Case 2

“SOUTHWEST AIRLINES”

Leader: Regino, Christine May

Members: Casiano, Lyca Ann Marie (100)

Esmabe, Ma. Danica (100)

Manzano, Prince Jefferson (100)

Neyra, Amhir (100)

Velasquez, Vhinn (100)

EACH MEMBER CONTRIBUTIONS WAS ALREADY UPLOADED IN GDRIVE…

Google Drive: https://drive.google.com/folderview?id=15P83cPMeubPNeO01Mb4NPz1S-ny2A0Mp

One night over dinner early in 1967 in San Antonio, Rollin King presented his idea for a

new airline to Herb Kelleher by drawing a triangle on a napkin and labeling the three

corners as Dallas, Houston, and San Antonio. King's idea was to offer reasonably priced

nonstop service between the three cities; and as a result, Southwest Airlines was created.

Out of this initial meeting, Southwest Airlines was incorporated in Texas on March 15,

1967. Commercial service commenced on June 18, 1971, with three Boeing 737 aircraft

serving three Texas cities—Houston, Dallas, and San Antonio. Southwest Airlines grew

rapidly; and on January of 1974, they carried their one-millionth customer. In the next

couple of years, several new jets and destinations were added including five new cities

in 1977 alone. By mid 1988, Southwest had expanded its service to offer almost 900 flights

each day across its route system covering 27 cities in 13 states; and by 1989, revenue had

exceeded the billion-dollar mark. Southwest won its first Triple Crown Award, based on

Department of Transportation statistics for the year 1992 ranking first in fewest customer

complaints, best on-time performance, and best baggage handling.

In 1993, Southwest was named one of the top ten best companies to work for in

America—recognized for job security, opportunities, youngest companies, strongly

unionized, and where fun is a way of life. In 1994, Southwest became the first major

airline to offer ticketless travel; and in 1996, it became the first major airline to post a

website with the launch of their “Home Gate” site. In 1997, the airline ranked first on

Fortune magazine's “100 Best Companies to Work For in America” list.

in May 2003. In 2011, AirTran Airways became a wholly owned subsidiary of Southwest

Airlines.

In 2013, Southwest launched the first Southwest service to a destination outside the 48

contiguous states with service to San Juan, Puerto Rico. In July 2014, Southwest began its

first international flights to Nassau, Bahamas; Montego Bay, Jamaica; and Aruba. Later

in the year, Southwest continued its international launch with service to Mexico and the

Dominican Republic. In 2015, Southwest's international service grew to seven countries

with new service to San Jose, Costa Rica, Puerto Vallarta, Mexico, and Belize City, Belize.

Presently in its 44th year of service, Southwest Airlines (NYSE: LUV) continues to

differentiate itself from other air carriers with exemplary customer service delivered by

more than 47,000 employees to more than 100 million customers annually. Southwest

operates more than 3,600 flights a day, serving 94 destinations across the United States

and six additional countries. The mission of Southwest Airlines is “dedication to the

highest quality of customer service delivered with a sense of warmth, friendliness,

individual pride, and company spirit”.

1. Suppose you have been asked to write a report for Southwest Airlines discussing

and displaying their share of the U.S. airline market. In your research, you are able

to obtain from the Bureau of Transportation Statistics the following information

on the Number of Passengers Carried in a recent year for the top seven U.S.

airlines:

Southwest Airlines — 111,498,509 Delta Air Lines — 109,827,685

United Air Lines — 82,436,921 American Airlines — 80,113,333

US Airways — 52,955,303 ExpressJet Airlines — 30,576,553

JetBlue Airways — 27,836,405

Using at least two of the graphs and/or charts discussed in this chapter, present

your findings on these seven airlines and briefly discuss the results.

2. Information gleaned from budgettravel.com and SITA (Specialist in Air Transport

and IT Communications) indicates that there are at least five reasons that air

passengers' luggage is lost. These include: 1.) The routing label is damaged or lost,

2.) Lost during transfer from one plane to another, 3.) The wrong destination code

is typed at ticketing, 4.) The luggage is loaded into the wrong plane to begin with,

and 5.) The passenger forgets to pick up their luggage at the destination. Suppose

a study of 500 pieces of lost luggage is undertaken in which researchers are

98 of the pieces were lost due to a lost or damaged routing label, 255 were lost

during transfer from one plane to another, 71 were lost due to the wrong

destination code being typed at ticketing, 52 were lost because they were loaded

into the wrong plane, and 24 were lost because the passenger failed to pick up

their luggage at the destination. Use a Pareto Chart to analyze the results of this

study. Based on your chart, what would you recommend as a way to attack the

lost luggage problem?

