Abstract
Southwest Airlines is a somewhat different example of a business model pioneer—and indeed, one may ask if the company is a pioneer at all: neither was Southwest the first to offer intrastate flights on its home market, Texas, nor was it the first to experiment with low-cost flights. But while the other companies were merely experimenting, Southwest developed a business model, which proved its sustainability over the course of more than four decades. By starting operations in 1971, Southwest faced from the very beginning harsh competition from incumbent airlines. This inspired the young company to create its very own business model—and unlike its main competitors at the time, the airline remains profitable until today. Winning this race made Southwest a prime example of a pioneer in the low-cost airline industry.
This is a preview of subscription content, log in via an institution to check access.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
References
Allegiant Air. (2015). 2014 annual report. Retrieved November 24, 2014, from phx.corporate-ir.net/External.File?item=UGFyZW50SUQ9NTgyMjkxfENoaWxkSUQ9Mjg4NTkyfFR5cGU9MQ==&t=1.
Allegiant Travel Company. (n. d.). Company profile. Retrieved January 13, 2015, from https://www.allegiantair.com/sites/default/files/pdf-files/AllegiantCompanyProfilewithHistory.pdf.
American Airlines. (n. d.). A global airline. Retrieved November 19, 2014, from http://www.americanairlines.de/intl/de/aboutUs/globalAirline.jsp.
Boguslaski, C., Ito, H., & Lee, D. (2004). Entry patterns in the Southwest Airlines Route System. Review of Industrial Organization, 25, 317–350.
Borcover, A. (1995). Travelling ticketless in the air. Retrieved August 14, 2015, from http://articles.sun-sentinel.com/1995-03-12/travel/9503070528_1_ticketless-system-ticketless-travel-morris-air.
Breyer, S. G. (1982). Regulation and its reform. Cambridge, MA: Harvard University Press.
Bryant, A. (1995, April 14). Company reports; continental is dropping ‘lite’ service. New York Times. Retrieved November 18, 2014, from http://www.nytimes.com/1995/04/14/business/company-reports-continental-is-dropping-lite-service.html.
Buhalis, D. (2004). eAirlines: Strategic and tactical use of ICTs in the airline industry. Information & Management, 41, 805–825.
Bunz, U. K., & Maes, J. D. (1998). Learning excellence: Southwest Airlines’ approach. Managing Service Quality: An International Journal, 8(3), 163–169.
Carey, S. (2014, October 14). Steep learning curve for Southwest Airlines as it flies overseas: New destinations require changes to training, reservation system. The Wall Street Journal. Retrieved July 22, 2015, from http://www.wsj.com/articles/steep-learning-curve-for-southwest-airlines-as-it-flies-overseas-1413326936.
CBS News. (2014). If Spirit Airlines is so unpopular, why are its flights so full? Retrieved October 10, 2015, from http://www.cbsnews.com/news/if-spirit-airlines-is-so-unpopular-why-are-its-flights-so-full/.
Conrady, R., Fichert, F., & Sterzenbach, R. (2013). Luftverkehr: Betriebswirtschaftliches Lehr- und Handbuch. München: Oldenbourg Wissenschaftsverlag.
Corkery, M. (2014). Rollin King, Texas pilot who helped start Southwest, dies at 83. Retrieved November 25, 2014, from http://www.nytimes.com/2014/06/28/business/rollin-king-who-helped-start-southwest-airlines-is-dead-at-83.html?_r=1.
Cornes, S., & Berniker, L. (2008). Business model innovation. In D. Pantaleo & N. Pal (Eds.), From strategy to execution—Turning accelerated global change into opportunity (pp. 65–86). Berlin: Springer.
Deal, T., & Kennedy, A. (1984). Corporate cultures: The rites and rituals of corporate life. New York: Perseus.
Delta Airlines. (2014). Stats & facts. Retrieved November 19, 2014, from http://news.delta.com/index.php?s=20306.
Doganis, R. (2002). Flying off course—The economics of international airlines (3rd ed.). New York: Routledge.
Drexler, K. M. (2007). Icons of business: An encyclopedia of mavericks, movers, and shakers. Westport: Greenwood.
