One big family

posted on 5th June 2018

As David Smith reports, Texas-based Southwest Airlines has been the model for other carriers in the low-cost airline sector for years although it’s quite different in some respects.

The business strategy of America’s most successful airline has been assiduously copied by the likes of Ryanair and EasyJet in Europe, as well as many other airlines all over the world, including Canada’s WestJet, Mexico’s Volaris and Turkey’s Pegasus Airlines.

Not everything about Southwest’s model, however, has crossed the Atlantic to Europe. The trend, for example, among European low-cost carriers is to outsource a lot of ground handling operations in order to save money. But in the US, independent ground handling operations are still a rarity and Southwest still uses almost all its own staff at its 93 locations.

“Under pressure to save money, some of the US carriers are outsourcing more of their operations, but our preference at Southwest is to stay with our own people,” said Anne Naylor, a senior director of ground operations. “This is partly a question of efficiency, but it also fits in with our culture. We are less interested in cost efficiency and more in treating our employees as one big family. It might sound corny, but in reality it really does feel like that at Southwest. We try to impress on our staff that it’s a career and not just a job. We ask everyone to abide by the ‘golden rule’, which means ‘treating others as you wish to be treated’.”

Naylor says that in an era of disgruntled airline staff, the Southwest ground operations teams retain high levels of job satisfaction and tend to stay with the company long-term. She says that the fair and caring mindset permeates everything the company does and is responsible its long-standing commercial success.

Southwest has proved remarkably resilient to the storms sweeping through the airline industry. Since its foundation in 1967, the airline has grown and grown. It now serves 93 destinations in 37 states, operating more than 3,400 flights a day with more than 37,000 employees.

Although full-year profit dropped from US$459 million in 2010 to US$178 million in 2011, those figures were the envy of most other American carriers. The sum was also good enough to maintain Southwest’s record-setting 39-year streak of continuous profitability.

Southwest remains the largest airline in the US in terms of the number of domestic passengers carried and is still expanding its operations. Earlier this year, it bought AirTran Airways, which is now run as a fully owned subsidiary. Technically, the two airlines are one business with a single operating certificate. AirTran serves 63 cities in 30 states with around 790 flights a day. AirTran also serves seven international destinations in the Caribbean and Mexico. It employs around 8,500 workers.

Southwest is also admired by its customers. For example, in a 2006 survey, by the US Department of Transportation, it ranked number one out of all US airlines for the fewest customer complaints, with 0.18 per 100,000 passengers. Southwest continues to receive very few complaints about its service.

The business community respects Southwest’s success. In 2011, Fortune Magazine named it fourth in a list of the world’s most admired companies, citing its continuous profits and excellent relationship with customers. One of the differences between Southwest and many other US airlines, the magazine said, was that it retained its integrity by refusing to tack on hidden fees.

“We value our long-term relationship with passengers more than cutting costs in the short-term,” said Naylor. “With Southwest what you see is what you get. Our website is transparent and there are no hidden costs. Most other US airlines now charge for bags, for example, but we abide by the ‘golden rule’ and we know customers won’t want to pay US$25 or US$50 extra to check in a bag. They can take as many bags as they want which, of course, means more work for our ground handling teams, but it’s actually a great marketing tool for us and helps differentiate us from our competitors.”

Southwest Airlines ramp agent Kijuan Evans radios to the cockpit during one of the company’s first departures from Hartsfield-Jackson Atlanta International Airport on Sunday, February 12, 2012. Stephen M. Keller, Southwest Airlines

Neither does Southwest impose additional fees for items such as seat selection, fuel surcharges, curb side check-in and telephone reservations. This all fits in with the company’s pledge that it is “in the customer service business – it just happens to fly airplanes”.

Other airlines, Naylor believes, are playing a dangerous game with their customers. Although they may save on ground handling fees and maximise profit in the short-term, they are damaging the relationship of trust with the passenger. Such an approach is far less likely to lead to loyal customers, she felt.

The Southwest approach is in stark contrast to the policies of some European carriers, such as Ryanair. The Irish airline has been roundly criticised by the UK’s Office of Fair Trading for “taunting consumers” with “puerile” charges when booking supposedly free flights. The OFT said Ryanair “got away with it” by cleverly operating “outside the spirit of the law, but within the narrow letter of the law”.

