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Hub You - Southwest Airlines Operations - A Strategic Perspective
Too many professionals struggle with an unhealthy balance of work and play, as their careers take over the majority of their time and leave them with little energy to devote to other priorities such as family, friends, and personal well-being.Is there a way to find happiness through a successful career that will allow you to still enjoy all aspects of your life? Believe it or not, there is. You, too, can join the ranks of the lifestyle entrepreneurs.A lifestyle entrepreneur is somebody who goes into business – not primarily for financial rewards – but for lifestyle reasons. Instead of money, the most common motivation of the lifestyle entrepreneur is a fierce desire for independence. They desire to work for themselves, and run a business that is aligned with their lifestyle.Studies show more and more people are turning towards lifestyle entrepreneurship. According to the market research company Warrillow and Co., as many as 90% the roughly 20 million American small business owners appear to be motivated by lifestyle more than money. In a 1999 Lou Harris survey, it was found that money was the main driver for very few small entrepreneurs and self-employed people. Instead, nine out of ten entrepreneurs said a desire for independence prompted them to become entrepreneurs.Lifestyle entrepreneurs generally have a passion that they are yearning to turn into a career and my job is to help show them how to turn that passion into profits.Anyone can become a lifestyle entrepreneur. It's all a matter of perspective. Discover the greatest success that goes beyond the bottom line—the success of a fulfilling lifestyle. The following are my ten ways to create success as a lifestyle entrepreneur:1. Define Your Value System: What is important to you?A value is a belief, a mission, or a philosophy that is really meaningful to you. Whether we are consciously aware of them or not, every individual has a number of personal values.Values can range from the ordinary, such as the belief in hard work, self-reliance, and punctuality, to more psychological values, such as concern for others, trust in others, and harmony of purpose.In order to succeed as a lifestyle entrepreneur, you must know what is important to you and honor it both in business and in life.2. Define Your Vision: What does your life look like in the next three years?A compelling vision can help you succeed, be more satisfied with your life, and get the most out of your business relationships.Numerous experts on leadership and personal development emphasize how vital it is for you to craft your own personal vision for your life.And here's a tip when you put that vision in writing: the subconsci
Labor Costs
The labor costs for Southwest typically accounts for about 37% of its operating costs. Perhaps the most critical element of the successful low-fare airline business model is achieving significantly
1) UPS provides $100.00 of FREE insurance on every package. You may purchase additional insurance for higher value items. You pay for ANY insurance at the post office, and the rate STARTS at $1.35.2) UPS services are GUARANTEED! If the package does not arrive on time (unless weather affected the shipment), even on a ground shipment (except from 12/12 through 12/24 of any year due to the volume of air packages that in the system for the Christmas rush), you get a FULL REFUND of your shipping charges, usually within 2 weeks of filing. Try and get a refund from the post office, even for Express Mail.3) UPS packages are trackable. The post office charges you for the "privilege" of tracking your package. There is no need to pay for certified mail and/or return receipt requested when you have UPS as the alternative. The UPS driver normally obtains a signature for shipments to commercial establishments. Even for residential deliveries, the driver has the option to require a signature or just leave the package out of sight, but the tracking system does tell you where the driver left the package.The added value of using UPS is evident in these three benefits, so... stop by your local The UPS Store to start saving time and money for all your shipping needs!
Southwest Airlines is the largest airline measured by number of passengers carried each year within the United States. It is also known as a ‘discount airline’ compared with its large rivals in the industry. Rollin King and Herb Kelleher founded Southwest Airlines 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. The airline began with one simple strategy: “If you get your passengers to their destinations when they want to get there, on time, at the lowest possible fares, and make darn sure they have a good time doing it, people will fly your airline.” This approach has been the key to Southwest’s success. Currently, Southwest serves about 60 cities (in 31 states) with 71 million total passengers carried (in 2004) and with a total operating revenue of $6.5 billion. Southwest is traded publicly under the symbol “LUV” on NYSE.
Facts:
* The first major airline to fly a single type of aircraft (Boeing 737s)
* The first major airline to offer ticketless travel system wide including a frequent flier program based on number of trips and not number of miles flown.
* The first airline to offer a profit-sharing program to its Employees (instituted in 1973).
* The first major airline to develop a Web site and offer online booking. In 2001, about 40 percent ($2.1 billion) of its passenger revenue was generated through online bookings at www.southwest.com. Southwest's cost per booking via the Internet is about $1, compared to a cost per booking through travel agents of $6 to $8.
