 
sleekjet
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RE: How Southwest Is Winning (Time Article)

Wed Oct 23, 2002 3:47 am

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
 
BlatantEcho
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RE: How Southwest Is Winning (Time Article)

Wed Oct 23, 2002 6:15 am

wonderful article for a well deserving airline.

The managment - employee relationship is what it should be everywhere
They're not handing trophies out today
 
barney captain
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RE: How Southwest Is Winning (Time Article)

Wed Oct 23, 2002 9:29 am

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.
Southeast Of Disorder
 
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RayChuang
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RE: How Southwest Is Winning (Time Article)

Wed Oct 23, 2002 10:08 am

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.
 
PHXinterrupted
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RE: How Southwest Is Winning (Time Article)

Wed Oct 23, 2002 11:01 am

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

Keepin' it real.
 
hmflyer
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RE: How Southwest Is Winning (Time Article)

Wed Oct 23, 2002 9:50 pm

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.
 
jjbiv
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RE: How Southwest Is Winning (Time Article)

Wed Oct 23, 2002 10:29 pm

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

joe
 
727LOVER
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RE: How Southwest Is Winning (Time Article)

Wed Oct 23, 2002 10:40 pm

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
I feel woozy....what did you put in that Pudding Pop?
 
FATFlyer
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RE: How Southwest Is Winning (Time Article)

Wed Oct 23, 2002 11:01 pm

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
 
goingboeing
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RE: How Southwest Is Winning (Time Article)

Wed Oct 23, 2002 11:03 pm

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.
 
LoneStarMike
Topic Author
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RE: How Southwest Is Winning (Time Article)

Thu Oct 24, 2002 4:09 am

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

 
artsyman
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RE: How Southwest Is Winning (Time Article)

Thu Oct 24, 2002 4:28 am

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
 
DouglasDC8
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RE: How Southwest Is Winning (Time Article)

Thu Oct 24, 2002 2:15 pm

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...)
 
CPH-R
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RE: How Southwest Is Winning (Time Article)

Thu Oct 24, 2002 3:54 pm

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
 
BWIrwy4
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RE: How Southwest Is Winning (Time Article)

Thu Oct 24, 2002 4:08 pm

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?
 
DouglasDC8
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RE: How Southwest Is Winning (Time Article)

Thu Oct 24, 2002 4:33 pm

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.
 
Guest

RE: How Southwest Is Winning (Time Article)

Fri Oct 25, 2002 12:33 am

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.
 
Guest

RE: How Southwest Is Winning (Time Article)

Fri Oct 25, 2002 2:56 am

"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.
 
737doctor
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RE: How Southwest Is Winning (Time Article)

Fri Oct 25, 2002 3:00 am

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.
 
Guest

RE: How Southwest Is Winning (Time Article)

Fri Oct 25, 2002 3:48 am

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 was because of MC's losses.

Please alaborate. I'd like some more information on that whole escapade.

Regards

-Cerulean
 
Marcus
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RE: How Southwest Is Winning (Time Article)

Fri Oct 25, 2002 3:53 am

Ah yes! those damn Brazilians what do they know about building airliners, quality control, technology.............opposable thumbs!!!!

They are just the world's 10th (or 9th. or 11th. depending on the year) biggest economy.........they achieved that only by stealing US jobs.

Yeah right!
Kids!....we are going to the happiest place on earth...TIJUANA! signed: Krusty the Clown
 
ThirtyEcho
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RE: How Southwest Is Winning (Time Article)

Fri Oct 25, 2002 4:15 am

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 effect that a frequently-expressed sense of humor has on employees and passengers; Southwest has that field all to itself. The majors are a pack of sour drips in comparison.
 
LoneStarMike
Topic Author
Posts: 2802
Joined: Sat Jul 01, 2000 1:02 pm

RE: How Southwest Is Winning (Time Article)

Fri Oct 25, 2002 4:16 am

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 do it. Please note the following press release from January 17, 2002:

Southwest Airlines Reports Fourth Qarter Earnings and 29th Consecutive Year of Profitability
01/17/2002

Read Press Release

The key phrase is 29th Consecutive Year. Had they shown a loss for calendar year 1987, the press release would have referred to their 14th consecutive year of profitablility.

My guess is that they did lose money during one or two quarters of 1987, but the profits made in the other quarters of 1987 made up for the loss and they ended up on the positive side for 1987.

LoneStarMike

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