Published in January 2015 issue
By Austin Speaker
Located adjacent to Dallas Love Field (DAL/KDAL) is the headquarters of the nation’s fourth largest airline, Southwest Airlines (WN/SWA), which employs nearly 45,000 people that transport 133.2 million passengers annually (in 2013) on more than 3,600 daily flights to 96 destinations in 6 countries. It is a massive operation, and it requires the careful choreography of a number of departments to create what should be a seamless travel experience.
Southwest invited Airways to be a part of the festivities surrounding the unveiling of a new brand identity (though not a re-branding, as the executives took pains to insist). As the airline takes bold steps to ensure a cohesive corporate culture and identity following the imminent completion of the AirTran merger, this new livery should—the company hopes— provide a new image of a modern and sophisticated airline without sacrificing the egalitarian attitude for which it is known and (usually) loved. For this very reason, the new “Heart” livery features a new logo that, over, over time, is intended to stand alone as an icon of the company, much like the Apple logo.
The new brand is bold—new, deeper colors, larger text, and the heart on the underside of the aircraft all testify to Southwest’s desire to maintain a relevant and friendly Brand image. As one of its newest television ads touts, “Without a heart, it’s just a machine.” And nowhere is this more important tan at its headquarters in DAL.
As of October 13, 2014, the Wright Amendment that had restricted operations out of the carrier’s home base of Dallas Love Field since 1979 was lifted, allowing Southwest to begin operating flights to 15 new destinations outside of the nine-state area to which its DAL operations had been confined for decades. Perhaps, most importantly, this allows direct flights to Southwest’s other “megastations” (the airline claims to have no hubs), giving passengers greater access to some of the newest international connections, which will still be out of the question directly from DAL, and virtually eliminating the all-too-familiar two-stop itineraries for Dallas travelers.
At the heart of the airline sits its headquarters—a sprawling complex in which decisions are made which affect the airline in the long-term. Company executives are always on the lookout for strategies to make the airline more profitable, and that can come in a wide variety of ways; from fleet planning to supply chain to advertising, it all comes together there. And, for passengers, this is ground zero for all of the innovations that redefine Southwest’s unique onboard experience.
One of the strengths of the newly renovated building is the way in which it allows open channels of communication and ease of workflow. Hallways are lined with semi-open working areas, sporting names and decorations that follow different themes, such as foreign languages and different decades. In fact, the building serves as a sort of museum for the company’s history, with potos and relics of the airline’s past tucked into every corner and covering every wall. One of the so-called “culture centers,” essentially a gathering place and kitchen area, is specifically dedicated to the airline’s history—a timeline wraps around the walls, and the furniture in each alcove reflects the portion of the timeline it houses, including futuristic chairs from the ‘70s and burnt orange paraphernalia from the ‘80s. Yet another culture center is Halloween-themed, resplendent with past costumes worn by executives and a gothic motif. But tying all of these culture centers together is one common feature: the red wing-shaped counter, lest anyone forget that the business at hand is running an airline.
To keep employees engaged and productive, Southwest’s funloving attitude shines through even behind the scenes. From its legendary weekly deck parties for new employees to its whimsically themed culture centers, the headquarters complex embodies the attitude that loving what you do means never working a day in your life. Employee programming keeps the atmosphere upbeat and vibrant, and the marketing street team keeps everyone happy, whether they are working in-house or scouring Dallas to hand out free round-trip tickets to unsuspecting passersby.
The most innovative department represented in the headquarters building is the Listening Center. Inside, nine employees monitor the airline’s progress from a number of different sources, from social media to live news to operational performance data. Their job is to identify problems as soon as they happen and to reach out to customers impacted by operational deficiencies before minor problems spiral out of control into a PR nightmare. If you have ever tweeted to @SouthwestAir or posted to the company’s Facebook page about a problem, this is the team that most likely responded to it, and they are empowered to make a number of decisions on the spot, including reservation changes for those who need it most. And, in order to keep up with the increasing demand for social interaction with customers, the team is growing rapidly. As it stands, nearly all actionable customer complaints are addressed within a matter of minutes.
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TOPS – TRAINING AND OPERATIONAL SUPPORT
Behind the operation sits the Training and Operational Support (TOPS) complex, at the Dallas headquarters campus. Every new Southwest employee, of which there were 1,521 last year, passes through this building, and a select few continue to call it home. And, for one toasty September day, it was home to the Airways crew as well.
The $120 million, 492,000 sq. ft., LEED-certified TOPS building opened in December 2013, and it provided the first centralized training location for all departments. All of Southwest’s employees will stay here for a stint ranging from a few days to several weeks, depending upon the position for which they are training. New training classes start almost every day and some specific classes, like flight attendant training, start every week to keep up with increased demand for crew. Whether the latest hire is new to the industry or is coming in for detox from another airline (yes, they call it detox), it all starts here.
