|Founded||1971 (as Air Southwest)|
|Frequent flyer program||Rapid Rewards|
|Company slogan||"A Symbol of Freedom" - "Grab Your Bag. It's On"-"You are Now Free to Move About the Country"|
|Parent company||Publicly owned (NYSE: LUV)|
|Headquarters||Dallas, Texas, United States|
|Key people||Gary C. Kelly (Chairman, CEO and President)
Herb Kelleher (Co-Founder)
Laura Wright (CFO)
Colleen Barrett (Ex-President)
|Revenue||▲ US$11.0 Billion (FY 2008)|
|Operating income||▲ US$475 Million (FY 2008)|
|Net income||▲ US$178 Million (FY 2008)|
|Total assets||▼ US$14.3 Billion (FY 2008)|
|Total equity||▼ US$4.95 Billion (FY 2008)|
Southwest Airlines Co. (NYSE: LUV) is an American low-cost airline. Southwest is the largest airline in the world by number of passengers carried per year (as of 2009). Southwest maintains the third-largest passenger fleet of aircraft among all of the world's commercial airlines. As of May 3, 2009, Southwest operates approximately 3,510 flights daily. Southwest has its headquarters on the grounds of Love Field in Dallas, Texas.
Southwest Airlines has carried more customers than any other U.S. airline since August 2006 for combined domestic and international passengers according to the U.S. Department of Transportation's Bureau of Transportation Statistics. Southwest Airlines is one of the world’s most profitable airlines, posting a profit for the 37th consecutive year in January 2010.
Southwest's successful business model involves flying multiple short, quick trips into the secondary (more efficient and less costly) airports of major markets, and using only one aircraft type, the Boeing 737.
The success and profitability of Southwest's business model led to a common trend being named after the company, the Southwest Effect. Since Southwest's original mission in Texas was to make it less expensive than driving between two points (in the early 1970s, during the first major energy cost crisis in the U.S.), it developed a template for entering markets at rates that allowed the airline to be profitable, yet only on the basis of lean operations and high aircraft use. The key concept to the Southwest Effect is that when a low-fare carrier (or any aggressive and innovative company) enters a market, the market itself changes, and usually grows dramatically. For example, when fares drop by 15% from their historical averages, the number of new customers in that market may not just double, but actually quadruple, or more.
Southwest has been a major inspiration to other low-cost airlines, and its business model has been repeated many times around the world. Europe's EasyJet and Ryanair are two of the best known airlines to follow Southwest's business strategy in that continent (though EasyJet operates two different aircraft models today). Other airlines with a business model based on Southwest's system include Canada's WestJet, Malaysia's AirAsia (the first and biggest LCC in Asia), Sir Richard Branson's and Australia's Virgin Blue (although Virgin Blue now operates two aircraft types), Qantas's Jetstar (although Jetstar now operates three aircraft types), Thailand's Nok Air, New Zealand's Freedom Air, Mexico's Volaris and Turkey's Pegasus Airlines. Although Southwest has been a major inspiration to many other airlines including Ryanair, AirAsia and Jetstar, the management strategies, for example, of Ryanair, AirAsia and Jetstar differ significantly from those of Southwest.
Southwest Airlines was originally incorporated to serve three cities in Texas as Air Southwest on March 15, 1967, by Rollin King and Herb Kelleher. According to frequently-cited story, King described the concept to Kelleher over dinner by drawing on a paper napkin a triangle symbolizing the routes (Dallas, Houston, San Antonio).The original aircraft proposed for the service was the Lockheed Electra turboprop.
Some of the incumbent airlines of the time (Braniff, Aloha Airlines, United Airlines, Trans-Texas, and Continental Airlines) initiated legal action, and thus began a three-year legal battle to keep Air Southwest on the ground. Air Southwest eventually prevailed in the Texas Supreme Court, which ultimately upheld Air Southwest’s right to fly in Texas. The decision became final on December 7, 1970, when the U.S. Supreme Court declined to review the case without comment.
The story of Southwest’s legal fight was turned into a children’s book, Gumwrappers and Goggles by Winifred Barnum in 1983. In the story, TJ Love, a small jet, is taken to court by two larger jets to keep him from their hangar, and then to try and stop him from flying at all. Taken to court, TJ Love’s right to fly is upheld after an impassioned plea from The Lawyer. While no company names are mentioned in the book, TJ Love’s colors are those of Southwest Airlines, and the two other jets are colored in Braniff and Continental’s colors. The Lawyer is designed to resemble Herb Kelleher. The book was adapted into a stage musical, Show Your Spirit, sponsored by Southwest Airlines, and played only in towns serviced by the airline.
Southwest Airlines founder Herb Kelleher studied California-based Pacific Southwest Airlines extensively and used many of the airline’s ideas to form the corporate culture at Southwest, and even on early flights used the same "Long Legs And Short Nights" theme for stewardesses on board typical Southwest Airlines flights. The original flight attendants that worked for Southwest Airlines were chosen by a committee of individuals that included the same person who had selected hostess for Hugh Hefner’s Playboy jet. The selection resulted in a group of female flight attendants that were described as long-legged dancers, majorettes, and cheerleaders with "unique personalities". Southwest Airlines and Herb Kelleher proceeded to dress these individuals in hot pants and go-go boots.
The airline adopted the first profit-sharing plan in the U.S. airline industry in 1971. Through this plan and others, employees own about 10 percent of the company stock.
The airline is about 87 percent unionized. The pilots are represented by the Southwest Airlines Pilots’ Association, a union separate from the much larger Air Line Pilots Association.
In early 1971, Air Southwest changed its name to Southwest Airlines, and the first flight was on June 18, 1971. Its first flights were from Love Field in Dallas to Houston and San Antonio, short hops with no-frills service and a simple fare structure, features that became the basis for Southwest’s popularity and rapid growth in the coming years.
The start of service in June 1971 was accomplished with three 737-200 aircraft; a fourth was added in September of the same year.
Over time, Southwest has added improved 737 variants but has stayed within the Boeing 737 family to hold down operating costs. Because this technique simplified training, maintenance, and ground operations, it revolutionized the industry’s approach to building aircraft fleets.