Key competitive advantages:
* Low Operational costs / High Operational Efficiency
* Award winning customer service
* Human Resource practices / Work culture
Operations Analysis – Competitive Dimensions:
Southwest clearly has a distinct advantage compared to other airlines in the industry by executing an effective and efficient operations strategy that forms an important pillar of its overall corporate strategy. Given below are some competitive dimensions that will be studied in this paper.
1. Operational Costs and Efficiency
2. Customer Service
3. Employee/Labor Relations
4. Technology
1. Operational Costs and Efficiency
After all, the airline industry overall is in shambles. But, how does Southwest Airlines stay profitable? Southwest Airlines has the lowest costs and strongest balance sheet in its industry, according to its chairman Kelleher. The two biggest operating costs for any airline are – labor costs (approx 40%) followed by fuel costs (approx 18%). Some other ways that Southwest is able to keep their operational costs low is - flying point-to-point routes, choosing secondary (smaller) airports, carrying consistent aircrafts, maintaining high aircraft utilization, encouraging e-ticketing etc.
Labor Costs
The labor costs for Southwest typically accounts for about 37% of its operating costs. Perhaps the most critical element of the successful low-fare airline business model is achieving significantly
The Securities and Exchange Commission (SEC) is the most well-known and feared governing body in the financial world. Its very name can be intimidating to a small company hoping to go public, but it doesn’t have to be.The SEC was established by Congress to regulate securities markets with the intent of protecting investors. For this reason, it requires registration for the issuance of almost any kind of securities, including mail or internet-based issues.In an initial public offering, the process of filing necessary paperwork with the SEC can be time-consuming and complicated. First, a registration for must be filed and declared effective. Despite the fact that the registration becomes public knowledge immediately, the company may not attempt to sell shares until the registration is declared effective. Registration documents include a prospectus to be given to all investors, as well as a section that is made available on the SEC website but which does not have to be provided to investors. A company’s underwriter will prepare and file these documents with the help of accountants and lawyers.For a company that has gone public through an IPO, SEC requirements don’t end with the issuance of shares. Continued disclosures must be made concerning a variety of topics, including details of operations, key employees and shareholders, major stock transactions, and general health of the company. Because these disclosures are so numerous and frequent, there is a substantial cost involved that should not be overlooked when making the decision to go public.Despite the expense of SEC compliance, the cost of issuing stock would be higher without the SEC. Because of SEC regulations, a large pool of information is available to potential investors. Further, many otherwise unethical businesses are given good motivation to avoid misrepresentation on company financial documents. This makes investing safer for everyone, and allows investors to trade with less prejudice at higher prices.For smaller businesses, the process of issuing shares is less complicated. Shortened forms and procedures allow businesses seeking smaller amounts of capital to publicly sell shares without the use of an underwriter. These rules also allow slightly reduced reporting requirements, as compared to companies going public through an initial public offering. The overall effect is a public issuance that costs significantly less than the traditional process for going public.More recent SEC rules also allow for the public trading of direct public offerings issued by those small companies. With the appropriate filings in place, small companies can apply to have their shares traded on over-the-counter bulletin board exch
Facts:
* The first major airline to fly a single type of aircraft (Boeing 737s)
* The first major airline to offer ticketless travel system wide including a frequent flier program based on number of trips and not number of miles flown.
* The first airline to offer a profit-sharing program to its Employees (instituted in 1973).
* The first major airline to develop a Web site and offer online booking. In 2001, about 40 percent ($2.1 billion) of its passenger revenue was generated through online bookings at www.southwest.com. Southwest's cost per booking via the Internet is about $1, compared to a cost per booking through travel agents of $6 to $8.
Key competitive advantages:
* Low Operational costs / High Operational Efficiency
* Award winning customer service
* Human Resource practices / Work culture
Operations Analysis – Competitive Dimensions:
Southwest clearly has a distinct advantage compared to other airlines in the industry by executing an effective and efficient operations strategy that forms an important pillar of its overall corporate strategy. Given below are some competitive dimensions that will be studied in this paper.
1. Operational Costs and Efficiency
2. Customer Service
3. Employee/Labor Relations
4. Technology
1. Operational Costs and Efficiency
After all, the airline industry overall is in shambles. But, how does Southwest Airlines stay profitable? Southwest Airlines has the lowest costs and strongest balance sheet in its industry, according to its chairman Kelleher. The two biggest operating costs for any airline are – labor costs (approx 40%) followed by fuel costs (approx 18%). Some other ways that Southwest is able to keep their operational costs low is - flying point-to-point routes, choosing secondary (smaller) airports, carrying consistent aircrafts, maintaining high aircraft utilization, encouraging e-ticketing etc.
