Reference no: EM132231842

Southwest Airlines is a company that is all business but yet doesn’t take itself too seriously. For the past fifty years, Southwest has been one of the most profitable U.S. carriers. A large part of their success is due to their customer-centric philosophy. Flying out of their Dallas headquarters at the “other airport, Love Field,” Southwest’s New York Stock Exchange symbol is LUV. Their co-founder and chairman, Herb Kelleher, was renowned as a prankster and partyer and used to serve snacks on planes, occasionally dressed as Elvis Presley. He also engaged a major rival in an arm wrestling match to settle an advertising slogan dispute. In response to another competitor’s claim that Southwest was just a no-frills airline, they renamed their peanuts “Frills” for a while.

Southwest’s corporate culture creates superior customer value and goodwill. On one pleasant flight from Baltimore to Fort Lauderdale, Southwest flight attendants played games with the passengers (for example, the passenger with the most credit cards, oldest penny, largest hole in their socks and best memory won cases of peanuts), joked about the captain’s age and encouraged passengers to smile and wave to passengers on the nearby American plane upon landing. As part of their unique business culture, Southwest flight attendants and pilots are known for their entertaining in-flight “safety” messages which offers a clear differentiator in an industry dealing with stress-filled and weary business and consumer travelers. Some of their classic in-flight announcements are listed below:

Heard after a very hard landing in Salt Lake City: The flight attendant came on the intercom and said, "That was quite a bump, and I know what y'all are thinking. I'm here to tell you it wasn't the airline's fault, it wasn't the pilot's fault, it wasn't the flight attendant's fault...it was the asphalt!"

“Weather at our destination is 50 degrees with some broken clouds, but they'll try to have them fixed before we arrive. Thank you, and remember, nobody loves you or your money more than Southwest Airlines."

Passengers were apparently having a hard time choosing seats when a flight attendant announced, “People, people we’re not picking out furniture here, find a seat and get in it!”

Another huge differentiator these days is Southwest’s customer-friendly policy that allows two bags to still fly for free (additional bags are $75 each). While all of the other major airlines charge for checked luggage (and in Spirit’s case, carry-ons, too), Southwest is foregoing potentially hundreds of millions of dollars in “lost” revenues to keep customers happy and loyal. You have likely seen their seen their humorous television commercials, the “Bags Fly Free” campaign.

Southwest’s acquisition of AirTran Airways broadened their flight schedule and international scope. In addition to their core U.S. base, the airline now serves cities in the Caribbean, Central America, Cuba, Mexico and elsewhere. A notorious flawless airline, the company has experienced some recent service quality failures which included engine breakdowns, cracked windshields and related equipment problems.

Southwest has a leading online presence. As of mid-2017, they had more than 5.3 million Facebook fans (more than double any other airline), 2.1 million Twitter followers (tied with JetBlue) and more than 320,000 Instagram followers (4th largest airline). Their official YouTube channel has 24,000 subscribers, features more than 570 videos and has been viewed more than 7.8 million times.

Can Southwest afford to fly bags for free when all of their competitors charge fees for this service?

How can Southwest continue to differentiate itself from their competitors?l