AirTran Airways acquisition
An AirTran Airways Boeing 737–700 taxiing at Portland Jetport Southwest Airlines first announced the acquisition on September 27, 2010 and received final approval from the United States Department of Justice on April 27, 2011. On May 2, 2011, Southwest Airlines completed the acquisition of AirTran Airways by purchasing all of the outstanding common stock, corporate identity and operating assets of AirTran Holdings, Inc., the former parent company of AirTran Airways. Southwest Airlines estimates the transaction's value at $3.2 billion and expects onetime costs to integrate the two airlines of $500 million, with cost synergies of approximately $400 million annually. The greatest impact on Southwest was the elimination of a direct low-cost competitor, access to Atlanta, international service and the addition of landing slots at New York-LaGuardia Airport and Washington-Reagan Airport. Southwest obtained a single operating certificate (SOC) from the United States Federal Aviation Administration on March 1, 2012, but expects that full integration of AirTran into Southwest's operations to continue until 2014.
An entity called Guadeloupe Holdings was formed by Southwest and currently acts as a wholly owned subsidiary of Southwest Airlines and holding company for AirTran's current operations and assets. Southwest's organized labor groups have ceded contractual "scope" provisions pending acceptable negotiated seniority integration agreements. Southwest is transition aircraft, routes and employees from AirTran to Southwest on a one-by-one basis until all parts of AirTran have transitioned to Southwest.
The purchase adds 25 additional destinations previously not served by Southwest including cities in Mexico, the Caribbean and Atlanta, Georgia, an AirTran hub and at the time, the largest U.S. city not served by Southwest. On October 10, 2011, USA Today reported that Southwest will work to no longer bank flights in Atlanta as AirTran did. AirTran 737 aircraft are in the process of being converted to Southwest's livery and evolve interior.
On February 14, 2013, Southwest began codesharing with AirTran. It took the first step on January 26, 2013 by launching shared itineraries in five markets. Southwest continued to launch shared itineraries with 39 more markets beginning February 25, 2013. In April 2013, shared itineraries were expanded to all Southwest and AirTran cities (domestic and international). The airlines intend to be fully integrated by December 29, 2014.
For the tenth year in a row, Fortune magazine recognized Southwest Airlines in its annual survey of corporate reputations. Among all industries in 2004, Fortune has listed Southwest Airlines as number three among America’s Top Ten most admired corporations.
On December 13, 2011, Southwest placed a firm order for 150 Boeing 737 MAX aircraft, becoming the launch customer for the type. First delivery is expected in 2017.
In January 2012, Southwest Airlines expressed interest in serving Mexican and South American destinations out of Hobby. On May 30, 2012 Houston's city council approved Southwest's request for international flights from Hobby. Southwest agreed to invest at least $100 million to cover all costs tied to the Hobby upgrade, which includes designing and building five new gates and a customs facility. Construction at Hobby is expected to take two years, with international flights likely beginning in 2015.
On April 11, 2012, Southwest introduced the 737–800 to the fleet. It seats 175 passengers as compared to the regular 143-seater 737-700. The first 737–800 was called "Warrior One" in salute of the Southwest Employees’ Warrior Spirit.
On May 5, 2014, Southwest announced that it has chosen Amadeus IT Group replace its current domestic reservation system. Southwest already operates its international reservation system with Amadeus. The new domestic reservation system is expected to take a few years before it is implemented. When completed, Southwest will operate one reservation system by Amadeus.
In September of 2014, Southwest introduced new branding, including a new livery and logo.
On October 13, 2014, the Wright Amendment restrictions at Dallas Love Field were repealed and Southwest expanded service at Love Field to include cities outside of the previous location restrictions.
Throughout 2014, Southwest expanded service at Reagan-National in Washington D.C. and LaGuardia Airport in New York City through slot acquisitions from the American Airlines/US Airways merger.
The company has employed humor in its advertising. Slogans include "Love Is Still Our Field", "Just Plane Smart", "The Somebody Else Up There Who Loves You", "You're Now Free To Move About The Country", "THE Low Fare Airline", "Grab your bag, It's On!" and "Welcome Aboard". The airline's current slogan is "If It Matters To You, It Matters To Us".
A Southwest Airlines Boeing 737–700 with blended winglets (N741SA) pictured on the tarmac at Chicago Midway International Airport wearing the airline's original desert gold livery. In March 1992, shortly after Southwest started using the "Just Plane Smart" motto, Stevens Aviation, who had been using "Plane Smart" for their motto, threatened a trademark lawsuit.