In January 2005, Southwest retired its last 737-200, the oldest type in its fleet. To celebrate "putting the -200s to bed", selected employees donned Southwest pajamas for an early morning flight to celebrate the final landing at Dallas Love.
The rest of 1971 and 1972 saw operating losses. One of the four aircraft was sold to Frontier Airlines and the proceeds used to make payroll and cover other expenses. Southwest continued to operate a schedule predicated on four aircraft but using only three, and in so doing the "ten minute turn" was born, and was the standard ground time for many years.
Southwest has used financial techniques such as fuel hedging to bolster its profitability and counteract many of the fiscal disadvantages of operating an airline.
In 1975 Southwest was headquartered at the 1820 Regal Row building in Dallas, by Love Field.
By 1979, Southwest flew to all of the cities they currently serve in Texas, including El Paso, Amarillo, Beaumont, Corpus Christi, Harlingen, Lubbock, and Midland/Odessa. Interstate service began to New Orleans in 1979, and Albuquerque in 1980. Oklahoma City and Tulsa were added shortly thereafter. In 1981 Southwest co-launched the 737-300 with USAir. In 1982, the first expansion beyond the Texas area took Southwest to the West Coast, adding Phoenix, Las Vegas and San Diego. In late 1984, the 737-300 was placed into service. Chicago Midway and St. Louis service began in March 1985, spreading to Midwest markets.
After the opening of Dallas-Fort Worth Regional Airport, which was the original name of Dallas-Fort Worth International Airport in 1974, Southwest was the only airline to remain at Love Field.
When airline deregulation came in 1978, Southwest began planning to offer interstate service from Love Field. This caused a number of interest groups affiliated with Dallas-Ft. Worth Airport, including the city of Fort Worth, to push the Wright Amendment through Congress to restrict such flights. Under the restrictions of the amendment, Southwest, and all other airlines, were barred from operating, or even ticketing passengers on flights from Love Field to destinations beyond the states immediately surrounding Texas. In effect, to travel through Love Field, a passenger and luggage would have to deplane and fly on a separate ticket, on a separate aircraft.
The Wright Amendment’s restrictions did not apply to aircraft configured with 56 or fewer seats. In 2000, Legend Airlines attempted to operate long distance business-class flights using older DC-9s with 56 seats, but did not have the resources to survive American’s legal and marketing attacks, and quickly ceased operations. Southwest did not use the 56 seat loophole, even with its market strength at Love Field and the availability of more modern regional jets such as the CRJ-700/900 and the Embraer ERJ 145 family.
Southwest’s efforts to repeal or even alter the Wright Amendment were met with opposition from American Airlines and Dallas Ft. Worth International Airport. Both American Airlines and DFW contended that repeal of the Wright Amendment restrictions would cripple DFW, while Southwest contended that repeal of the Wright Amendment would be beneficial to both Love Field and DFW. Continental Airlines has a successful hub and spoke operation at Houston Bush Intercontinental Airport despite unrestricted competition from Southwest at Houston Hobby Airport.
In 1990 the airline registered its aircraft in Houston so it could pay aircraft taxes in Houston, even though the actual corporate headquarters were in Dallas. Southwest was not physically relocating any assets, but Texas state law allowed the airline to choose either Dallas or Houston as the city of registry of its aircraft.
In 1997, Southwest’s efforts began to pay off with the Shelby Amendment, which added the states of Alabama, Mississippi, and Kansas to the list of permissible destination states. Southwest began offering non-stop service between Dallas Love Field and Birmingham, Alabama, which it could not do prior to the enactment of the Shelby Amendment.
In late 2004, Southwest began actively seeking the full repeal of the Wright Amendment restrictions. In late 2005, Missouri was added to the list of permissible destination states via a transportation appropriations bill. New service from Love Field to St. Louis and Kansas City quickly started in December 2005.
At a June 15, 2006 joint press conference held by the city of Dallas, the city of Ft. Worth, Dallas-Ft. Worth Airport, American Airlines, and Southwest Airlines, the said parties announced a tentative agreement on how the Wright Amendment was to be phased out. Both the U.S. Senate and House of Representatives passed Wright-related legislation on September 29, 2006, and it was signed into law by President George W. Bush on October 13, 2006. The new law became effective on October 16, 2006, when the FAA Administrator notified Congress that any new aviation operations occurring as a result of the new law could be accommodated without adverse effect to the airspace.
Southwest started selling tickets under the new law on October 19, 2006. Highlights of the agreement are the immediate elimination of through-ticketing prohibitions, and unrestricted flights to domestic destinations eight years after the legislation takes effect. Because of the agreement, nationwide service became possible for Southwest; the law also defined the maximum number of gates at Love Field. Southwest controls all of the Love Field gates except for four gates controlled by American Airlines, Continental Airlines, and Delta Air Lines. The future of the Legend Airlines terminal for use by commercial airlines is in doubt because of the limit on number of gates.
Southwest remains the dominant passenger airline at Love Field, maintains its headquarters, hangars, training centers, and flight simulators adjacent thereto, and reflects its ties to Love Field in its ticker symbol (LUV).
One airline influenced by Southwest was Morris Air, founded in 1984 by June Morris and David Neeleman, based in Utah and operating in the northwestern U.S. Southwest Airlines purchased Morris Air and absorbed the capital and routes into its inventory and service. David Neeleman worked with Southwest for a short period. When his non-compete agreement expired, Neeleman founded JetBlue Airways, a competing airline that also incorporates (and in some ways, improves upon) many principles and practices pioneered by Southwest, including building a positive, warm employee culture and operating a simple fleet.
Southwest Airlines has mostly pursued a strategy of internal growth, rather than by acquisition of other airlines as commonly occurs. However, in addition to acquisition of Morris Air Transport (see above), Southwest did acquire competitor Muse Air in 1985, which operated McDonnell Douglas MD-80s. Muse Air was renamed TranStar Airlines. TranStar Airlines was then closed in August 1987.
