Tuesday, May 20, 2008

Less is more - The Boston Globe had an article today about how people are fed up with airlines. Somewhat surprisingly, the airline with the highest marks - by far - is low-cost leader Southwest, #1 in passenger satisfaction for 15 years running.

I read in one of my operations management textbooks, in the "lean manufacturing" section, that the reason Southwest performs so well is that it uses exactly one kind of plane: the Boeing 737. By standardizing to one kind of plane, Southwest minimizes the cost of maintenance, parts, staff, and operation.

6 comments:

Anonymous said...

That's only a component. They also try to keep aircraft in the air as much as possible by minimizing turn around time on the ground, improving fleet utilization. Historically, they also fly shorter routes, so fuel costs are less per mile as you burn less fuel to carry fuel for longer trips. Currently, they have been increasing trip length, but they wisely bought fuel hedges and have been turning a significant profit due sale of those hedges.

Another thing they do is pay employees well but maximize use of their time (flight attendents clean up the plane during turn around). They also are very choosy about their employees. So despite having a highly unionized workforce, they don't get stuck with crappy productivity sapping work rules and they maintain a highly motivated workforce.

Eric said...

What I thought was remarkable was that Southwest had a customer satisfaction rating of 79 (out of 100) and the next closes was American Airlines at 62.

You would think after 15 years of getting creamed by Southwest, the other airlines would follow suit.

Brian said...

C'mon Eric, the others complain about unfair competition and cry for government bailouts. I only fly Southwest unless I absolutely must fly someone else, i.e. if I need a red-eye to Philly.

Padre Steve said...

It is amazing that other airlines don't imitate this success. You would think they would want to copy what works! Give the people what they want! God bless! Padre Steve

BigFire said...

While they only use 1 model of plane, 767, their fleet spans almost the entire spectrum of 767 variants, at least one variant was heavily influenced by Southwest's need.

Anonymous said...

It's a 737 they use, not the 767, which is a much larger aircraft. But you are correct. The 737-800 was essentially designed for SW. It features a few improvements

#1. longer body = more people
#2. Wing canards, which increase lift at lower speeds = more fuel efficient, but limits top speeds. Since airlines no longer fly for time, but fuel efficiency, this is a big plus.

Couldn't agree more with comment #1... fuel hedges, employee options etc all add in. Additionally, they refuel planes using an extremely complicated algorithim e.g. if a plane is heading from Love field to tulsa, then to phoenix, is it cheaper to fill up at Love for the entire trip, haul the fuel, or top off at each hop. It costs money to haul gas around, but the spot market for fuel might be cheap enough in Dallas that it justifies it... Stuff like that.
Don't get to fly it much, but with how shitty the airlines treat people now, I am moving quickly in that direction