From the Kansas City Star:
By JERRY HEASTER Columnist
Date: 10/05/01 23:44
Southwest Airlines' experience since the terrorist attacks is proof that good deeds sometimes do go unpunished.
Southwest distinguished itself not only by keeping all its employees on the payroll, but also by maintaining a full flight schedule. Its reward has been respectable ridership levels and a stock price that has held up remarkably well compared with the damage inflicted on shares of some other carriers. Southwest stock, in fact, is up since the initial hit it took when trading resumed after the terrorist attacks. Moreover, its market capitalization is the industry's largest.
There is a moral to this story of a company that keeps the faith with its employees and its customers and profits in the bargain. Although other airlines chose to dump 100,000 employees as their first response to post-attack troubles, Southwest maintained its tradition of never resorting to layoffs. It also made a $180 million contribution to its employee retirement plan Sept. 14, right on schedule.
As daunting as the industry's challenges are, Chief Financial Officer Gary Kelly was quoted in an Associated Press story Friday as saying, "We're very far from considering layoffs." Kelly also told Reuters this week that bookings have been "very robust" and that for "the last several days, we've actually been ahead of what we would expect bookings to be."
Southwest is winning for two reasons. One is that it's arguably the best-managed airline in the business, and has been for a long time. It's been profitable every year since '73. This is incredible considering the industry as a whole lost $6 billion during a bad patch in the early '90s. Meanwhile, Southwest is expected to be profitable this year and is regarded by some as the only carrier capable of survival without a federal bailout.
The other reason Southwest is winning is that it wins public affection by showing true regard for its stakeholders. The responses to a column last week decrying the industry's layoffs and lauding Southwest underscored why Southwest prospers while its brethren struggle to merely survive.
The feedback was a mix of encomiums for Southwest and horror stories involving its competitors. Regular Southwest customers said they were proud to patronize a company with such an enlightened business philosophy. Other frequent fliers who had avoided Southwest because of its "cattle call" seat assignment policy said they'd now be more willing to fly Southwest.
Two stories stood out. One Southwest regular said her family canceled a scheduled booking because the fear of flying was still too great. Southwest gave them a full credit against any future fares good for a year. A less fortunate patron of another airline described the airline's attempt to cancel his discount and charge full fare because the customer was changing his schedule in response to the airline's schedule changes.
A common defense of layoffs is that it's either dump workers or go bankrupt. Nevertheless, one major bailout beneficiary was revealed to be buying luxury jets to start a tony operation to serve well-heeled fliers even as it was cashing corporate welfare checks.
My bet is that Southwest will still be flying high when some of its employee-dumping, flight-slashing competitors are reorganizing in bankruptcy court. Sometimes the good guys do win.
By JERRY HEASTER Columnist
Date: 10/05/01 23:44
Southwest Airlines' experience since the terrorist attacks is proof that good deeds sometimes do go unpunished.
Southwest distinguished itself not only by keeping all its employees on the payroll, but also by maintaining a full flight schedule. Its reward has been respectable ridership levels and a stock price that has held up remarkably well compared with the damage inflicted on shares of some other carriers. Southwest stock, in fact, is up since the initial hit it took when trading resumed after the terrorist attacks. Moreover, its market capitalization is the industry's largest.
There is a moral to this story of a company that keeps the faith with its employees and its customers and profits in the bargain. Although other airlines chose to dump 100,000 employees as their first response to post-attack troubles, Southwest maintained its tradition of never resorting to layoffs. It also made a $180 million contribution to its employee retirement plan Sept. 14, right on schedule.
As daunting as the industry's challenges are, Chief Financial Officer Gary Kelly was quoted in an Associated Press story Friday as saying, "We're very far from considering layoffs." Kelly also told Reuters this week that bookings have been "very robust" and that for "the last several days, we've actually been ahead of what we would expect bookings to be."
Southwest is winning for two reasons. One is that it's arguably the best-managed airline in the business, and has been for a long time. It's been profitable every year since '73. This is incredible considering the industry as a whole lost $6 billion during a bad patch in the early '90s. Meanwhile, Southwest is expected to be profitable this year and is regarded by some as the only carrier capable of survival without a federal bailout.
The other reason Southwest is winning is that it wins public affection by showing true regard for its stakeholders. The responses to a column last week decrying the industry's layoffs and lauding Southwest underscored why Southwest prospers while its brethren struggle to merely survive.
The feedback was a mix of encomiums for Southwest and horror stories involving its competitors. Regular Southwest customers said they were proud to patronize a company with such an enlightened business philosophy. Other frequent fliers who had avoided Southwest because of its "cattle call" seat assignment policy said they'd now be more willing to fly Southwest.
Two stories stood out. One Southwest regular said her family canceled a scheduled booking because the fear of flying was still too great. Southwest gave them a full credit against any future fares good for a year. A less fortunate patron of another airline described the airline's attempt to cancel his discount and charge full fare because the customer was changing his schedule in response to the airline's schedule changes.
A common defense of layoffs is that it's either dump workers or go bankrupt. Nevertheless, one major bailout beneficiary was revealed to be buying luxury jets to start a tony operation to serve well-heeled fliers even as it was cashing corporate welfare checks.
My bet is that Southwest will still be flying high when some of its employee-dumping, flight-slashing competitors are reorganizing in bankruptcy court. Sometimes the good guys do win.