Duening, T. N., Hisrich, R. D., & Lechter, M. A. (2010). Technology entrepreneurship: Creating, capturing, and protecting value. Burlington: Academic.
Eckert, R. (2014). Business Model Prototyping—Geschäftsmodellentwicklung im Hyperwettbewerb. Strategische Überlegenheit als Ziel. Wiesbaden: Springer Gabler.
Ganson, B. (2014). Texas takes wing: A century of flight in the lone star state. Austin, TX: University of Texas Press.
Gibson, J. W., & Blackwell, C. W. (1999). Flying high with Herb Kelleher: A profile of charismatic leadership. Journal of Leadership & Organizational Studies, 6(3/4), 120–137.
Gillen, D. (2006). Airline business models and networks: Regulation, competition and evolution in aviation markets. Review of Network Economics, 5(4), 366–385.
Gittell, J. (2003). The Southwest Airlines way—Using the power of relationships to achieve high performance. Summaries.Com. Retrieved November 27, 2014, from http://www.theclci.com/resources/thesouthwestairlinesway.pdf.
Hall, A. (2007). Southwest Airlines: The role of human resources in implementing business strategy and hiring practices. Bullard, TX: Capella University.
Hawkins, O., Misra, R., & Tang, H. (2012). Southwest Airlines Co. Griffin Consulting Group. Retrieved November 16, 2014, from http://economics-files.pomona.edu/jlikens/SeniorSeminars/Likens2012/reports/Southwest.pdf.
Heskett, J. L., & Sasser, W. E. (2013, January). Southwest Airlines: In a different world. Harvard Business School Case. Case No. 9-910-419. Retrieved November 19, 2014, from http://www.eduventures.com/wp-content/uploads/2013/06/HBS-Case-Southwest-Airlines-In-a-Different-World-CASE.pdf.
Hitt, M., Ireland, D. R., & Hoskisson, R. (2013). Strategic management: Concepts and cases: Competitiveness and globalization (11th ed.). Stanford, CA: Cengage Learning.
Hoffer Gittel, J., von Nordenflycht, A., Kochan, T. A., Bamber, G. J., & McKersie, R. B. (2015). Labor relations and human resources management in the airline industry. In D. Belobaba, A. Odoni, & C. Barnhart (Eds.), The global airline industry (pp. 287–326). Chichester: Wiley.
Jackson, S. E., Schuler, R. S., & Werner, S. (2011). Managing human resources (11th ed.). Mason, OH: South-Western Cengage Learning.
JetBlue. (2015). 2014 annual report. Retrieved October 10, 2015, from http://investor.jetblue.com/~/media/Files/J/Jetblue-IR/Annual%20Reports/2014-ar-10-k.pdf.
Jordan, W. A. (1988). Problems stemming from airline mergers and acquisitions. Transportation Journal, 27(4), 9–30.
Keidel, R. W. (2010). The geometry of strategy: Concepts for strategic management. New York: Routledge.
Kippenberger, T. (1998). Southwest Airlines: Redefining relationships with customers. The Antidote, 3(5), 38–39.
Knorr, A. (2007). Southwest Airlines: The low cost pioneer at 35. In S. Groß & A. Schröder (Eds.), Handbook of low cost airlines. Strategies, business processes and market environment (pp. 77–92). Berlin: Erich Schmidt.
Lauer, C. (2010). Southwest Airlines (5th ed.). Santa Barbara, CA: Greenwood.
Lehrer, H. R. (2000). U.S. Air Carrier after World War II. In T. Brady (Ed.), The American aviation experience: A history (pp. 218–237). Carbondale, IL: Southern Illinois University Press.
Lehman, W. (n. d.). US airways: A heritage story. Retrieved November 24, 2014, from http://www.usairways.com/en-US/aboutus/pressroom/history/psa.html.
Meehan, M. (2001, January 1). Develop your web content strategy. Computerworld—IT Agenda 2001, 35(1), 20.
Mikhalkina, T. (2014). Netflix business model. London: Cass Business School.
Morrison, S., & Winston, C. (1995). The evolution of the airline industry. Washington, DC: Brookings Institute.
Muduli, A., & Kaura, V. (2011). Southwest Airlines success: A case study analysis. BVIMR Management Edge, 4(2), 115–118.