Towards the end of November 2008, Southwest announced it was buying the operating certificate and the remaining assets of ATA Airlines. This acquisition transferred to Southwest Airlines ownership of New York LaGuardia slots formerly controlled by ATA. The transaction did not include any aircraft, facilities or employees of ATA.
On July 30, 2009, Southwest Airlines publicly announced a $113.6 million bid for Frontier Airlines Holdings, the parent company of Frontier Airlines. Southwest's plan was to initially operate Frontier as a stand-alone carrier, but eventually absorb the airline. Frontier's aircraft would also be replaced with Boeing 737s that Southwest had long operated as its aircraft type.
On August 14, news reports announced that Southwest had lost its bid to Republic Airways Holdings. Industry experts had expected Southwest to win, which would have grown its presence in Denver and allowed it to explore international routes. However, Southwest said a key reason its bid wasn't chosen was because it chose not to remove a requirement calling for pilot unions at its company and Frontier to reach an agreement.
Southwest Airlines earned a reputation for being very aggressive and proactive about containing fuel costs as a key to maintaining profit margins.
In 2000, Southwest said it had "adjusted its hedging strategy" to "utilize financial derivative instruments... when it appears the Company can take advantage of market conditions." Additionally, the company hoped to "take advantage of historically low jet fuel prices." Southwest’s decision proved to be a prescient and, for a time, an extremely profitable effort.
To lock in the low historical prices Southwest believed were occurring at that time, Southwest used a mixture of swaps and call options to secure fuel in future years while paying prices they believed were low. The company also stated that with this new strategy, it faced substantial risks if the oil prices continued to go down. They did not. Previously, Southwest had been more interested in reducing volatility of oil prices. Now, they hoped to reap large gains from oil price appreciation.
In 2001, Southwest again substantially increased its hedging in response to projections of increased crude oil prices. The use of these hedges helped Southwest maintain its profitability during the oil shocks related to the Iraq War and later Hurricane Katrina.
According to an annual report, here is the company’s fuel hedge for forward years ("approximate" per barrel basis, as of mid-January): 2007 is 95% hedged at $50/barrel; 2008 is 65% hedged at $49/barrel; 2009 is over 50% hedged at $51/barrel; 2010 is over 25% hedged at $63/barrel; 2011 is over 15% hedged at $64/barrel; 2012 is 15% hedged at $63/barrel.
According to its 2006 Annual Report, Southwest paid low prices for fuel because of the benefit of fuel hedges:
These are well below market rates, which Southwest factors into its low operating costs. However, this below-market oil cost will not continue forever; executives have said that Southwest faces increased exposure to the raw oil market every year. This is not a good sign for the airline, which is also facing tough competition from US legacy carriers that have lowered costs through bankruptcy. Southwest CEO Gary Kelly has decided to slow the airline’s growth as a response to this cost.
Some analysts have argued against the style of profit-motivated energy trading Southwest did between 1999 and the early 2000s. They suggested that rather than hedging business risk (such as a hedge on weather to a farmer), Southwest was simply speculating on energy prices, without a formal rationale for doing so.
At present, Southwest has enjoyed much positive press (and a strong financial boost) from its energy trading skills. However, while most analysts agree that volatility hedges can be beneficial, speculative hedges are not widely supported as a continuing strategy for profits.
In the third quarter of 2008, Southwest recorded its first loss in 17 years due to its fuel-hedging contracts being of lesser value because of the drop in oil prices.
All of Southwest’s 737-700s have blended winglets. Additionally, Southwest began installing blended winglets on up to 90 of its 737-300 aircraft beginning in mid-January 2007, with AAR of Indianapolis, Indiana, accomplishing the work. The first modified aircraft, N368SW, resumed service on February 22, 2007.
In 2008, Southwest contracted with Pratt and Whitney to supply the proprietary Ecopower water pressure-washing system, which allows Southwest to clean grime and contaminants off engine turbine blades while the aircraft is parked at the gate. Frequent use of the Ecopower system is estimated to improve fuel efficiency by about 1.9%.
On March 16, 1995, Southwest became one of the first airlines to have a web site. Originally called the "Southwest Airlines Home Gate", customers could view schedules, a route map, and company information at http://www.iflyswa.com. The company later obtained the rights to its current home on the web, http://www.southwest.com, from an unaffiliated business. Southwest consistently rejects syndicating its fares to fare search sites such as expedia.com or orbitz.com.
Southwest.com is the number one airline web site for online revenue, according to PhoCusWright. Nielsen/Netratings also reports that Southwest.com is the largest airline site in terms of unique visitors. In 2006, 70 percent of flight bookings and 73 percent of revenue was generated from bookings on southwest.com. As of June 2007, 69 percent of Southwest passengers checked in for their flights online or at a kiosk.
On March 6, 2008, Federal Aviation Administration (FAA) inspectors submitted documents to the United States Congress, alleging that Southwest allowed 117 of its aircraft to fly carrying passengers despite the fact that the planes were "not airworthy" according to air safety investigators. In some cases the planes were allowed to fly for up to 30 months after the inspection deadlines had passed, rendering them unfit to fly. Records indicate that thousands of passengers were flown on aircraft deemed unsafe by federal standards. Southwest declined comment at the time, and US Representative James Oberstar advised a hearing would be held.
On March 12, 2008, Southwest Airlines voluntarily grounded 44 planes to check if they needed further inspection. The FAA claimed that Southwest Airlines flew almost 60,000 flights without fuselage inspection. Southwest Airlines faced a $10.2 million fine if they violated FAA regulations. There have also been rumors that the FAA knew about Southwest Airlines violations but decided not to fine the airline because it would disrupt the service of Southwest.
On March 2, 2009, Southwest settled these claims, agreeing to pay the FAA fines of $7.5 million for these safety and maintenance issues. The original fine of $10.2 million - a sum which would have been the largest fine in the agency’s history - was lowered after a year of negotiations. The FAA gave Southwest two years in which to pay the fine.
On August 26, 2009 the FAA investigated Southwest for installing improper parts on about 10% of its jets. The work was performed by an outside maintenance company. The FAA stated that the parts do not present a safety danger, but the airline was given until December 24, 2009 to replace the parts with those approved by the FAA. The FAA is still determining whether it will fine Southwest or its vendor.
