Quote of the day:
David Woo
Southwest has turned a profit throughout the wars and was one of the handful of airlines profitable last year, when even American lost money. Southwest earned $ 47 million, despite a small loss in the fourth quarter. Only Delta and United made more money, but Delta has seven times and UAL nine times Southwest's revenues — and both had lower margins. Southwest had another small loss in 1991's first quarter, but was in the black in the second quarter.
Southwest succeeds with an approach that is entirely different from that of any other airline. It has spent two decades carving out a unique niche among U.S. airlines, one that others have tried to copy but have never duplicated. It is the nation's only high-frequency, short-distance, low-fare airline. Southwest has 83 flights a day between Dallas and Houston, for example.
The reason that Southwest flies such short distances and offers fares so much lower than other airlines is simple. Kelleher does not see other airlines as his principal competition. "We're competing with the automobile, not the airlines," he explains. "We're pricing ourselves aginst Ford, Chrysler, GM, Toyota and Nissan. The traffic is already there, but it's on the ground. We take it off the highway and put it in the airplane.
A key factor in keeping costs low is the productivity of Southwest's employees. Unlike many of the airlines that sprang up under deregulation, Southwest's employees are unionized. But by not having an antagonistic relationship with the unions as, for example, Frank Lorenzo did at Eastern, Southwest has negotiated flexible work rules. To speed up turnaround time, flight attendants and even pilots pick up the trash left behind on planes, for example.
When Southwest started flying in 1971, its flight attendants wore hot pants and boots. Those have now given way to shorts, casual shirts and sneakers. On-board antics range from the zany to the mildly outrageous . Kelleher has visited Southwest's maintenance hangars at 2 a.m. dressed in drag as Klinger from the TV show. He has flown on Easter in an Easter bunny costume, handing out peanuts and exercising his Irish charm on passengers.
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