Southwest airlines

Southwest airlines had long been one of the standout performers in the U.S. airline industry. As you know, it is famous for it’s low fee, which are 25~30 percent below those of its major rivals, and these are balanced by an lower cost structure, which has enabled it to record superior profitability even in bad years. When the industry faced slumping demand, Southwest was the only airline among the top eight in the united States to show a profit for the quarter.

Southwest’s low cost structure seems to be very high employee productivity? I think that one way the airlines measure employee productivity is by the ratio of employees to passengers carried.
How does it do this?

First, Southwest devotes enormous attention to the people it hires. On averages, the company hires only 3 percent of those interviewed in a year. When hiring, it emphasizes teamwork and a positive attitude. Southwest rationalizes that skills can be taught but a positive attitude and a willingness to pitch in cannot. Southwest also creates incentives for it’s employees to work hard. All employees are covered by a profit-sharing plan has to be invested in southwest airline stock.

This gives rise to a simple formula. 1st: The harder employees work, the more profitable southwest becomes, and the richer the employees get. The results are clear. At other airlines, one would never see a pilot helping to check passengers onto the plane.

At southwest, pilots and flight attendants have been known to help clean the aircraft and check in passengers at the gate. They do this to turn around an aircraft as quickly as possible and get it into the air again, because an aircraft doesn’t make money when it is sitting on the ground.

References: www.southwest.com
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