AIRLINES

Operations 


Employment

The President and CEO of Southwest is Gary C. Kelly. Kelly replaced former CEO Jim Parker on July 15, 2004 and assumed the title of "President" on July 15, 2008, replacing former PresidentColleen Barrett.
Former CEO Jim Parker led Southwest from mid-2001, keeping alive Southwest's unprecedented streak of profitability and guiding its growth as it became the largest commercial carrier in the domestic United States. Jim Parker abruptly quit as CEO and vice chairman for "personal reasons" though it's suspected that he stepped down after failing to reach an agreement with the flight attendant union, TWU Local 556, which made their labor strife (and displeasure with the Southwest CEO) public.]
Southwest's CFO is Laura Wright. In July 2007, Herb Kelleher resigned his position as Chairman.Colleen Barrett left her post on the Board of Directors and Corporate Secretary in May 2008 and President in July 2008. Both are still active employees of Southwest Airlines.
Southwest hired its first black pilot, Louis Freeman, in 1980. In 1992, he was named the first blackchief pilot of any major U.S. airline.

Organized labor

In contrast to non-union competitor JetBlue Airways, Southwest maintains its profitability and low-fare, low-cost business model despite being heavily unionized. The Southwest Airline Pilots' Association, a union not affiliated with the Air Line Pilots Association, represents the airline's pilots. The Aircraft Maintenance Technicians' are represented by the Aircraft Mechanics Fraternal Association (AMFA). Customer Service Agents and Reservation Agents are represented by the International Association of Machinists and Aerospace Workers Union (IAM). Flight Dispatchers, Flight Attendants, Ramp agents and Operations agents are represented by the Transport Workers Union (TWU). Acquisitions
As of May 2011 Southwest Airlines has completed four acquisitions which have helped the airline to grow its revenue base and destinations served.
Muse Air – acquired 1985, divested 1987
Southwest paid US$60.5 million in stock and cash for Muse Air when Muse was on the verge of collapse in 1985. After completing the acquisition, Southwest renamed MuseAir TranStar Airlines. TranStar became a wholly owned subsidiary of Southwest and operated as an independent airline. Unwilling to compete in a fare war against Frank Lorenzo's Texas Air, Southwest sold TransStar's assets to Lorenzo in August 1987.
Morris Air – acquired 1993
Southwest acquired Morris Air, a competing airline based in Salt Lake City, Utah, in 1992, paying US$134 million in stock. After completing the purchase, Southwest absorbed the capital and routes of Morris Air into Southwest's inventory and service, including Morris' Pacific Northwest destinations not previously served by Southwest. One founder of Morris Air, David Neeleman, worked with Southwest for a short period before leaving to found JetBlue Airways, a competing airline.
ATA Airlines – acquired 2008
Southwest paid US$7.5 million to acquire certain assets from bankrupt ATA Airlines in 2008. Southwest's primary reason for making the purchase was to acquire the operating certificate and New York LaGuardia Airport landing slots formerly controlled by ATA. The purchase did not include any aircraft, facilities or employees of ATA.
AirTran Airways – acquired 2011

