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COMPANY BACKGROUND: Southwest began as an intrastate airline, filling a niche need for travelers between three major Texas cities in the early 1970s. Since then, it has gradually expanded its routes to cover major cities in about 35 U.S. states. Herb Kelleher played an important part in establishing its playful cultural culture; his successors have been less successful in leading the airline through rough economic times and tough labor negotiations as the airline has grown.
SWOT ANALYSIS: Strengths: Southwest emphasizes hiring and retaining a particular kind of employee, aiming to "hire for attitude and train for skills" (Damaraju, 2010, p. 196). Cost consciousness is another strength; fiscal conservatism has always been important, positioning the company to weather economic downturns more effectively than some competitors. Southwest's greatest strengths are the same ones that have always distinguished them: the way they treat people (employees and customers alike) and the way they watch every penny. Jackson and Jackson (2009) write, "Known as the most efficient airline in the industry, Southwest Airlines continues to grow in spite of troubling times" (p. 68).
Weaknesses: As the company has grown, maintaining personal relationships with employees has become harder. This in turn has endangered Southwest's ability to keep labor costs down.
Opportunities: Southwest is now the only major airline that does not charge for the first two checked bags. This fact alone is an exploitable feature. As competitors are coming to rely on extra charges of all kinds in order to turn a profit (Mayerowitz, 2011, p. 1), Southwest's reputation for caring about passengers and employees strengthens its market position.
Threats: Labor issues remain a significant threat, and the shifts in Southwest's leadership as the comp
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