Southwest Airlines is headed by Gary C. Kelly. Kelly has served as the airline's CEO since 2004, replacing James F. Parker, who had been the CEO for the last 3 years. Gary C. Kelly was named chairman on May 21, 2008, replacing previous Southwest Airlines CEO and co-founder Herb Kelleher. Kelly also replaced Colleen Barrett as president of Southwest Airlines when her contract expired on July 15, 2008.
Southwest Airlines is known for its quick turnaround services. In the beginning, Southwest Airlines managed to turn planes around in ten minutes or less. To this day, Southwest Airlines manages one of the best turnaround times in the industry. The average turnaround today for Southwest Airlines is around 20–30 minutes, while more-efficient crews can take the time down to only 15 minutes.
After an initial testing phase that began in February 2009, Southwest announced on August 21, 2009 that it will begin rolling out in-flight wi-fi service throughout its fleet in the first quarter of 2010. Southwest has contracted Row 44 to offer satellite-enabled broadband access on its flights.
As of November 1, 2009, Southwest Airlines operates scheduled service to 68 destinations in 35 states. Southwest also announced that they will begin to serve the new Northwest Florida-Panama City International Airport in Panama City, Florida when it opens in May 2010, bringing the total of cities served by Southwest to 69.
Southwest does not use the more traditional "hub and spoke" flight routing system of most other major airlines, preferring instead the "Point to Point" system. Currently, Southwest serves 68 cities in 35 states, with more than 3,300 flights a day. It has notably large operations in certain airports. Las Vegas (LAS) has non-stop service to all but ten of Southwest's destinations. Other airports with large Southwest operations include Baltimore (BWI), Nashville (BNA), Chicago (MDW), Dallas (DAL), Denver (DEN), Houston (HOU), Los Angeles (LAX), Oakland (OAK), Orlando (MCO), Phoenix (PHX), San Diego (SAN), San Jose (SJC), Sacramento (SMF), Salt Lake City (SLC) and Tampa (TPA). An average of 80 percent of Southwest passengers are local passengers, meaning only 20 percent of all passengers are connecting passengers. This is significantly higher than most airlines, where passengers often connect in hub cities.
As part of its effort to control costs, Southwest tries to use secondary airports which generally have lower costs and may be more convenient to travelers than the major airports to the same destinations. For example, Southwest flies to Chicago Midway Airport (MDW) in Chicago instead of O'Hare International Airport (ORD), Fort Lauderdale-Hollywood International Airport (FLL) and Palm Beach International Airport (PBI) in South Florida instead of Miami International Airport (MIA), Dallas Love Field Airport (DAL) in Dallas, Texas instead of Dallas-Fort Worth International Airport (DFW), New York-La Guardia Airport instead of New York-JFK Airport and Houston Hobby Airport (HOU) in Houston instead of George Bush Intercontinental Airport (IAH).
Southwest makes exceptions to its practice of serving secondary airports by flying into some larger airports in major cities, such as Las Vegas International Airport, Phoenix Sky Harbor International Airport, Lambert St. Louis International Airport, Orlando International Airport, Detroit Metropolitan Wayne County Airport, Philadelphia International, Denver International Airport, Cleveland Hopkins International Airport, Kansas City International Airport, Seattle-Tacoma International and Pittsburgh International. In the Baltimore-Washington market, Southwest has limited flights into one major airport (Washington Dulles International Airport) while maintaining their east-coast focus city at the region's other major airport, Baltimore-Washington International Airport (BWI). In the Los Angeles market Southwest flies to both the major city airport, Los Angeles International (LAX), and to three of the four secondary airports, Burbank-Bob Hope Airport, Santa Ana-John Wayne Airport, and LA/Ontario International Airport. With the restoration of service out of San Francisco International Airport on August 26, 2007, Southwest now serves all three airports in the San Francisco Bay Area; the other two being Oakland International Airport and San Jose International Airport.
In 2005, Southwest withdrew from Houston Intercontinental in favor of using Houston Hobby Airport, a nearby airport with fewer commercial operations. In addition to Bush Intercontinental Airport, the airline has withdrawn service completely from Beaumont, Texas and Detroit City Airport (instead, Southwest operates in nearby Detroit Metropolitan Wayne County Airport).
The airline also once served Stapleton International Airport in Denver but withdrew in 1986 because of excessive ATC delays during poor weather exacerbated by minimal separation between the runways. Southwest returned to Denver in 2006 with service to the new Denver International Airport. Southwest is expanding Denver service faster than any previous Southwest destination at the cost of service to Orlando, Kansas City and Baltimore.
On March 8, 2009, Southwest Airlines began operations at Minneapolis/St. Paul (MSP) with 8 daily flights from the Hubert H. Humphrey Terminal to Chicago Midway International Airport, and added 3 daily flights on the MSP-DEN route on May 26, 2009.
On June 28, 2009, Southwest Airlines started operating five daily round-trip, nonstop flights between New York City LaGuardia Airport and Chicago’s Midway Airport and three daily round-trip, nonstop flights between LaGuardia and Baltimore-Washington International Airport.
On August 16, 2009, Southwest began service from Boston Logan International Airport to Chicago Midway Airport and Baltimore-Washington International Airport.