At any one time, there may be as many as 1,000 employees training in the facility. They utilize simulators of virtually every kind, allowing passenger service agents to rehearse every part of the passenger experience, from check-in to boarding and operating a jet bridge. Flight crews have a bit more training tan most to endure, and that is definitely for the best. They go through intensive safety checks that they must pass with flying colors. And, if ever you hear the call bell ring four times on a Southwest flight, you can rest assured that the crew knows how to handle the situation, all thanks to this facility and its 737-300 cabin trainer.
Newly minted Southwest employees leave the TOPS facility full of Warrior Spirit and corporate pride, which may be due, in part, to the on-site Freedom Shop. Sure, there’s a lot of corporate Kool-Aid to be had, but it all lends itself to a customer experience that is as seamless as any in the industry; if employees don’t believe in giving their best, then customers will notice and take their business elsewhere. Southwest has a unique brand and a laid-back attitude (that customers appreciate) that comes without sacrificing the safety and efficiency required to keep it all running smoothly.
NOC – NETWORK OPERATIONS CONTROL
Tucked away at one end of the TOPS building is the Network Operations Control (NOC) center—ground zero for all operational procedures for the airline (including AirTran). This state-of-theart complex came online in May 2014 and it has already become the model for other operational control centers in the industry. The complex is home to a number of divisions, including dispatch, crew scheduling, network operations, and meteorology, all of which work in concert to keep aircraft safely in the air and minimize the impact of irregular operations. All of this is a full-time job— in fact, more than 150 employees divided into three shifts provide operational coverage 24/7. Of that time, aircraft are typically scheduled to be in the air for approximately 20 hours each day, though delays and ferry flights can easily take the schedule round-the-clock.
In order to maintain a constant highefficiency with ergonomics in mind. Lighting is kept at a low level in order to reduce eyestrain from staring at multiple computer monitors for hours at a time, and all of the workstations convert from sitting to standing position in seconds. On top of that, the control center is capable of being selfsufficient for days on end. In the event of a natural disaster, the building is designed to withstand an F-3 tornado and is equipped with a dual generator UPS system to keep operations online without interruption. There are even shower facilities available in the event that the staff would have to remain on-call for extended periods. And, just in case the unthinkable happens, the operation can be moved either to another part of the building or to a backup center in an undisclosed location.
For the airline to operate smoothly, everyone in the NOC needs to be on the same page. In order to facilitate this, all of the department heads come together for two daily meetings, which essentially wake the airline up and put it to bed. Although flights have already begun before the first of these meetings, at 08:30, by this point, the team has some idea of what challenges to expect over the course of the day. Similarly, traffic continues after the evening meeting, but all of the peak operations fall between the two.
In order to keep the delicate workflow moving, Southwest employs a number of innovative tools to provide situational awareness to operations crews on the ground. One of the most important systems is WSI Fusion, which combines weather data from the in-house meteorology team with flight tracking on a single display, with color-coded markers distinguishing aircraft types (of which the combined airline currently operates five). The other system that has improved operational efficiency is Aerobahn, an airport ground tracking system that allows dispatchers to see each aircraft’s location on the ground in real time. This makes it much easier to coordinate gate changes and ground holds from a remote location. It is currently only available for Denver International Airport and Hartsfield-Jackson Atlanta International Airport, but it will eventually be rolled out in all of the major stations. In addition, the airline is tapped into the CCTV cameras at a number of airports, which allow dispatchers to identify problems on the ground and confirm gate occupancy for airports not currently served by Aerobahn.
The NOC is poised to carry Southwest well into the future. According to the airline, it was designed to meet operational needs for at least the next 10 years, which includes international expansion, and the availability of space elsewhere in the building may allow for future growth. There are 96 dispatch desks currently available, and they have not yet been used all at one time, even during the most trying of irregular operations scenarios. But the NOC will not be the newest control center for long. American Airlines, whose headquarters lies just across the Metroplex, at DFW airport in Fort Worth, has already begun planning for its new operations control center, which is largely modeled on the Southwest NOC. This process of sharing best practices with competing airlines is nothing new, particularly when it relates to safe operations. In fact, the NOC itself was an evolution of technology introduced in Delta’s operations center in Atlanta.
THE SOUTHWEST OF THE FUTURE
It is clear that Southwest executives are looking to carry the airline into the next generation of success. More than ever before, that will mean direct competition with the three remaining legacy carriers. Between its new international expansión and increasing financial stability, following a fleet-size hold, we expect Southwest to charge forward and give customers more and better options. Additionally, the airline has a lot to prove; many have argued that the airline has become just another one of the boys—a legacy in almost every respect. Although there are a myriad of reasons, from their rejection of GDS to their hub-free routing model, why this is an overreaching statement, it is nonetheless true that the reputation Southwest once had for being a low-fare airline has been tarnished. Some have even said that the “Southwest Effect,” the dramatic drop in fares upon Southwest’s entry into a new market, may be a thing of the past—replaced by the “Spirit Effect” in a world of ULCCs. But Southwest has vowed to fight back. During our time at headquarters, we Heard time and time again that it is time for the effect to once again take the spotlight.