Mutzabaugh, B. (2014, February). Southwest announces 15 long routes from Dallas Love Field. USA Today. Retrieved November 19, 2014, from http://www.usatoday.com/story/todayinthesky/2014/02/03/southwest-announces-15-long-routes-from-dallas-love-field/5179781/.
Noack, T. (n. d.). Air California fleet details and history. Retrieved November 19, 2014, from http://www.planespotters.net/Airline/Air-California.
Nykiel, R. A. (2007). Handbook of marketing research methodologies for hospitality and tourism. Binghamton, NY: Haworth Hospitality & Tourism Press.
Osterwalder, A., & Pigneur, Y. (2010). Business model generation—A handbook of visionaries, game changers and challengers. Hoboken, NJ: Wiley.
Petzinger, T., Jr. (1996). Hard landing: The epic contest for power and profits that plunged the airlines into chaos. New York: Three Rivers Press.
Platt, H. D. (1985). Why companies fail: Strategies for detecting, avoiding, and profiting from bankruptcy. Washington, DC: Beard Books.
Porter, M. E. (1996). What is strategy? Harvard Business Review, November–December:61–78.
Raynor, M. E. (2011). Disruptive innovation: The Southwest Airlines case revisited. Strategy & Leadership, 39(4), 31–34.
Smithsonian National Air and Space Museum. (2007). Air travel in a changing America. Retrieved November 29, 2014, from https://airandspace.si.edu/exhibitions/america-by-air/online/jetage/jetage04.cfm.
Southwest Airlines Co. (2004). Southwest Airlines Co. 2003 annual report. Retrieved November 19, 2014, from http://southwest.investorroom.com/download/2003+Annual+Report.pdf.
Southwest Airlines Co. (2008). Southwest Airlines Co. annual report 2007. Retrieved November 19, 2014, from http://southwest.investorroom.com/download/2007+Annual+Report.pdf.
Southwest Airlines Co. (2010). Southwest Airlines Co. 2009 annual report to shareholders. Retrieved November 19, 2014, from http://southwest.investorroom.com/download/2009+Annual+Report.pdf.
Southwest Airlines Co. (2011). Southwest Airlines closes acquisition of AirTran Holdings, Inc.. Retrieved August 14, 2015, from http://www.swamedia.com/releases/Southwest-Airlines-Closes-Acquisition-of-AirTran-Holdings-Inc?mode=print.
Southwest Airlines Co. (2014a). Southwest Airlines Co. 2013 annual report to shareholders. Retrieved November 14, 2014, from http://southwest.investorroom.com/download/2013+Annual+Report.pdf.
Southwest Airlines Co. (2014b). These fees don’t fly with us. Retrieved November 14, 2014, from http://www.southwest.com/html/air/no-fees.html.
Southwest Airlines Co. (2014c). Bags Fly Free®. Retrieved November 14, 2014, from http://www.southwest.com/html/air/bags-fly-free.html.
Southwest Airlines Co. (2015a). Herbert D. Kelleher. Retrieved January 24, 2015, from http://www.swamedia.com/channels/Officer-Biographies/pages/herb_kelleher.
Southwest Airlines Co. (2015b). Checked baggage. Retrieved July 22, 2015, from https://www.southwest.com/html/customer-service/baggage/checked-bags-pol.html.
Southwest Airlines Co. (2015c). 1966 to 1971. Retrieved August 13, 2015, from http://swamedia.com/channels/By-Date/pages/1966-to-1971.
Southwest Airlines Co. (2015d). 1972 to 1978. Retrieved August 13, 2015, from http://swamedia.com/channels/By-Date/pages/1972-to-1978.
Southwest Airlines Co. (2015e). 1979 to 1981. Retrieved August 13, 2015, from http://swamedia.com/channels/By-Date/pages/1979-to-1981.
Southwest Airlines Co. (2015f). 2011 to present. Retrieved August 13, 2015, from http://swamedia.com/channels/By-Date/pages/2011-to-present.
Southwest Airlines Co. (2015g). Major initiatives. Retrieved August 14, 2015, from http://swamedia.com/channels/By-Category/pages/major-initiatives.