Southwest’s ground operations management style fits in with the fair ethos. “We don’t really subscribe to titles as much as expectations,” said Naylor. “As leaders we have to abide by the same goals and strategies, which are shared by employees at all levels. It’s not a loose structure, but it feels like everyone is at the same level even though sometimes someone has to make decisions.”

Southwest’s ground handling teams are given the option of part-time work, but a cut in their hours is never forced upon them. Whereas some European handlers are imposing part-time work to save money, the airline leaves it up to the employees.

“We could save more money by having more part-timers, but we would not end up with so many contented staff,” said Naylor. “But we are finding now that a lot of baggage handlers, and other workers, actually want part-time work – far more than 10 years ago. When they do want it, we try to use that as a way of creating more efficiency in our operations, but it’s their choice.”

Workers’ rights are respected. In contrast to its non-union competitor JetBlue Airways, Southwest’s workers are highly unionised. Below the wing staff belong to the Transportation Workers Union, but disputes with the unions have been rare.

Southwest’s ground handlers are all multi-skilled. This means they can carry out baggage handling, ramp handling, or even provide catering facilities if they are required at smaller airports where there are no catering staff (Southwest offers free in-flight beverages and complimentary snacks on all flights).

Multi-skilling also means that specialist de-icing staff is not required at snowy northern locations in winter. The biggest use of de-icers is at Southwest’s two busiest locations – Chicago Midway, which has 243 daily flights from 35 gates, and Baltimore-Washington, with 252 flights from 26 gates.

“We can still cover the extra requirements by using our full-time staff in winter,” said Naylor. “We tend to just offer more overtime at certain periods of the year. So winter does not really represent a great logistical challenge for Southwest. Except if we get a lot of requests to be transferred to Fort Lauderdale in Florida when it gets cold in the north!” she joked.

Ramp agent Brandon Brown pushes out one of Southwest’s first Boeing 737-800 from Fort Myers, Florida during its first day in service. Stephen M. Keller, Southwest Airlines 2012.

The greatest emphasis is on safety. This translates into better customer service because there are fewer delays and more planes leave on time. It also dramatically cuts operating costs. The average of one accident and nine injuries per 1,000 departures costs US airlines about US$250,000 per incident, or US$10 billion per year.

The key to reducing the number of incidents, Naylor believes, is to enhance communication amongst the ground operations teams. To this end, the airline recently introduced a groundbreaking innovation, which is unique to Southwest.

The Flightcom hands-free wireless aircraft pushback system was brought in at 99 per cent of stations in the first quarter of 2012. The technology increases coordination between the ground support team and the pilot, which reduces the risk of accidents. Wing walkers can speak directly with tractor operators and there is also wireless contact between wing walkers and pilots. Instant voice communication means ground teams are no longer dependent on traditional visual hand signals or wands.

“The crew are ecstatic about the new technology,” said Naylor. “We studied long and hard for several years before introducing it. Five years ago, the technology simply wasn’t advanced enough. But now the wireless apparatus is much more effective and operates at a range of 1,600 feet. The hearing protection is 26dB which is also much better than standard headsets.”

The Flightcom devices have already helped to avert potentially dangerous scenarios. “We’ve had a few incidents in which it has possibly stopped an accident from happening. In one recent incident, for example, a station reported that another airline had cut into the path of the push-back tractor. There could have been a collision, but the marshaller radioed the driver to stop the tractor and the danger was avoided. The system has been so effective that we’re now looking at putting it into our de-icer trucks.”

Naylor says an emphasis on safety has to be the lynchpin of any successful airline operation. “We believe that if the safety and security is there, the whole matrix of costs will fall into place. If we can turn aircraft around on time and safely we will maximise the use of our fleet as well as pleasing our customers. And we pride ourselves on having a great record on turnaround times,” said Naylor. “The emphasis of ground operations has not changed for us since the 2008 financial crisis and the steep rises in the cost of oil. We still emphasise the same things – safety, efficiency and the customer experience. We can’t control the cost of oil but we can control those other factors,” she said.

Ground handling staff is also trained in security procedures. “We test all the ground operations staff and people might say what does a ramp handler need to know about security? But it helps them to understand our global operations and they know 99.9 per cent of the security and safety procedures,” said Naylor.

“It’s all part of our emphasis on being a small family team even as the operation grows. We don’t want to lose the feeling at Southwest of being like a smaller company. That’s what drives us to meet the demands of the operation and integrate the customer’s wishes with the wellbeing of our workers. We are continually asking what our customers want externally and what our staff need internally.”