Labor Costs
The labor costs for Southwest typically accounts for about 37% of its operating costs. Perhaps the most critical element of the successful low-fare airline business model is achieving significantly
Are you tired of all the work at home gimmicks? So was I. I was getting tired of doing the same routine everyday. I was really tired of having someone else raising my son for me. I missed out on alot things that I should have been there for. But I was not, because I had pulled a double shift that night or someone did not show up so I covered for them at the job. I was not happy with my life and the way things were going.To be totally honest, I too thought all Home Based Businesses were scams. I would never give them the time of day until my life really started getting out of control. I found myself going to college, working, and having not one bit of free time with my son. Until now. I went on the internet, did some research and found a great way to work at home, earn a great income, and have extra time to do whatever I want with my son.We work with an award winning, 21 year old company with an impeccable record with the Better Business Bureau and a top notch compensation plan!! Get excited! Join a team who together are working from home and loving it. We work for ourselves, but never by ourselves.I have been a part of this incredible Team for almost 2 months, and working from home with my beautiful 4yr old little boy by my side has been a wonderful blessing. Be proud to work with such an amazing group.
* The first major airline to develop a Web site and offer online booking. In 2001, about 40 percent ($2.1 billion) of its passenger revenue was generated through online bookings at www.southwest.com. Southwest's cost per booking via the Internet is about $1, compared to a cost per booking through travel agents of $6 to $8.
Key competitive advantages:
* Low Operational costs / High Operational Efficiency
* Award winning customer service
* Human Resource practices / Work culture
Operations Analysis – Competitive Dimensions:
Southwest clearly has a distinct advantage compared to other airlines in the industry by executing an effective and efficient operations strategy that forms an important pillar of its overall corporate strategy. Given below are some competitive dimensions that will be studied in this paper.
1. Operational Costs and Efficiency
2. Customer Service
3. Employee/Labor Relations
4. Technology
1. Operational Costs and Efficiency
After all, the airline industry overall is in shambles. But, how does Southwest Airlines stay profitable? Southwest Airlines has the lowest costs and strongest balance sheet in its industry, according to its chairman Kelleher. The two biggest operating costs for any airline are – labor costs (approx 40%) followed by fuel costs (approx 18%). Some other ways that Southwest is able to keep their operational costs low is - flying point-to-point routes, choosing secondary (smaller) airports, carrying consistent aircrafts, maintaining high aircraft utilization, encouraging e-ticketing etc.
Labor Costs
The labor costs for Southwest typically accounts for about 37% of its operating costs. Perhaps the most critical element of the successful low-fare airline business model is achieving significantly
Nobody I know wants to spend the last period of their life struggling with debt. Unfortunately though, that is exactly what is happening for an increasing number of senior citizens. There are a lot of options available to younger people such as getting a second job to pay off the debt faster are just not available to senior citizens. So what is? Here is an often overlooked list of items that can help you in such circumstances:Even if you have some savings it is not a good idea to pay off the loan even though you are paying 20% interest on one hand and earning only 4% on the other. The reason is that incase you face any financial burden in the future, you will not find help anywhere. So it is wiser to keep your cash to yourself, and credit to your creditor! Easier said than done, but remember, your money is for your security.Also, if you really don’t have the money to pay off your credit card debt you can consider letting the creditors sue you! This decision has more psychological barriers than any other. If a creditor sues you they cannot seize your property. The worst they can do is put a lien against it and claim it only after you die.If you don’t have a property then the debt is written off with your death and your inheritors don’t have to pay it. Creditors are also unable to access your retirement funds so you really don’t have that much to lose, until you lose your life, at which point you have lost everything anyway.If you have a life insurance policy you can definitely consider taking a cash surrender loan. This loan doesn’t have to be repaid and your policy value is surrendered when you take one. The benefit here is realizing that this policy money is received by your heirs only after you die, and is therefore not helping you in any way.Rather than draw on a line of credit for your home a better idea would be to go for a reverse mortgage. In a line of equity, you have to repay the sum with interest, in a reverse mortgage you don’t have to repay anything but simply give up ownership rights of the property after you pass away. You will receive a fixed sum monthly until you die, where after the property will be taken by your creditor. This means you are simply forgoing leaving the asset to your loved ones, but are able to secure an additional monthly income to improve your life while you live.It’s up to you. Do you want to sacrifice your golden years for your heirs, or do you want to live them for yourself?
1. Operational Costs and Efficiency
2. Customer Service
3. Employee/Labor Relations
4. Technology
1. Operational Costs and Efficiency
After all, the airline industry overall is in shambles. But, how does Southwest Airlines stay profitable? Southwest Airlines has the lowest costs and strongest balance sheet in its industry, according to its chairman Kelleher. The two biggest operating costs for any airline are – labor costs (approx 40%) followed by fuel costs (approx 18%). Some other ways that Southwest is able to keep their operational costs low is - flying point-to-point routes, choosing secondary (smaller) airports, carrying consistent aircrafts, maintaining high aircraft utilization, encouraging e-ticketing etc.
