Wharton MBA for Executives

In business school, it seems like many of the cases involved Southwest Airlines, Toyota (their production system, kaizen, etc.), WalMart, and a other companies.

We studied Southwest Airlines a few weeks ago and discussed their various strategic advantages. These include point to point (instead of hub and spoke), faster turnaround at the gates, no assigned seating, no food, teamwork, etc. The key is faster turnaround at the gates because the more time that the plane is in the air, the more money the company makes. I’m not exactly sure how safe it is for a plane to flight all day long like that but other than some minor safety violations, they seem fairly safe. In the international market, I believe that airlines are required to let their airplanes rest for a bit before long hauls (you can’t just make a plane fly back and forth from LA to Singapore all day every day).

My first Southwest Airlines flight was in 1991 when I was in college going from Oakland to Los Angeles. I paid $19 for that flight. A taxi to the airport would have cost more than that. Greyhouse, Amtrack, etc. were all more than that. Heck, gas would have cost more than that if I drove.

I fly Southwest for school every other week so I’ve become very comfortable with Southwest. I am familiar with all of their policies and I know all of the little games that I can play. For example:

1) I’m on the A-List so I always get a good A number for boarding but before that I always made sure to check in online early to get my boarding pass.

2) If I have a late B number and I want to have a Southwest First Class seat (a window or aisle with nobody in the middle), I walk towards the middle of the plane and grab a window/aisle where the other window/aisle is being used by an extremely heavy set person. Most people go to the back instead of middle to get overhead bin space. Most people will skip our middle seat because of the inconvenience caused by my new heavy set friend.

3) If I have a late B number and there are no more window/aisle seats left, I play “unite the couple.” I look for an obvious couple who is sitting window/aisle and ask to sit in their middle. One person usually slides over to the middle so that I can get the window or aisle seat.

4) I always drink Cranberry Apple juice. But sometimes if I feel like it, I will have a Monster energy drink.

5) The honey roasted peanuts are tasty.

6) Southwest does not charge for change fees so I book a bunch of flights, use the one I need, and book more flights with the credit with the flights I didn’t use. For school I book the 4:30 and 6:00 flights. If I can make it to the 4:30, great. If not, I just take the 6:00.

7) Sometimes I’ll book a 5pm flight knowing that chances are low that I’ll actually make it. But with their “flat tire” rule, I know that Southwest will let me go standby for no charge on a later flight (within reason…usually about 2 hours).

8) Sometimes if the 6pm flight is more expensive than the 5pm flight, I’ll just book the 5pm and use the “flat tire” rule to hop onto the 6pm flight. Of course you want to make sure that the 6pm isn’t going to be full flight (but there are ways to know that too).

9) I’ll use my free flights (after 8 round trips) to go somewhere really far to maximize their value. Southwest flies to such far out and exotic places as New York, Orlando, Chicago, Boston (via Providence), Washington DC (via Baltimore), etc.

10) Or sometimes I’ll decide to stay up in SF after class over Saturday night and leave the next day. Rather than paying full fare, I’ll just use one of my free tickets to fly back home.

However, this past weekend, I flew Northwest. Everything seemed so ancient. My riding companion and I didn’t even have seats until we got to the gate because the flight was sold out full. They gave us seats but we weren’t together. We had to board late because they were boarding from the rear of the aircraft first. When we finally got onboard I was able to talk my way with my seat neighbors to shuffle seats so that I could sit next to my riding companion.

There were drinks and biscotti but they were selling chips, sandwiches, salads, etc. for cash so there was dirty cash and dollar bills being exchanged (Southwest is all cashless so it’s credit card or drink coupons only).

The seats on the airplane were small, narrow, hard, and uncomfortable. The flight crew gave their instruction in a slow, draw out, and bored manner (Southwest flight attendants are usually cheery and some even practice their standup comedy routines).

I flew Northwest because they were the only nonstop flight to Detroit. I would probably fly them again if I had to but I’m happy going back to Southwest.

RVD.