Low cost carriers are all the rage in Europe, with hundreds being created and going bankrupt each year. In America, however, this isn’t so common. There are a few low cost carriers in the US, but by far the most successful is Southwest Airlines. What makes them so much more successful than the others?
There are a number of factors that make Southwest so much more successful than other low cost carriers in the US. These range from simple tricks, to more in depth ways.
History
Southwest began under a different name- Air Southwest Co. founded by Herbert Kelleher and Rollin King in Texas in 1967. For its time, its business model as revolutionary, and threatened to undercut many of the more established Texan airlines.
This was due to the fact that the airline was designed that it would only fly within Texas, and thus, would avoid many laws and regulations. This was done with the intention to undercut prices in the attempt to become Texas’ largest airline.
Due to this, many established Texan airlines took the newly formed airline to court in 1970. A court battle that the newly founded airline won, due to Herbert Kelleher being a fantastic lawyer in his own right!
By 1971, the newly formed airline began to operate regularly scheduled commercial flights. The airline stayed within its Texas-only boundaries. Initially, the airline only flew between Dallas Love Field and Houston and between Love Field and San Antonio.
In 1971, the airline officially started using its now famous name, changing it to Southwest Airlines Co.
In 1975, the airline expanded to flying to several other Texas destinations, and by 1979, Southwest began flying to neighboring states, after the regulations that Southwest had tried to avoid in the past, had been lifted. By the start of the ’90s, Southwest had managed to begin operations to the East and Southeast of the US!
Southwest as of yet, has not joined any airline alliance, nor does it (publicly) show any interest of doing so.
In 2011, Southwest Airlines acquired AirTran Airways, its biggest rival at the time. Many called Southwest out for it being too monopolistic, as it was an act of airline consolidation.
Why is Southwest Airlines so successful?
There are many reasons why the airline is so successful. Many of these were traits sewn in by the founders, but some have been picked up along the way…
Only operating one type of aircraft
For almost all of it’s history, Southwest Airlines has operated a purely 737-based fleet. The only time that this was not the case was during a period between 1979 and 1987, where they operated a small fleet of 727-200s.
Even when Southwest Airlines bought out AirTran Airways in 2011, they leased out the old, non-737 members of the AirTran fleet to other airlines in order to keep their only 737 fleet.
By only operating one type of aircraft in their fleet, the airline is able to keep their operating costs low. All of ground crew are able to work on all of their aircraft, all of their pilots are able to fly all of their aircraft and all of their technicians can work on all of the aircraft, 100% hassle free!
Customer focus
Most airlines, especially low costs ones like in Europe, operate a “Cattle car” style of airline. That is to say, ramming in as many people as possible in to as small an airliner as possible.
However, Southwest Airlines hasn’t done that. Well, it has, just not to the extent that other airlines have done!
Most low cost carriers in Europe do not have in-flight entertainment systems, simply because there’d be no profit left in them at the end of it all. However, Southwest does. A two hour flight from England to Spain on Ryanair may not have in-flight entertainment. But a two hour long flight from Denver to Phoenix on Southwest Airlines certainly will!
Due to this focus on the passenger, Southwest Airlines has acquired a loyal customer base. A customer base that allow Southwest to be one of the largest airlines in the country!
Happy workplace
Airlines don’t like unions. They never have done, they probably never will do. However, Southwest Airlines encourages them. They actively encourage their employees to join the unions! For most other airlines, they’d be pulling their hair out over this, but Southwest has an ace up its sleeve.
By having their employees joining a union, they get two benefits: the employees feel happy and the chance of a strike is limited. Yes, strikes are less likely when the employees join a union! In fact, Southwest Airlines has never once had a strike!
Because the employees feel so happy, they perform a better job and provide a better user experience!
Attractively low costs
Everyone loves a bargain right? Southwest Airlines’ entire business model is built on that pretense. You want a bargain, and they want to provide you with that bargain!
Just like their European counterparts, Southwest operates a “No frills” policy. You don’t get free in-flight meals, you don’t get free drinks, you don’t get a free goody pack. You get nothing unless you pay for it.
Whilst some people may not like the idea, it is attractive to many people. If they can get across the country for half the price, even at a little discomfort, they will do it!
The CEO is a former pilot
Most airlines have at least one CEO, or at least someone who is the boss of the airline. For most airlines, this person is someone who has come from another sector. Sometimes, this sector is something to do with the aviation sector, but often they are not.
However, with Southwest Airlines, they have employed a former amateur pilot. Yes, Gary Kelly is a former executive for other industries, and is a chartered accountant, he understands what pilots go through.
Yes, he may not know everything about what a commercial pilot may go through, but it’s more than what other airline CEOs know. When there is a set back, like the 737 MAX, he deals with it as though he would broken flaps on his aircraft. He gets it done.
Why else do you think Southwest Airlines is so successful? What special competitive advantages does it have? Tell me in the comments!
Image courtesy of Tomas Del Coro via Flickr
Free 2 50lb luggage than any other airline carrier
There is also that, I completely forgot!
The “Wanna getaway” pricing. The hassle free service if you have to cancel a flight. The friendliest attendants in the world.
They just make me feel good about their entire operation.
That’s why we fly with them. When you start adding car seats, strollers, pack and plays etc. extra baggage fees get extremely expensive. Being able to change your flight without penalties, especially for a lower rate, is a huge incentive too.
If you cancel your flight, you will have travel funds credit up to one year to repurchase a ticket.
Southwest do not charge 100.00 to change travel date.
You would only pay the difference of the ticket if the cost of the exchanged date is more or a refund of the cost of the ticket is less. Win win
The luggage advantage, the low fare calendar, the stellar crew, courteous, friendly and so helpful, the open seating, the free reserved seat offer if you need extra space, the service provided for handicapped persons, the no charge for changing reservations, and even giving credit for the cheapest of flights with no cancelation fee and the soft drinks ARE free, just not the alcohol. And so much more make this airline the only one I will fly. Thank you SW. You go out of your way to make travel fun, comfortable, and affordable.
I’m on a fixed income and can’t afford to fly my daughter and granddaughter from Utah to Indianapolis on any other airline. Thank you Southwest because of your low fare calendar I’m seeing my family the first week in June. I’m so excited. I haven’t seen my daughter and granddaughter in over four years. Thanks to Southwest I am.
They were smart to login jet fuel rates when they were down for a long time. So while other airlines struggle with the rising and ever changing jet fuel prices, southwest has its peace of mind cause its rates doesn’t change while they are still in contract with supplier, thus they can reduce fairs, offer free 2 bags policy amongst other perks they offer and still be competitive.
All of the above plus their rewards program is the best. I’m able to use my points acquired more quickly with Southwest. I only pay about $5.50 for a oneway flight using points. I love the drink coupons that come in the mail. Who doesn’t want a free inflight alcoholic beverage. You can give it to a friend or a person sitting next to you on the flight. No problems also with damaged luggage disputes and hassles occurred from cancelled and extended delayed flights. Southwest will give Luv Vouchers from $50- at least $300 or $500 to calm your feelings of despair. You got to love southwest flight attendants. Many make the flight enjoyable with some act of kindness or making some funny commentary on the overhead speakers when giving inflight information.