Southwest is the largest intrastate airline in California, with 694 flights total in the state, 370 of which are intra-California.
|Largest metropolitan areas without Southwest service|
|United States - in order by population size|
|CSA||Atlanta-Sandy Springs-Marietta||Hartsfield-Jackson Atlanta International Airport or PDK||Delta, AirTran|
|CSA||Charlotte-Gastonia-Salisbury||Charlotte/Douglas International Airport||US Airways|
|CSA||Cincinnati-Middletown-Wilmington||Cincinnati/Northern Kentucky International Airport or LUK||Delta|
|CSA||Greensboro-Winston Salem-High Point||Piedmont Triad International Airport or INT|
|CSA||Grand Rapids-Muskegon-Holland||Gerald R. Ford International Airport|
|MSA||Memphis||Memphis International Airport||Delta|
|CSA||Greenville-Spartanburg-Anderson||Greenville-Spartanburg International Airport|
|MSA||Richmond||Richmond International Airport|
|CSA||Rochester-Batavia-Seneca Falls||Greater Rochester International Airport|
|CSA||Dayton-Springfield-Greenville||Dayton International Airport|
|CSA||Fresno-Madera||Fresno Yosemite International Airport|
|MSA||Honolulu||Honolulu International Airport|
|CSA||Knoxville-Sevierville-La Follette||McGhee Tyson Airport|
|CSA||Sarasota-Bradenton-Punta Gorda||Sarasota-Bradenton International Airport|
|MSA||Allentown-Bethlehem-Easton||Lehigh Valley International Airport|
|CSA||Baton Rouge-Pierre Part||Baton Rouge Metropolitan Airport|
|CSA||Columbia-Newberry||Columbia Metropolitan Airport|
|CSA||Syracuse-Auburn||Syracuse Hancock International Airport|
|CSA||Toledo-Fremont||Toledo Express Airport|
|MSA||Charleston-North Charleston-Summerville||Charleston International Airport|
|MSA||Colorado Springs||Colorado Springs Airport|
Due to congestion at certain airports and intense competition from entrenched airlines, some markets are not cost effective for Southwest. According to the airline's Route Map, 15 states are without Southwest service.
While other low cost carriers such as AirTran, Frontier, and JetBlue serve international destinations directly, Southwest serves destinations outside the United States only indirectly through codeshare partners. Southwest has recently begun partnerships with Canadian air carrier WestJet and Mexican air carrier Volaris.
In 2005, Southwest proposed servicing Seattle using Boeing Field, which is smaller but a little closer to downtown than Seattle-Tacoma International Airport. However, King County officials refused to allow a terminal to be built or service to begin. But in February 2007, a land swap was arranged between King County and the Port of Seattle which gave the Port authority of the airport.
In July 2007, CEO Gary Kelly stated that because of shrinking profits, the airline will likely slow its rate of expansion.
As of December 22, 2009
|City||Daily departures||Number of gates||Cities served nonstop||Service began|
During November 2008, Southwest applied to purchase 14 slots (for 7 roundtrips daily) previously used by ATA Airlines at LaGuardia Airport. The bid was approved about a month later, and further progress was made during late March, 2009. In early April, it was announced that the airline will (strategically) have a combined total of 16 daily arrivals and departures (5 and 3 each way with MDW and BWI respectively), despite the receipt of only 14 slots. On June 28, 2009 Southwest successfully started servicing LaGuardia Airport and the airline is confident about future growth at LGA, including expanded service to other locations.;
On February 19, Southwest announced service to Boston's Logan airport, in the Fall of 2009 . Service began August 16, 2009, with five daily roundtrips to both BWI and MDW . Southwest says that it is complementing their service to Manchester, NH and Providence, RI. As reported by the Boston Herald earlier this year, there is a two-gate operation with an additional 2 gates as options at Logan . Southwest is hoping to curve toward business travelers that stay in downtown Boston and bring lower ticket cost and fees to these travelers .
Prior to ATA's shutdown, Southwest Airlines had set a goal to codeshare with ATA and begin international codeshare services or ticket for international flights in 2009. Destinations served by ATA could have included Canada, the Caribbean, Mexico, and Europe. On July 8, 2008, Southwest announced that it has agreed to a comprehensive codeshare agreement with Canada's second largest carrier WestJet, though implementation has been delayed.
Southwest also has announced plans to codeshare with Mexico's Volaris with flights starting in 2010. Plans have yet to be unveiled about which airline will be crossing the border.
Southwest's further plans for codeshares would require negotiation with its Pilot and Flight Attendant work groups due to contractual requirements.
On July 8, 2008, Southwest Airlines officially announced the intent to begin a codeshare agreement with WestJet Airlines of Canada, giving the two airlines the ability to sell seats on each other's flights. Originally, the partnership was to be finalized by late 2009, but has been postponed due to economic conditions.
Southwest announced its second international codeshare agreement on November 10, 2008, with Mexican low cost carrier Volaris. The agreement will allow Southwest to sell tickets on Volaris flights beginning in 2010, including international flights from the United States that the carrier started in early summer, 2009. Volaris began service at Oakland (OAK) and Los Angeles (LAX) both to and from the airline's hub in Toluca and focus city Guadalajara. Service between Oakland and Tijuana was added September 21, with the latter acting as a "funnel" connection to and from several other Mexican locations.
In 1997, Southwest and Icelandair entered into interline and marketing agreements allowing for joint fares, coordinated schedules, and transfer of passenger luggage between the two airlines at Baltimore. Icelandair operated flights between Baltimore and Keflavik Airport in Iceland. Connecting service between several U.S. cities and several European cities appeared in the Southwest timetable The frequent flyer programs were not included in the agreement. This arrangement lasted for several years but is no longer in existence.
ATA Airlines, one of Southwest Airlines' main competitors in the Chicago market, historically operated out of Midway Airport alongside Southwest. ATA declared bankruptcy, and in 2004, Southwest injected capital into ATA that (among other things) would have resulted in Southwest's 27.5% ownership stake in ATA upon their exit from Chapter 11 bankruptcy proceedings.
In a departure from its traditional "go it alone" strategy, Southwest entered into its first domestic codesharing arrangement with ATA, which enabled Southwest Airlines to serve ATA markets in Hawaii, Washington, D.C., and New York City.
In late 2005, ATA secured $100 million in additional financing from the firm of MatlinPatterson, and Southwest's original deal with ATA was modified such that Southwest no longer retained the 27.5% stake (or any other financial interest) in ATA. The codeshare arrangement expanded to include all of ATA's 17 destinations and all of Southwest's 63 destinations. In 2006, Southwest's pilot union approved a codeshare sideletter to their contract with limitations on the growth of this and other codeshare agreements. While these restrictions today are minor, outsourcing remains a growing concern in the union's current contract negotiations.
