The New York Times has a story about Southwest Airlines that you can read HERE.  People always like to try to define Southwest and, in my view, often credit them in areas that really don’t apply and miss the point to so many facets of their success.

I’m always a bit amused that a distinction in Southwest’s success is so often low cost.  While there is no doubt that offering lower fares is a key component in Southwest’s model, people very often miss the fact that it isn’t a low service model.  To the contrary, Southwest delivers on its promises more consistently and with a smile.  If anything, it’s their low fares that draw people to the airline but it’s the service that makes them a repeat customer.  Let’s not confuse the fact that Southwest has never offered a meal with the lack of service.  Better yet, notice that their view on baggage fees is that they aren’t fair and their customers deserve better.

Another component to their success is both effiency and productivity.  Southwest doesn’t do anything spectacularly different than other airlines when it comes to running their flights.  They still have cabin crew, pilots, ground handlers, gate agents, etc getting that flight moving across the country.  The difference is that Southwest has managed to recognize that their people are a weapon for success rather than the “enemy”.  They pay well, treat their people well and ask for quite a bit in return.  That gives them the edge in productivity.  Let’s not fault them for remaining consistent in that policy for 40 years and, frankly, it’s time to stop waiting for the other shoe to drop in that area, too.

Industry insiders like to characterize them as cold and ruthless when it comes to a market.  First, let’s not act like this is a daycare playground where everyone is supposed to be treated equal and fair.  It is business and in this particular business, competition is almost always fierce.  Just because Southwest is able to fight well doesn’t make them cold and ruthless.  It makes them a good business with good people.

Furthermore, they are, if anything, often a very conservative company.  They study things, experiment, wait for the right moment (and in this business timing is everything) and try very hard to enter new markets when they can do so on their terms, not their competitors.  They are who we would wish our bankers of today would be.  They aren’t the pirates or the rebels, they’re the responsible people who show a great deal of concern for their stakeholders. 

Do they look for weaknesses?  Absolutely.  Is it smart to enter a market where an incumbent has an overwhelming advantage in every way over you?  Of course not.  Timing, as I’ve already said, is everything.  Just because another legacy airline is weak and unable to do business on any real world market terms doesn’t mean that Southwest should treat them with kid gloves.   That other airline’s weaknesses are opportunity and it’s nothing that anyone else in any other business wouldn’t try to capitalize on.

I’m all too often amused at how SWA is made out to be someone clinging to their business model after all these years and how so many perceive them to be unable to change.  Their so agile that they’re moving in new directions while other airlines are still figuring out they have a problem. 

They went sexy in the 70’s and no one ever noticed they went business casual in the 80’s so that their own appearance would match their customer’s own model.  They’ve stuck to the 737 but they’ve driven that aircraft’s design changes over the years with their own needs and few have ever noticed that.  It’s remarkable that one airline could hold such an influence over a business like Boeing and not manage to sell itself it out in the process. 

When there was war in the early 1990’s that suddenly impacted their business, the entire company recognized the needs to reduce costs immediately and did so in a matter of days while other others languished in the markets bleeding red in bright streams.  When fuel became a much more uncertain commodity, they became an early adopter of fuel hedging in order to make those costs much more certain and predictable. 

When they found themselves with no more underserved markets to enter, they didn’t stagnate, they reinvented themselves and began entering larger and larger markets.  Instead of rushing into places at any cost, they charted a course that required them to meet their own criteria  for entering a new market and then executed flawlessly.   If you had asked anyone 3 years ago if they would ever enter the New York City market properly, no one would have bet on that including me.  Now they’ve got a plan to serve it via 3 airports (La Guardia, Newark and Long Island).

It’s hard to call an airline as old as Southwest a new entrant.  Frankly, I don’t they are a rebel either.  I’m not sure they were ever rebel.  They simply run their business better than virtually anyone else and they do it so consistently that no one ever seems to quite believe that there isn’t something hidden.  I think the markets treat Southwest as that family relative you can never quite believe has it together that much since it doesn’t match what everyone else in the dysfunctional family is doing. 

Is Southwest becoming a legacy airline?  No, not really.  They are simply not following the crowd in everything they do.  They follow their own path and sometimes that means they are in step with the crowd and sometimes they aren’t.  Reading too much into it just results in speculation that doesn’t match fact.

Filed under: Airline History, Airline News, Airline Service by ajax