Although profits were good Kelleher expanded conservatively and held debt down.
By 1993, Southwest had spread to 34 cities in 15 states with 141 planes and each made 11 trips per day. It used only fuel-thrifty 737's and concentrated on flying large numbers of passengers on high frequency, one-hour hops at bargain fares. Southwest shunned the hub-and-spoke systems of its larger rivals and took its passengers directly from city to city, often to smaller satellite airfields rather than congested major metropolitan fields. With rock-bottom prices and no amenities, it quickly dominated most new markets it entered.
Key Issues.
A.Strengths.
* Cities from all parts of the country are petitioning for Southwest's services.
* Short point-to-point flights.
* Competes with car, bus and train as much as it competes with other airlines.
* Average flight is 65 minutes.
* Lowest costs in the industry à cost per passenger mile.
* Handles its own ticketing.
* Flies to smaller airports.
* No meals.
* One airplane (737).
* Quick turnarounds mean large number of departures day.
* Employee loyalty.
2.
B.Weaknesses.
*Even with a slow-growth strategy, Southwest has encountered problems maintaining its quality control. From 1992 through 1998, Southwest had the best on-time record of any airline with its flights arriving at their destinations on schedule 81 percent to 82 percent of the time, according to federal figures. But in 1999, Southwest dropped to second place, behind TWA, as 80 percent of its flights arrived on time. Last year, it dropped to fifth place, with a rate of 75.2 percent.
*Southwest blames the delays on the overall increase in airport congestion, which makes it more difficult for all airlines to get flights out on time, especially during bad weather.
*To further challenge Southwest, United also created a shuttle-type operation out of San Francisco -- called United Shuttle -- to compete on Southwest routes out of San Francisco.