During 2006, Southwest Airlines began marketing ATA only flights. ATA's dependence on the Southwest network continued to grow in 2006, and at the time of ATA's demise in April 2008, the airline offered over 70 flights a week to Hawaii from Southwest's focus cities in PHX, LAS, LAX, and OAK. Additional connecting service was available to many other cities across the United States. Plans had been announced for ATA to offer exclusive international service for Southwest by 2010, but were scratched when ATA abruptly ended operations on April 3, 2008. There was no plan to open the ATA/Southwest codeshare to ATA's sister carriers, North American Airlines or World Airways, even though they are co-owned by the same corporate entity created from ATA Holdings.
The ATA/Southwest codeshare was terminated when ATA filed for Chapter 11 bankruptcy on April 3, 2008. As of 4:00 A.M. EDT on April 3, ATA discontinued all operations. Towards the end of November 2008, Southwest announced it was buying the operating certificate and the remaining assets of ATA Airlines thus enabling Southwest Airlines access to New York LaGuardia slots formerly controlled by ATA. According to Southwest Airlines "...it doesn't include any aircraft, facilities or employees of ATA."
In 1989, Southwest Airlines and The Mark Travel Corporation entered into an exclusive agreement which gave customers an option to purchase complete vacation packages called Southwest Airlines Vacations. These vacation packages continue to include roundtrip air fare via Southwest Airlines, hotel accommodations, hotel taxes, ground transportation options, Rapid Rewards credit on the air portion and 24-hour traveler assistance. Area attraction passes, travel protection plans and ski lift tickets are also available.
Tickets cannot be purchased through common online venues like Orbitz or Travelocity; a minority are booked through travel agents. Most of Southwest's tickets are issued directly by the airline over the phone or online at the company's website, which features Web-only fare discounts.
Unlike other major airlines, Southwest allows passengers to change reservations without additional cost. While this provides flexibility to customers, Southwest does not allow same-day standby travel on a different flight (usually a free service at other airlines) without upgrading.
Customers are not assigned seats; rather, they are assigned to one of three "boarding groups" depending on their check-in time (earlier check-ins get to board earlier), and are left to choose their own seats on the plane, which helps the airline to board passengers faster. At the May 2006 shareholders meeting, Southwest management announced a study of potentially adopting an assigned-seating system in 2008, as part of a reservations-technology overhaul now under way. As of November 8, 2007 Southwest has implemented an update to their Boarding Procedure in which passengers are now assigned their Boarding letter (A, B or C) along with a number which provides them a specific place in line (Example: A32). The idea behind this is to allow customers to not have to wait in line and spend their time relaxing or catching up on work. They have also introduced Business Select fares, which adds a guaranteed "A" group boarding pass, extra Rapid Rewards credit, and a drink. As a result of the boarding policy, several independent companies offered automatic check-in services for Southwest. These companies took customers' orders for check-in ahead of the 24 hour mark (when the airline makes a flight available for online check-in) and transmitted the necessary data for check-in to Southwest as soon as the airline opens up online check-in for a particular flight. The result of this service was that people using it generally get the first boarding group (known as the "A" boarding group). Southwest has not embraced this practice and in fact sued one company (boardfirst.com) in federal district court in Dallas for impermissible commercial use of its website and succeeded in getting the company shut down in October 2007. As a result of litigation or threats thereof, the last early check-in services indefinitely ceased operations on September 15, 2008.
In September 2009, Southwest adopted a new policy whereby passengers not travelling Business Select (and excluding unaccompanied minors, who board first anyway) may pay an extra $10 and participate in "EarlyBird Check-in". Participants receive their assigned group and number automatically 36 hours in advance, following Business Select and A-list (those who travel 32 paid one-way trips in a 12-month period), with full fare passengers having priority. The airline did not disclose in what order numbers will be assigned among non-full fare participants.
Southwest historically allowed three pieces of luggage to be checked in free as opposed to the limit of two on the domestic flights of some other U.S. airlines. However, on January 29, 2008, only two bags could be checked in for free, with a third bag subject to a $25 fee. A 4th through 9th checked bag has a charge of $50, and any other pieces after that are $110.
Prior to the 2000s, Southwest served smaller meals than the meals served by full service airlines, with shorter flights receiving single small snacks and soft drinks, and longer flights (with a duration of about 3 hours or more) meriting "Snack Pack"s of prepackaged goods. In the 2000s these meals in a bag typically exceed the food served on full-service airlines like United Airlines or American Airlines. Southwest also offers free in-flight beverages (excluding alcohol). There is no in-flight entertainment. Southwest is known for colorful boarding announcements and crews that burst out in song. The singing is unusual, and is quite popular among customers, but has been noted by some travel critics as being offensive and intrusive.
Southwest maintained excellent customer satisfaction ratings; in 2006, according to the Department of Transportation December year end operating statistics, Southwest ranked number one (lowest number of complaints) of all U.S. airlines for customer complaints, with 0.18 per 100,000 customers enplaned. Southwest Airlines has consistently received the fewest ratio of complaints per passengers boarded of all major U.S. carriers that have been reporting statistics to the Department of Transportation (DOT) since September 1987, which is when the DOT began tracking Customer Satisfaction statistics and publishing its Air Travel Consumer Report.
Southwest's frequent flier program is called Rapid Rewards. Customers receive one credit for each one-way trip (even though the flight may have stopovers). A free ticket, expiring after 11 months, is automatically issued when a member accumulates 16 credits in a 24-month period. In addition, one half credit is earned for using a Southwest partner to book any car rental and/or hotel stay, regardless of whether a Southwest flight is involved. Rapid Reward members can also earn one credit for every $1,200 charged to a Rapid Rewards branded Visa credit card (with charges from Southwest or its partners counting double). If members register their credit card with Rapid Rewards Dining, they will receive 0.25 credits for every US$100 spent on restaurant partners. In early 2009, Southwest announced their first retail partner, TeleFlora Flower Club, from which members can earn 0.5 or 1.0 credits with each flower order (depending on the total cost of the order). The Rapid Rewards program has won numerous Freddie Awards over the years.
In the past, Double Rapid Rewards credits were awarded for trips booked online, but this policy was modified at the end of 2003, at which time the bonus was reduced to one half credit for each segment booked online (so a round trip booked online would be eligible for three Rapid Rewards credits). The bonus for online booking was discontinued completely in April 2005.