Instead of a lawsuit, the CEOs for both companies staged an arm wrestling match. Held at the now demolished Dallas Sportatorium (the famed wrestling facility) and set for two out of three rounds, the loser of each round was to pay $5,000 to the charity of their choice, with the winner gaining the use of the trademarked phrase. A promotional video was created showing the CEOs "training" for the bout (with CEO Herb Kelleher being helped up during a sit up where a cigarette and glass of whiskey (Wild Turkey 101) was waiting) and distributed among the employees and as a video press release along with the video of the match itself. Herb Kelleher lost the match for Southwest, with Stevens Aviation winning the rights to the phrase. Kurt Herwald, CEO of Stevens Aviation, immediately granted the use of "Just Plane Smart" to Southwest Airlines. The net result was both companies having use of the trademark, $15,000 going to charity and good publicity for both companies.
Honor Flight Network
Southwest Airlines is the official commercial airline of the Honor Flight Network. Honor Flights are dedicated to bringing aging and ailing veterans to visit the national monuments in Washington, D.C., devoted to the wars in which they served.
Southwest Airlines headquarters in Dallas The Southwest Airlines headquarters is located on the grounds of Dallas Love Field in the Love Field neighborhood of Dallas, Texas.
On September 17, 2012, Southwest broke ground on a new Training and Operational Support (TOPS) building. The TOPS Building is across the street from its current headquarters building. The property includes a two-story, 100,000-square-foot operations building that could withstand an F3 tornado. It also includes a four-story, 392,000-square-foot office and training facility with two levels devoted to each function. The new facilities will house 24-hour coordination and maintenance operations, customer support and services, and training. BOKA Powell was the project architect. Manhattan Construction is the general contractor. The project is scheduled for completion in late 2013, with occupancy beginning in 2014.
As of December 2014, Southwest Airlines nearly 46,00 employees.
Gary C. Kelly is Chairman, President and CEO of Southwest Airlines. Kelly replaced former CEO Jim Parker on July 15, 2004 and assumed the title of "President" on July 15, 2008, replacing former President Colleen Barrett. In July 2007, Herb Kelleher resigned his position as Chairman. Colleen Barrett left her post on the Board of Directors and as Corporate Secretary in May 2008 and as President in July 2008. Both are still active employees of Southwest Airlines. Kelleher was President and CEO of Southwest from September 1981-June 2001.
In contrast to competitor JetBlue Airways, where only the pilots are unionized, Southwest maintains its profitability and low-fare, low-cost business model while being heavily unionized. The Southwest Airline Pilots' Association, a union not affiliated with the Air Line Pilots Association, represents the airline's pilots. The Aircraft Maintenance Technicians are represented by the Aircraft Mechanics Fraternal Association (AMFA). Customer Service Agents and Reservation Agents are represented by the International Association of Machinists and Aerospace Workers Union (IAM). Flight Dispatchers, Flight Attendants, Ramp agents and Operations agents are represented by the Transport Workers Union (TWU).
Impact on carriers
Southwest has been a major inspiration to other low-cost carriers, and its business model has been repeated many times around the world. The competitive strategy combines high level of employee and aircraft productivity with low unit costs by reducing aircraft turn around time particularly at the gate. Europe's EasyJet and Ryanair are two of the best known airlines to follow Southwest's business strategy in that continent. Other airlines with a business model based on Southwest's system include Canada's WestJet, Malaysia's AirAsia (the first and biggest LCC in Asia), Qantas's Jetstar (although Jetstar now operates three aircraft types), Philippines's Cebu Pacific, Thailand's Nok Air, Mexico's Volaris and Turkey's Pegasus Airlines. Although Southwest has been a major inspiration to many other airlines, including Ryanair, AirAsia and Jetstar, the management strategies, for example, of Ryanair, AirAsia and Jetstar differ significantly from those of Southwest. All these different management strategies can be seen as means of differentiation from other competitors in order to gain competitive advantages.
Lobbying Texas rail
Southwest has fought against the development of a high-speed rail system in Texas.
In 1991 a plan was made to connect the Texas Triangle (Houston – Dallas – San Antonio) with a privately financed high speed train system which would quickly take passengers from one city to the next. This was the same model Southwest Airlines used 20 years earlier to break into the Texas market where it served the same three cities.
Southwest Airlines, with the help of lobbyists, created legal barriers to prohibit the consortium from moving forward and the entire project was eventually scuttled in 1994, when the State of Texas withdrew the franchise.