Southwest Airlines Co. (2015h). Southwest corporate fact sheet. Retrieved October 10, 2015, from http://swamedia.com/channels/Corporate-Fact-Sheet/pages/corporate-fact-sheet#dailydepartures.
Southwest Airlines Co. (2015i). Southwest Airlines enters the international long-haul market. Retrieved August 1, 2015, from http://www.eturbonews.com/print/56264.
Spirit Airlines. (2015). Form 10-K. Retrieved October 10, 2015, from http://files.shareholder.com/downloads/ABEA-5PAQQ9/839809684x0x818446/85F2240B-211D-46BD-B789-37B88FB5935E/Spirit_10K.pdf.
Statista. (2015a). Größte Airlines weltweit im Jahr 2014 nach Umsatz (in Milliarden US-Dollar). Retrieved August 13, 2015, from http://de.statista.com/statistik/daten/studie/3151/umfrage/die-groessten-airlines-weltweit-nach-umsatz-in-milliarden-euro/.
Statista. (2015b). Größte US-Fluggesellschaften im Jahr 2014 nach Umsatz (in Milliarden US-Dollar). Retrieved August 13, 2015, from http://de.statista.com/statistik/daten/studie/244597/umfrage/umsatz-der-groessten-us-fluggesellschaften/.
Statista. (2015c). Top 100 Airlines weltweit nach der Anzahl der Passagiere im Jahr 2014 (in Millionen). Retrieved August 13, 2015, from http://de.statista.com/statistik/daten/studie/162992/umfrage/top-10-fluglinien-weltweit-nach-der-anzahl-der-passagiere/.
Statista. (2015d). Form 10-K. Retrieved August 13, 2015, from http://de.statista.com/download/MTQzOTQ2NTQwNyMjNTY3MDQjIzI4MDQ3IyMxIyNudWxsIyNTdHVkeQ==
Swelbar, W. S., & Belobaba, P. P. (2014). An introduction to the airline data project. MIT International Center for Air Transportation. Retrieved December 2, 2014, from http://web.mit.edu/airlinedata/www/2013%2012%20Month%20Documents/ADP_introduction.pdf.
Swelbar, W. S., & Belobaba, P. P. (n. d.). Glossary. Retrieved December 2, 2014, from http://web.mit.edu/airlinedata/www/Res_Glossary.html.
Teece, D. J. (2010). Business models, business strategy and innovation. Long Range Planning, 43, 172–194.
Virgin America. (2015). Virgin America reports fourth quarter and full year 2014 earnings. Retrieved October 10, 2015, from https://www.virginamerica.com/cms/about-our-airline/press/2015/virgin-america-reports-fourth-quarter-and-full-year-2014-earnings.
Virgin America. (n. d.). About Virgin America. Retrieved January 13, 2015, from https://www.virginamerica.com/cms/about-our-airline/corporate-facts.
Watts, B. (2013). The Girard/Pucci years. Retrieved August 10, 2015, from http://www.braniffpages.com/1965/1965.html.
Welles, E. O. (1992). Captain Marvel. Retrieved January 12, 2015, from https://assurantcorp.com/inc/eexcel/resources/e.excel_ia_case_captmarvel.pdf.
Wells, P. E. (2013). Business models for sustainability. Cheltenham: Edward Elgar.
Wu, C. L., & Caves, R. E. (2007). Modelling and optimization of aircraft turnaround time at an airport. Transportation Planning and Technology, 27(1), 47–66.
Author information
Authors and Affiliations
Rights and permissions
Copyright information
© 2017 Springer International Publishing Switzerland
About this chapter
Cite this chapter
Voigt, KI., Buliga, O., Michl, K. (2017). Pioneer in the Skies: The Case of Southwest Airlines. In: Business Model Pioneers. Management for Professionals. Springer, Cham. https://doi.org/10.1007/978-3-319-38845-8_14
Download citation
DOI: https://doi.org/10.1007/978-3-319-38845-8_14
Published:
Publisher Name: Springer, Cham
Print ISBN: 978-3-319-38844-1
Online ISBN: 978-3-319-38845-8
eBook Packages: Business and ManagementBusiness and Management (R0)