3. Shown here are two scatter plots of data on U.S. airlines reported in a recent year

by bga-aeroweb.com. The first scatter plot displays the number of passengers

carried annually by the top nine airlines and the number of seats per aircraft for

each airline. The second scatter plot displays the number of passengers carried and

the number of flights by the top nine airlines in a recent year. Study the two scatter

plots and comment on any insights you glean regarding the airline industry.
ANSWER FOR DISCUSSION NO.1

Throughout my research on the information provided to me regarding the number of

passengers carried in the last year and the general dispersion of market share of the top

seven airlines, I was able to come to various conclusions. The first shown in the figure

below shows that Southwest Airlines carried the most numbers of passengers in a recent

year, followed very closely by Delta Airlines.1

Number of Passengers Carried in a Recent Year

120, 000, 000

100, 000, 000

80, 000, 000

60, 000, 000

40, 000, 000

20, 000, 000

0 Southwest Airlines Delta Air Lines United Airlines American Airlines US Airways Express Jet Airlines Jet Blue Airways

Figure 1: Number of Passengers Carried in a Recent Year by the Top Seven Airlines

The Bar Chart above shows that Southwest Airlines barely edges out Delta Air lines, and

the difference is barely there. The next two airlines follow distantly behind with almost

30,000 passengers less carried in a recent year. Because the last three of the top seven
airlines carry less than 60,000 passengers, these airlines have significantly less market

share than Southwest and Delta Airlines

Below is a pie chart with the market share divided between the top seven airlines based

on the numbers provided. There are likely more airlines and passengers, but this is only

measuring the information provided to myself and the sum of all passengers from these

airlines.

Figure 2: Market Share Breakdown of the Top Seven Airlines

As you can see, Southwest Airlines takes up roughly 22% of the market share for the

information provided to me (The graph does round numbers up or down, so this chart is

not exact, but I will provide the sheets in Excel to more accurately show the appropriate
market share for each airline). That means that almost ¼ of all passengers that were

carried were carried by Southwest Airlines. However, Delta Air Lines has the same

percentage of market share, so there should be some concerns that Southwest Airlines

should be aware of. Delta Air Lines is pretty much neck and neck with Southwest and is

by all means the biggest competitor. It also means that between Delta and Southwest,

almost half of all passengers carried in this case were carried by one of these two airlines.

With that being said, United and American Air Lines are not too far behind both Delta

and Southwest, and while it would take some future research and more data sets, this

could also be a worrying trend if these two smaller airlines take up more market share as

years go on. In Conclusion, it looks like Southwest is a major player in the airline industry,

and a lot of passengers are carried by the organization. However, almost just as many

passengers are also carried through Delta Air Lines, so it is something Southwest should

be on the lookout for. Finally, it is important not to ignore the smaller airlines, since these

could always pick up market share in the future or merge with other smaller airlines to

combine their market shares and make more competition for Southwest and Delta.
ANSWER FOR DISCUSSION NO. 2

As you can see in the pareto chart titled "Luggage Lost" below, the blue bar represents

the total number of luggage lost in every particular reason. While the green line

represents the total cumulative percentage of luggage lost throughout the year.

You can see the following in the chart below; The total luggage lost, the total cumulative

percentage that gives us the data every year and also the reasons in every luggage lost.

In order to get the cumulative percentage, you need to get the total percentage first which

you can see in the second column. According to the given data, you can see that more

than a half of luggage is lost during transfer from one place to another. While on the other

hand, luggage that are lost or damaged in routing level, loaded into the wrong plane, and

forgotten to pick up by passengers is less than 40% of the cumulative percentage.

Base on the graph, more than a half of the luggage was lost during transferring them from

one place to another. My recommendation for those passengers that experiences luggage

lost is that should always keep their belongings where they can maintain its security, put

it nearby where they can keep a close watch. According to graph, the major luggage lost

was during the process of transferring them from one place to another. With this regard,

it gives us the speculation that it was taken by someone else. Whatever the case is,

whether it got lost or taken by someone else, they should first go in the lost and found

station to provide more assistance for the retrieval of the luggage. Moreover, to further

secure the luggage the passengers should always check their luggage code. Check your

luggage if it was loaded on the right plane and double check if you typed the correct

destination for your luggage. Lastly, they should always pay attention to their

belongings. These recommendations can help the passengers to prevent luggage lost and

also if a passenger found someone else's belongings, please take it over the lost and found

station. Keep safe everyone and have nice trip.

As we can see at the 1st graph below that, the number of passengers is almost as high with

the seats per aircraft, On the first scatter plot it’s visual is quite off for a definition of

scatter plot graph, it’s very indecisive and confusing because of its many outliers, but if

you look closer you can see that this is a positive scatter plot due to rises from 28000000

to 80000000. The form of the first scatterplot is non-linear because it has messy plots and

it does not follow a straight line rather it makes a curve line. When it comes to its strength

the first graph is weak and the reason for this is that each of its plots are mostly far from

each other and it has many outliers making it hollow.

1st Graph

And for the second scatter plot is about the passenger’s vs number of flights, we can see

in the second scatterplot how many passengers boarded and the number of flights by the

top nine airlines in a recent year. the number of maximum passengers in a year is in the
1000000-1100000 range and the maximum number of flights is 100000000-11000000 at first

it was very confusing but when you look closely you can see how many passengers

aboard the top nine airlines in a year and as the number of passengers increases, so does

the number of flights. The type of the second scatter plot is a positive correlation as the

passenger increases so does the flight.

2nd Graph