On May 2, 2011 Southwest Airlines completed the acquisition of AirTran Airways by purchasing all of the outstanding common stock of AirTran Holdings, Inc. (former stock ticker NYSE:AAI), the former parent company of AirTran Airways. Southwest Airlines first announced the acquisition on September 27, 2010 and received final approval from the United States Department of Justice on April 27, 2011. Southwest Airlines estimates the transaction's value at $3.2 billion and expects one time costs to integrate the two airlines of US$500 million. Southwest expects to obtain a single operating certificate from the United States Federal Aviation Administration in the first quarter of 2012, but expects that full integration of AirTran into Southwest's operations will take several years.
Southwest Airlines will add AirTran Airways's 88 Boeing 717 aircraft to the Southwest fleet and plans to begin changing AirTran liveried aircraft to the Southwest livery beginning in 2012. After the close of the acquisition the combined fleet of the two airlines numbered 690 aircraft.
The purchase expanded Southwest's service to 38 additional destinations including Mexico, the Caribbean, and Atlanta, an AirTran hub and the largest U.S. city not served by Southwest prior to the acquisition. Traditionally averse to hub operations, Southwest Airlines CEO Gary Kelly believed at the time the acquisition closed that Southwest needed to fully understand the airline's operations in Atlanta before making any changes at that airport.
Failed acquisitions
In its attempts to grow revenues through acquisitions, Southwest has not always succeeded.
Frontier Airlines – 2009
On July 30, 2009, Southwest Airlines announced a $113.6 million bid for bankrupt Frontier Airlines Holdings, the parent company of Frontier Airlines. Southwest planned to initially operate Frontier as a stand-alone carrier, eventually absorbing the airline and replacing Frontier's aircraft with Boeing 737s. Less than one month after submitting its bid, Southwest learned on August 14 that it had lost the bidding toRepublic Airways Holdings. Industry experts had expected Southwest to win the bidding, allowing Southwest to grow its presence in Denver and serve international destinations. Southwest stated that its requirement for pilots' unions at both companies to reach an agreement as a condition of acquisition was a key factor in losing the bid.
Jet engine pressure-washing
In 2008, Southwest contracted with Pratt and Whitney to supply the proprietary Ecopower water pressure-washing system, which allows Southwest to clean grime and contaminants off engine turbine blades while the aircraft is parked at the gate. Frequent use of the Ecopower system is estimated to improve fuel efficiency by about 1.9%.
Internet presence
On March 16, 1995, Southwest became one of the first airlines to have a website. Originally called the "Southwest Airlines Home Gate", passengers could view schedules, a route map, and company information at Iflyswa.com. Southwest.com is the number one airline website for online revenue, according to PhoCusWright. Nielsen/Netratings also reports that Southwest.com is the largest airline site in terms of unique visitors.[4] In 2006, 70 percent of flight bookings and 73 percent of revenue was generated from bookings on southwest.com. As of June 2007, 69 percent of Southwest passengers checked in for their flights online or at a kiosk.
Safety violations
On March 6, 2008, Federal Aviation Administration (FAA) inspectors submitted documents to the United States Congress, alleging that Southwest allowed 117 of its aircraft to fly carrying passengers despite the fact that the planes were "not airworthy" according to air safety investigators  In some cases the planes were allowed to fly for up to 30 months after the inspection deadlines had passed, rendering them unfit to fly. Records indicate that thousands of passengers were flown on aircraft deemed unsafe by federal standards. Southwest declined comment at the time, and US Representative James Oberstar advised a hearing would be held]
On March 12, 2008, Southwest Airlines voluntarily grounded 44 planes to check if they needed further inspection. The FAA claimed that Southwest Airlines flew almost 60,000 flights without fuselage inspection. Southwest Airlines faced a $10.2 million fine if they violated FAA regulations. There have also been rumors that the FAA knew about Southwest Airlines violations but decided not to fine the airline because it would disrupt the service of Southwest.
On March 2, 2009, Southwest settled these claims, agreeing to pay the FAA fines of $7.5 million for these safety and maintenance issues. The original fine of $10.2 million – a sum which would have been the largest fine in the agency’s history – was lowered after a year of negotiations. The FAA gave Southwest two years in which to pay the fine.
On August 26, 2009 the FAA investigated Southwest for installing improper parts on about 10% of its jets. The work was performed by an outside maintenance company. The FAA stated that the parts do not present a safety danger, but the airline was given until December 24, 2009 to replace the parts with those approved by the FAA.The FAA is still determining whether it will fine Southwest or its vendor
Headquarters
The Southwest Airlines headquarters are located on the grounds of Dallas Love Field in the Love Field neighborhood of Dallas, Texas.
Previously the airline was headquartered in the 1820 Regal Row building in Dallas, by Love Field. Southwest moved into its current headquarters in 1990. At that time the headquarters had 256,000 square feet (23,800 m2) of space and approximately 650 employees. The current headquarters facility was built at a cost of $15 million in 1990 dollars.[ In early 1995 the building received an additional 60,000 square feet (5,600 m2) of space. As of 2006 about 1,400 employees worked in the three story building.
In March 1996, the airline announced that it would begin to build a 300,000 square feet (28,000 m2) addition to the existing corporate headquarters at a cost of $30 million in 1996 dollars. This occurred after, on Wednesday March 13, 1996, the Dallas City Council unanimously voted to allow for the construction. The airline leased two additional tracts of land, a total of 10 acres (4.0 ha) of space, from the City of Dallas to build a new pilot training facility, a headquarters expansion, and additional parking spaces. A $9.8 million new pilot training facility was built on a 5 acres (2.0 ha) plot of land owned by the city of Dallas; it was scheduled to be completed Spring 1997. With the new pilot training facility built, the old one would be removed and the company would expand its headquarters building to the north. 120,000 square feet (11,000 m2) of building space, which had a price of $16 million including fixtures, was built, making the headquarters have a total of 436,000 square feet (40,500 m2). The airline also leased 4.8 acres (1.9 ha) from the city of Dallas to build additional parking; 700 spaces were added to the existing 1,200. After the facilities announced in 1996 were added, Southwest had a total leasehold of about 24 acres (9.7 ha) of land, including its headquarters, training facilities, and parking. By the end of 1997 the expansion of the facilities at Love Field and several terminal improvements were expected to cost Southwest $47 million

Risk management

Southwest Airlines has gained a reputation for "outside the box thinking" a proactive risk management, including the use of fuel hedging to insulate against fuel price fluctuation. Some analysts have argued against the style of profit-motivated energy trading Southwest did between 1999 and the early 2000s. They suggested that rather than hedging business risk (such as a hedge on weather to a farmer), Southwest was simply speculating on energy prices, without a formal rationale for doing so.
At present, Southwest has enjoyed much positive press (and a strong financial boost) from its energy trading skills .However, while most analysts agree that volatility hedges can be beneficial, speculative hedges are not widely supported as a continuing strategy for profits.
In the third quarter of 2008, Southwest recorded its first loss in 17 years due to its fuel-hedging contracts being of lesser value because of the drop in oil prices