southwest airlines faces new challengeCTION 11.CASE STUDY -Southwest Airlines Faces New ChallengesFor 32 years , South west Airlines has used the same formula to maintain its position asthe most profitable airline in the U. It offers low fares, high frequency flights and goodservice; it flies on Boeing 737s; it doesn't offer connecting flights, reserve seating; or freemeals; it often relies on less expensive, secondary airports; and it prides itself on havingthe hardest working and most productive employees in the industry. The companybelieves its true competitive advantage is its workforce.Most of the major airlines cost per seat-mile is nearly 100 per cent higher than Southwest.The company gets the cost advantage by paying its pilots and flight attendantsconsiderably less than the competition and having them fly more hours. It has made upfor lower pay with generous profit sharing and stock options plans. In addition, becauseof Southwest's rapid growth, it has provided its employees with something rare in theairline industry: job security. Because a large portion of a Southwest employees'compensation comes in the form of stock options, they have worked harder and moreflexibly than their peers at other airlines. For instance, pilots will often help ground crewmove luggage and work extra hard to turn planes around fast. Of course, many Southwestemployees originally joined the company and have stayed because of the spirit of fun.The company has always encouraged employees to work hard but also have a good time.A sense of humour, for instance, has long been a basic criterion in the selection of newemployee

challenges - F2022 BUS195-204 0 Southwest Airlines Faces New Challenges For 32 years, Southwest Airlines has used the same for- against United, American. Delta, and other major airlines. mula to maintain its position as the most profitable air- They loved the role of being the underdogs and having