Labor Costs
The labor costs for Southwest typically accounts for about 37% of its operating costs. Perhaps the most critical element of the successful low-fare airline business model is achieving significantly
I've come to the conclusion that to be successful - really successful - you've got to love what you do.Not like it okay. Not do it because you know how. Not do it because you've invested so much time and energy into it. I mean LOVE it! The kind of love that makes you want to get up in the morning and get going. Because your work has meaning, significance, and fulfillment. If these aren't words that describe what you do day-in and day-out, then perhaps this year is the time to make a change, to step up to your big, bodacious moment - or BoMo as I call it.How satisfied are you with your career on a scale of 1 to 10, with 10 being extremely satisfied?That's the question I kept asking myself during my ten and a half years at AOL during the 1990s. Year after year my answer was a 7, 8, or higher. The vast majority of time I felt passionate about what I was doing; I believed my contribution truly mattered. When my score dipped I asked myself serious questions as to why. Was my current role not longer interesting? Did I like the people I worked with everyday? Did I feel I was being fairly compensated?Several times this process helped me pinpoint changes I needed to make to get back on track. But when my rating was below 6 and stayed that way, I knew it wasn't about making adjustments. It was about facing the fact that it was my time to go. My BoMo was at hand.I still remember the scene. I was in my manager's office after being away for several weeks attending grad school. He caught me up on what had happened while I was gone that I needed my attention. I listened and took notes, all the while waiting to find out whether he was moving to another department, which would open his position and give me a last shot at the promotion I wanted.I sat there with a strange mix of calm and anxiousness. I had already determined that if my boss was staying then I was going to plan my exit. After 75 minutes, no word. So I casually, but deliberately, asked him how plans were working out for him. He quickly told me they weren't and that he was staying. And, quietly, resolutely, to myself I had my BoMo. I was leaving. I had to find the next thing that would give me the internal satisfaction that made a career worthwhile.You see, I knew that when I loved my job then I could do my best work and create the career satisfaction I desired, along with a good paycheck. The sad fact is that most Americans hate their jobs. Its pure drudgery and they're just in it to pay the bills. It doesn't have to be this way. Especially in these challenging times of economic and global unrest, it's so easy to forget that we live in an unprecedented country. There's no other nation on earth where
Labor Costs
The labor costs for Southwest typically accounts for about 37% of its operating costs. Perhaps the most critical element of the successful low-fare airline business model is achieving significantly higher labor productivity. According to a recent HBS Case Study, southwest airlines is the “most heavily unionized” US airline (about 81% of its employees belong to an union) and its salary rates are considered to be at or above average compared to the US airline industry. The low-fare carrier labor advantage is in much more flexible work rules that allow cross-utilization of virtually all employees (except where disallowed by licensing and safety standards). Such cross-utilization and a long-standing culture of cooperation among labor groups translate into lower unit labor costs. At Southwest in 4th quarter 2000, total labor expense per available seat mile (ASM) was more than 25% below that of United and American, and 58% less than US Airways.
Carriers like Southwest have a tremendous cost advantage over network airlines simply because their workforce generates more output per employee. In a study in 2001, the productivity of Southwest employees was over 45% higher than at American and United, despite the substantially longer flight lengths and larger average aircraft size of these network carriers. Therefore by its relentless pursuit for lowest labor costs, Southwest is able to positively impact its bottom line revenues.
Fuel Costs
Fuel costs is the second-largest expense for airlines after labor and accounts for about 18 percent of the carrier's operating costs. Airlines that want to prevent huge swings in operating expenses and bottom line profitability choose to hedge fuel prices. If airlines can control the cost of fuel, they can more accurately estimate budgets and forecast earnings. With growing competition and air travel becoming a commodity business, being competitive on price was key to any airline’s survival and success. It became hard to pass higher fuel costs on to passengers by raising ticket prices due to the highly competitive nature of the industry.
Southwest has been able to successfully implement its fuel hedging strategy to save on fuel expenses in a big way and has the largest hedging position among other carriers. In the second quarter of 2005, Southwest’s unit costs fell by 3.5% despite a 25% increase in jet fuel costs. During Fiscal year 2003, Southwest had much lower fuel expense (0.012 per ASM) compared to the other airlines with the exception of JetBlue as illustrated in exhibit 1 below. In 2005, 85 per cent of the airline’s fuel needs has been hedged at $26 per barrel. World oil prices in August 2005 reached $68 per barrel. In the
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