Prior to February 2006, reward travel was subject to blackout dates but not capacity controls: one could use a reward to travel on any flight for which seats were available, provided it was not on one of the five blackout dates. In February 2006, these policies were reversed: the blackout dates were eliminated, but capacity controls were instituted, limiting the quantity of seats available to those traveling on reward credits.
In early 2006, Southwest expanded its codeshare agreement with ATA Airlines and allowed redemption of award tickets on Hawaii flights at the rate of two awards per round trip flight. On April 3, 2008, ATA airlines ceased all flights due to bankruptcy, including the codeshare service to Hawaii.
The company has employed humor in its advertising. Slogans include "Just Plane Smart", "The Somebody Else Up There Who Loves You" and "THE Low Fare Airline". The airline's current slogan is "It's On.". A select history of print and video ads are available on the company website.
Since the 1990s, Southwest has been running a television ad campaign based on the phrase "Wanna get away?" The commercials present comical, embarrassing situations in which people find themselves wanting to "get away". Most ads are accompanied by the sound clip "[ding] You are now free to move about the country"; self-parody of the in-flight announcement that "you are now free to move about the cabin".
The Southwest Airlines television commercial "Flight Attendant" was named in 'Adweek's ‘Best Spots’ in August 2006.
An ad campaign in late 2009 focuses on the fact that Southwest does not charge for the first two bags checked, contrary to many other airlines.
Shortly after Southwest started using the "Just Plane Smart" motto, Stevens Aviation, who had been using "Plane Smart" for their motto, threatened a trademark lawsuit.
Instead of a lawsuit, the CEOs for both companies staged an arm wrestling match. Held at the now demolished Dallas Sportatorium (the famed wrestling facility) and set for two out of three rounds, the loser of each round was to pay $5,000 to the charity of their choice, with the winner gaining the use of the trademarked phrase. A promotional video was created showing the CEOs "training" for the bout (with CEO Herb Kelleher being helped up during a sit up where a cigarette and glass of whiskey (Wild Turkey 101) was waiting) and distributed among the employees and as a video press release along with the video of the match itself. Herb Kelleher lost the match for Southwest, with Stevens Aviation winning the rights to the phrase. Kurt Herwald, CEO of Stevens Aviation, immediately granted the use of "Just Plane Smart" to Southwest Airlines. The net result was both companies having use of the trademark, $15,000 going to charity and a healthy dose of goodwill publicity for both companies.
The President and CEO of Southwest is Gary C. Kelly, who replaced Colleen Barrett as president on July 15, 2008. Southwest's CFO is Laura Wright. In July 2007, Herb Kelleher resigned his position as Chairman. Colleen Barrett left her post on the Board of Directors and Corporate Secretary in May 2008 and President in July 2008. Both are still active employees of Southwest Airlines.
Concerns attributed to labor unrest and complaints by the Transport Workers Union of America (TWU) representing Southwest flight attendants were reportedly a factor in the resignation of Kelleher's hand-picked replacement as CEO. Jim Parker resigned in July 2004 and was replaced by Chief Financial Officer Gary Kelly.
Although Southwest is considered a "low fare" airline, it is heavily unionized when compared to other airlines. The Southwest Airline Pilots' Association, a union not affiliated with the Air Line Pilots Association, International, represents the airline's pilots. The Aircraft Maintenance Technicians' are represented by the Aircraft Mechanics Fraternal Association (AMFA). Customer Service Agents and Reservation Agents are represented by the International Association of Machinists and Aerospace Workers Union (IAM). Flight Dispatchers, Flight Attendants, Ramp agents and Operations agents are represented by the Transport Workers Union (TWU).
The American version of the reality show Airline showcased Southwest Airlines passengers and employees in daily mishaps and life at some of Southwest's major airports (BWI, MDW, LAX, & HOU). The show premiered January 5, 2004 on the A&E Network, but was canceled after 70 episodes on December 15, 2005.
The Southwest Airlines fleet consists of the following 547 aircraft; as of October 5, 2009, all aircraft currently are variants of the Boeing 737:
|Launch customer||Largest operator||Blended Winglets||Routes|
|Boeing 737-300||180||0||0||0||137||Yes||Yes||90 of 180 are||Short/medium haul|
|Boeing 737-500||25||0||0||0||122||Yes||No||No||Short/medium haul|
|Boeing 737-700||341||98||62||54||137||Yes||Yes||Yes||All routes|
The airline operates more Boeing 737s in its fleet than any other airline in the world; Southwest is often cited as an example of an airline streamlining operations by having only one type of aircraft. However, Southwest operated leased 727-200 aircraft during the late-1970s and again in the mid-1980s and subsidiary TranStar Airlines operated DC-9s and MD-80s during the mid-1980s. Southwest has been a launch customer for all three of the Boeing 737 variants it currently operates, and was the first airline to put both the Model 500 and next-generation Model 700 into service. Southwest has a mix of old and new aircraft with both its "classic" and "next generation" 737 aircraft.
As of August 2009, Southwest has an average fleet age of 14.0 years, and each plane flies an average of about 7 flights per day. The average aircraft trip length is 633 miles (1,019 km) with an average duration of one hour and 48 minutes. This means the daily utilization of each plane is, on average, 12 hours and 36 minutes.
Southwest's seats are the same as any other operator of 737s in the United States. The seat pitch averages between 32 and 33 inches (840 mm), which is longer than the average U.S. domestic airlines of 31 to 32 inches (810 mm). Low-fare carrier JetBlue Airways also offers from 34 inches (860 mm) to 38 inches (970 mm). However, seats are approximately one inch narrower than Airbus A320 series operated by low cost carriers such as Frontier Airlines, JetBlue, Virgin America, USA 3000, and several other competitors.
