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Eliminate Waiting

By Tom Steinert-Threlkeld  |  Posted 2005-04-10 Print this article Print

Southwest Airlines is the only U.S. carrier to be profitable every year since 1972. Baseline spoke to CEO Gary Kelly about how he uses technology to help keep the airline turning planes around quickly and maintaining its primary advantage: low costs.

As we integrated our ticketing and reservation processes, the boarding pass was left manual. So until 2003, all customers would queue up in the gate area and exchange their boarding passes. Then we began distributing boarding passes from multiple points in an airport. Later, we added boarding-pass generation via Southwest.com. Now we have self-service kiosks, and we're adding functionality to those units this year. So that's what I mean when I say, we're behind. It was a choice that we made up until 2003, to keep our operations simpler.

But in this post 9-11 environment, with the additional security procedures that we have, customers want the convenience of being able to get their boarding passes at multiple locations and reduce the number of lines they stand in at airports. That became important for us, to meet those needs from a customer's perspective and remain competitive. It has the added advantage of being more cost-effective, because we don't need as many customer service agents.

Q. Are you catching up?

A. Our airport operations have gone through dramatic change since 9-11, with numerous additional security procedures heaped on our people, where we had to staff up even more to handle that. Now we've gotten more and more efficient. The federal government has taken over most of the checkpoint operations. We're finding that the hiring requirement at the airports is dramatically reduced.

Q. What else tells you that you're becoming more efficient?

A. One statistic is the number of people per aircraft. We peaked at about 95 employees per aircraft around 2000 or 2001. Our target, historically, has been around 80. Today, we're down to around 73 or 74.

Q. What are the primary causes?

A. The primary areas of improvement have been reservations, where we need fewer reservation agents per aircraft, and the airports, where we need fewer customer service agents per aircraft. That again flows from more customer self-service.

Q. After you became CEO, how long was it before you decided that CIO Tom Nealon would report directly to you?

A. I don't think I ever really had a thought that he would report anywhere else. I think it makes sense to organize around people's strengths and not make things unnatural. I've got a different background than [predecessor] Jim Parker and a different background than Herb Kelleher. Technology was reporting to me at the beginning of 2001; we had sponsored a great deal of change in the technology organization and in the technology that was deployed throughout Southwest from 2001 to 2004. And I didn't want to interrupt the momentum that we had. Tom Nealon and I have an outstanding relationship. He's a very fine Southwest officer. We're very proud of his accomplishments as well as those of the entire technology group.

  • Story Guide:
    Introduction: Southwest Airlines: Flying Low How to make the dollars count.
  • First, eliminate waiting; make ticketing convenient for passengers
  • Next, work closely with the CIO; apply the same tough analysis to IT as operations
  • Keep managers focused; do weekly analyses; know what you need to know, when you need to know it.

    Next page: Technology Equals Productivity

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    Tom was editor-in-chief of Interactive Week, from 1995 to 2000, leading a team that created the Internet industry's first newspaper and won numerous awards for the publication. He also has been an award-winning technology journalist for the Dallas Morning News and Fort Worth Star-Telegram. He is a graduate of the Harvard Business School and the University of Missouri School of Journalism.
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