Four tips you can learn from Southwest Airlines

Four tips you can learn from Southwest Airlines

Amidst all the turmoil of failing financial markets, skyrocketing energy prices and gloomy economy, Southwest Airlines is still surviving very well and in fact continuing on its leadership in the airline business. This success in the highly competitive airline business is being accomplished simply by following basic principles of business profitability and customer satisfaction that have been the foundation of successful businesses for decades. While it is virtually impossible to deal with all of these lessons in great detail in one article like this, we can still at least touch on a few of these here and now that you could potentially use in your own business to increase profitability and customer satisfaction.

Control your costs. Southwest controls its costs very effectively. Their pay rates for pilots, flight attendants, mechanics and baggage handlers is on the low rung of the pay scale in comparison to others in the same business. Southwest controls its maintenance costs by having a limited number of variations of models and makes of their engines and airplanes. This allows for interchangeability of spare parts whose inventory levels can be kept fairly low. Additionally, pilots and maintenance personnel do not have to learn about a million different pieces of equipment to learn and training costs can be reduced. This same concept can be used in other businesses as far as attempts to keep costs under control.

Keep down times to a minimum. Southwest Airlines has a lowest turnaround time of all major airlines as far as time between unloading a plane and reloading for subsequent takeoff. This aircraft on ground time is unproductive as far as revenue is concerned and should be kept to a minimum. The same concept can be used whether you are a bus operator or a furnace operator. Furnaces are usually loaded with parts to be processed and time to unload parts and reload the next batch needs to be kept as low as possible.

Purchase raw materials in advance at the best prices. Southwest purchases fuel in bulk when market prices are low. This allows them to compete very effectively. Similar strategies were used by Proctor and Gamble seventy years ago as far as purchasing raw materials. Similar concepts can be used whether you are in the steel component manufacturing business or in the business of making plastic bottles. Raw materials purchasing is one of the weakest links usually in organizations and lots of expensive mistakes occur in this one step.

Empower employees. This is the single biggest lesson that every organization large or small can learn from Southwest Airlines. Employees at Southwest do not even have an employee manual. Instead they are given an employee guideline with instructions to violate it if needed to keep a customer happy. This high level of empowerment allows employees in all levels of the company to really concentrate on customer satisfaction which is the key to revenue growth and increased profitability. Most companies have centralized decision making and rigid controls on employee powers and that is counterproductive many times in todays fast paced world of business.

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