Southwest's 737-300 and 737-500 aircraft are not equipped with glass cockpit technology, as the 737-300s, 737-400s, and 737-500s of some other airlines are (earlier versions also had non-glass cockpits). Instead, the flight decks are fitted with analog gauges, more akin to those of the earlier 737-100 and 737-200 variants. Note the analog attitude indicator (ADI) and horizontal situation indicator (HSI) (the blue-colored instrument and one below it) in this Southwest 737-3H4 and note the electronic versions of the same instruments (EADI and EHSI) in this United Airlines 737-322. There are electronic displays throughout the cockpit of the 737-700 and other "Next Generation" 737 variants, and Southwest has programmed their 737-7H4 models to emulate the appearance of the 737-300 and 737-500 for standardization purposes. All three versions of the Boeing 737 that Southwest operates use (HUD) Heads Up Display in the flight deck. This technology consists of a glass panel which folds down on the Captain's side, and displays primary flight information as a hologram.
Since production of the 737-300 and 737-500 has ended, recent Southwest orders have been exclusively for the 737-700 model. Southwest began retiring some older 737-300 models, beginning in December 2007, reducing its -300 fleet from its original count of 194. However, newer -300 models are being retrofitted with new electronic flight decks. These retrofits will make them compatible in operation with the -700, and will support the airline's move to embrace the Required Navigation Performance initiative; among other advances, these improvements will give the -300 a glass cockpit and allow navigation via the Global Positioning System. Southwest expects substantial cost savings from this initiative.
Southwest is the world's largest operator of the 737. Their current active fleet consists of over 500 aircraft. In terms of total 737 production (all models in history), deliveries of new aircraft from Boeing to Southwest accounts for approximately 9% of total production. Southwest has one of the largest fleets in North America.
|Boeing 737-200||2005||Boeing 737-700||Southwest's first aircraft type|
|Boeing 727-200||Boeing 737-200||Leased from other companies.|
Southwest's original primary livery was beige and red, with orange on the tail end, and pinstripes of white separating each section of color. The word Southwest appeared in white on the beige portion of the tail. (Although, on the original three 737-200s, from June 1971, on the left side of the plane, the word Southwest was placed along the upper rear portion of the fuselage, with the word Airlines painted on the tail where Southwest is today N21SW. On the right side, the word Southwest was in the same place as today, but also had the word Airlines painted on the upper rear portion of the fuselage.N20SW.
Southwest introduced the Canyon Blue Fleet in 2001, its first primary livery change in its 30-year history. Spirit One was the first plane painted in the color scheme. The new livery replaces the primary beige color with canyon blue and changes the Southwest text and pinstripes to gold. (The orange tail end continues to still be used; there was one model with both liveries combined to celebrate the company's 35th anniversary.) The pinstripe along the plane is drawn in a more curved pattern instead of the straight horizontal line separating the colors in the original. The original livery is gradually being phased out, but three aircraft will remain in the original livery to commemorate Southwest's original three cities. As of November 16, 2007, Southwest had nearly completed updating the fleet.
Southwest's livery designs exploit the aesthetic appeal of blended winglets as well. The first planes to be fitted with the winglets remain in the plain colored winglet (matching the stripes on the fuselage), but later aircraft to be fitted have winglets with "SOUTHWEST.COM" written on them. All aircraft will eventually be repainted to the ".com" winglets. Special livery aircraft with winglets, such as Shamu, have plain white winglets.
Some Southwest planes feature special themes, rather than the normal livery. These theme planes have been given special names, usually ending in "One". Some of the most well-known examples are:
All special planes prior to Spirit One originally wore the standard beige, red and orange livery colors on the vertical stabilizer and rudder. Subsequent special editions—Maryland One, Slam Dunk One, etc. so far—feature tails with the canyon blue color scheme, and all earlier specials, with the exception of Triple Crown One, have been repainted to match.
The Southwest Airlines headquarters are located on the grounds of Love Field in the Love Field area of Dallas, Texas. Southwest moved into its current headquarters in 1990. At that time the headquarters had 256,000 square feet (23,800 m2) of space and approximately 650 employees. The facility was built at a cost of $15 million in 1990 dollars. In early 1995 the building received an additional 60,000 square feet (5,600 m2) of space. As of 1996 about 1,400 employees worked in the three story building.
In March 1996, the airline announced that it would begin to build a 300,000 square feet (28,000 m2) addition to the existing corporate headquarters at a cost of $30 million in 1996 dollars. This occurred after, on Wednesday March 13, 1996, the Dallas City Council unanimously voted to allow for the construction. The airline leased two additional tracts of land, a total of 10 acres (4.0 ha) of space, from the City of Dallas to build a new pilot training facility, a headquarters expansion, and additional parking spaces. A $9.8 million new pilot training facility was built on a 5 acres (2.0 ha) plot of land owned by the city of Dallas; it was scheduled to be completed Spring 1997. With the new pilot training facility built, the old one would be removed and the company would expand its headquarters building to the north. 120,000 square feet (11,000 m2) of building space, which had a price of $16 million including fixtures, was built, making the headquarters have a total of 436,000 square feet (40,500 m2). The airline also leased 4.8 acres (1.9 ha) from the city of Dallas to build additional parking; 700 spaces were added to the existing 1,200. After the facilities announced in 1996 were added, Southwest had a total leasehold of about 24 acres (9.7 ha) of land, including its headquarters, training facilities, and parking. By the end of 1997 the expansion of the facilities at Love Field and several terminal improvements were expected to cost Southwest $47 million.
|This page or section does not have any sources. You can help Wikipedia by finding sources, and adding them. Tagged since December 2010|
Southwest Airlines is an airline company based in Dallas, Texas. The airline has been in business since 1971. It travels in the United States to 65 cities. It does not center its flights around one airport "hub", and operates what is called "point to point". Many of Southwest's flights are to airports in the Southwestern United States, such as Dallas Love Field and Hobby Airport, but it also flies to airports in other parts of the country, such as Chicago Midway Airport. The company is the largest operator of the Boeing 737, and only operates the Boeing 737 in its current fleet. Southwest Airlines is known for its fun-loving attitude and passion for customer service, as well as its brightly painted planes. The planes used to be painted red and brown, but are now painted red and blue. For several years, Southwest was the largest airline in the United States, but is not anymore now that Delta merged with Northwest.
Southwest Airlines will be buying the smaller low cost airline, AirTran Airways. They will be keeping the Southwest Airlines brand.