Enter the new Southwest Effect—not dead, but reborn as a new strategy for a newly international airline. Sure, the fanfares are a little late, but perhaps that is by design. After all, Southwest has not truly inaugurated a new international service yet; it has merely absorbed some of AirTran’s international operations in its slow process of merger digestion. But that will soon change, and the greatest hope for the continued success of the so called Southwest Effect will be in its effectiveness on an international scale.
Based upon everything we have heard over the past few months, there are new markets in the pipeline—more than 50 new potential destinations that have been identified by the company as targets for future operations, and many of those are not domestic. Despite refusal by the airline to name any specific options, Gary Kelly (CEO) did say that he would be surprised if Southwest were not serving Canada within a decade. Despite the relatively short distance, the minute a flight crosses the border, it incurs huge added costs, and these are likely to give an airline like Southwest pause because they threaten the low-fare model, particularly in Canada where fees can be incredibly high. This begs the question… how does Southwest plan to work around these high costs, and is the airline willing to break new ground (though it would likely garner the support of other carriers) in pushing a legislative solution as it did with the reform of the Wright Amendment? They would not be the first to advocate for a free travel agreement between the United States and Canada, and both governments would have a very strong reason to consider it if Southwest’s service was contingent upon it.
Also, now that Southwest has a new reservation system capable of booking international itineraries, it stands to reason that the airline may wish to expand its international services faster than its fleet—and risk management team—will allow. Enter the codeshare partners. Southwest has managed it before, most notably with ATA prior to the airline’s demise, and it even attempted one with WestJet that never quite made it off the ground. It is likely that European services are a long way off as Southwest focuses on domestic streamlining and North American expansion, but Southwest may be able to tap into the transatlantic market and enhance its customer base by partnering with a carrier like Icelandair, with whom it has partnered before, whose model closely complements its own and which flies into airports where Southwest already has a substantial presence, or perhaps even Norwegian.
In the realm of domestic expansion, which is likely to remain Southwest’s bread-and-butter for many years to come, the nagging question of Hawaiiremains alive and well. Speculation about such service has been ongoing for several years, but only with the introduction of the 737-800 has it become an option worth seriously considering. It may take a few more years but, with the consolidation of services by the string of legacy mergers, it may make more sense for Southwest to give Hawaii a fighting chance. If Alaska Airlines can serve the islands cost effectively with its all-737 fleet, then it stands to reason that Southwest could do the same.
With the dawn of longer flights, there is a growing concern among passengers that the inflight experience needs a refresh. The introduction of the Evolve seating concept has not been terribly well received and, having connected between flights with the old and new seats installed, we can lend credence to that disappointment. Southwest did say that a seating refresh would come with the new brand, but that it would take longer to roll out tan the new livery. In a year or two, seats will begin to be swapped out and interiors retrofitted, but this is not meant to be a substantial change, and Evolve is not going away. But it may be reinvented.
During our tour, courtesy of the newly opened workspaces, we caught a glimpse of a new seating concept from which our guide quickly rushed us away. It looked like an Evolve seat from the front, but the back was a different story. Southwest may be the next major carrier to install high-back literatura pockets in order to improve legroom—or, at least, we hope it was for legroom and not an excuse to decrease seat pitch and add another row. Since we were not intended to see it, no one was willing to comment on it. Perhaps more importantly, though, for long flight comfort, particularly in a wireless IFE environment, is the availability of in-seat power. If customers are expected to use their own devices to access content, then they will need a way of keeping those devices charged during the flight. At the very least, a USB power source would be required for flights to Hawaii or to some proposed destinations in northern South America, otherwise the modern passenger would become very bored for the last hour or two of the flight.
Since Southwest is already the world’s fourth largest carrier, it is easy to see why the battle for customer loyalty would take place now. Make no mistake—many Southwest customers are intensely loyal, and they have been from the beginning. On one hand, loyalty requires a solid, if not superior, product, and Southwest has invested heavily in it. On the other, at least in the airline industry, it requires a loyalty program that is actually rewarding. As legacy carriers shift their focus toward awarding only the very top tier of frequent fliers, Southwest has deliberately made its rewards more accessible. Rapid Rewards is a solid program and, despite being one of the first to utilize a revenue-based earning system, the airline has managed to balance this blatant focus on revenue with the accessibility of award tickets, which are redeemable for any available seat on any flight, and which are still accessible even to the infrequent flier. It all makes more sense and is easy to digest, which is why many customers prefer it to the legacy model of fixed redemption levels and blackout dates. Rapid Rewards is a strong contender in the loyalty game, and it will certainly keep Southwest competitive as it continues to encroach upon traditional legacy carrier territory even more.
Overall, Southwest is unique in the industry—it enjoys profitability and customer loyalty in its own niche market, in which it does not have to share with direct competitors in the way that many other carriers do. And, if it comes down to product differentiation, then they have a very solid product indeed and one to which customers have continued to respond positively over the decades. As the possibilities for travel on Southwest increase, the loyalty of its customers will likely increase as well, as they will no longer have to rely on other carriers for travel needs that Southwest cannot accommodate. The future for the carrier looks incredibly bright. Southwest will be a major player in the continued evolution of the airline industry for many more decades.