Competitive Advantage

Southwest Airline Company started in 1971 and is based in the United States. It had a labor force of 195. At this time, its competitor was Continental Airlines, which employed every dirty trick possible to ensure that Southwest did not pick up well. For instance, Continental used a political trick when it used the then speaker of the House, James Wright make amendments on air transport routes. The amendment was deliberately meant to make logistics of the airline routes where Southwest flew difficult but instead encourage the traffic where Continental flew. This trick did not succeed and it motivated the spirit of competing and winning at the Southwest Airlines to date. Since then Southwest Airlines believes that its competitive advantage lies on its personnel and how they are managed but not on pricing or any other thing. The 2010 revenues for Southwest Airlines were $10,351 million (Southwest Airlines Co, 2010).

How the company has developed competitive advantage through its Human Resource.

Southwest has been able to stay on top of the business and maintain a competitive advantage by putting emphasis in various areas:

Salaries or Rewards:

Employees earn lower salaries than the company’s competititors and work for longer periods. Pilots and flight attendants are paid per trip meaning that the more the trips one makes the higher the earning. Flight attendants are the second highest earning personnel in the company. Those who have managerial positions earn more. According to Air Line Employees Association 2008, the salary of the Chief Executive Officer (CEO) is one of the lowest compared to other executive officers in Dallas. The employees own 12% of the Southwest’s total stock share. However, Southwest Airlines give collective rewards such as sharing profits and ownership of stock by the employees. This has been facilitated by the discounted stock purchase program offer given by the company to its employees thus enabling 86% to 92% of its employees own stock. Southwest Airline gives benefits of the standard run of the mill common to other businesses (Bruun, 2001). These comprise of dental, vision, medical and health coverage. Additional benefits include dependent care spending accounts, long-term care disability insurance cover, time off, and a retirement saving plan of (401k). The unique benefit is free available flying privileges.


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