Case Study of Corporate Social Responsibility in Southwest Airlines.

Southwest Airlines Co. which launched on March 15, 1967, has famous as the main American airline with its head office located in Dallas, Texas. This airline company was listed as one of the biggest low-cost airline companies in whole over the world. Southwest Airlines has been enduring to distinguish itself from other airline companies with excellent Customer Service provided by its 57,000 employees in serving about 120 million passengers each year. Southwest Airlines has invented Transfarency, which is a tool to define the purposed values of the airline company in treating all of its customers with honest and fair manners, along with the remaining low fares (Southwest.com, 2019). In fact, Southwest Airlines is the main airline company in the United States that offering the ‘bags fly free’ service to all of its customers. In addition to this, Southwest Airlines has known as the airline company which launched extraordinary affordability era in the aviation market industry. This act that named by the United States Department of Transportation as “The Southwest Effect” which aims to lower the flight tickets fares and escalate the passenger traffic in each destination. This is aligned with the main purpose of Southwest Airlines which mentioned as “to connect People to what’s important in their lives through friendly, reliable, and low-cost air travel” (Southwestonereport.com, 2018).

Corporate Social Responsibility of Southwest Airlines

            Southwest Airlines has been always giving its effort in maintaining its Corporate Social Responsibility or CSR. One of examples of how the airline company has been involving Corporate Social Responsibility in its business activities is related to the commitment of Southwest Airlines in pursuing sustainability along with environmental efficiency. For this, the airline company has launched its ‘Evolve’ campaign with redesigning its 737-700 aircraft. This process of redesign was including in the replacement of the leather seats along with additional interior materials with sturdy and environment-friendly products. From this redesign process, the airline company had to discard huge volume of leather, and thus, Southwest Airlines needed to figure out an innovative purpose for it. Hence, the airline company came up with upcycling alternative with a purpose to only deliver positive impact from this ‘Evolve’ campaign on the societies. The massive volume of leathers that have been removed from the aircraft donated by the airline company to some organizations in whole over the world. One of them was mentioned as SOS Children’s Villages Kenya, a place where youth adults apprenticed in the leather works and designed 2,100 pairs of shoes. Then, all of the shoes again donated to the SOS villages, and also Ahadi Trust which is a part of anti-jigger campaign. Some of those shoes also delivered to Cura Orphanage, which is housing for many children who eventually lost their parents due to AIDS (DUNBAR, 2015).

            Moreover, Southwest Airlines has been performing its business activities within ethical and social responsible manners which presented as a good citizen with its passengers. For this reason, the airline company has provided a wide arrangement of opportunities for all of its employees to become professionals by establishing internal training programs. In fact, Southwest Airlines has always been motivating the employees to lengthen their knowledge with involve in some external training as for their relevant fields. The company has enhanced as well the Leadership courses to involve the content of sustainability. Along with these courses, the mentors will discuss around sustainability, the fuel utilization, along with its effect on their greenhouse gas emissions and change of the climate as well. The airline company even has established some extraordinary initiatives with the main purpose to reduce emissions and also to support its recycling programs. There is also environmental planning made in each year for the operational teams that integrate the prevention of stormwater, appropriate disposal of waste, air license compliance, as well as the drinking water compliance included in each aircraft for the employees (Tourism4sdgs.org, 2018).

            Another amazing practice of ethical behavior and Corporate Social Responsibility performed by Southwest Airlines is regarding the lower ticket prices, along with the jobs and social services. All of the employees in the company have been taking part in a number of charitable initiatives. In fact, the entire Southwest Airlines’ employees have created teams and take part in the “Walk for the Cure” nationally. The efforts that they have presented not only restricted to their home cities. Instead, the entire employees of this airline company have donated for more than $50,000 throughout Share of the Spirit, which is an organization that donating dozens of phone cards and deliver them to thousands of the US armies to support them contact their families.

            In 2018, Southwest Airlines has established its One Report which is an inclusive report which detailed the citizenship efforts, financial performances, along with the milestones that have achieved by the company by 2017. Gary C. Kelly as the Board and Chief Executive Officer of this airline company has stated that “Southwest has a great heart, a great soul. It is just wonderful that it also all comes together as a great business” (Southwestonereport.com, 2018). Moreover, Kelly has also added that "The One Report is our opportunity to celebrate Southwest's dedication to the triple bottom line of Performance, People, and Planet. Southwest takes great pride in how we care for our Employees, Customers, Shareholders, and Communities. The One Report helps us bring to life our purpose of connecting People to what's important in their lives through friendly, reliable, and low-cost air travel, and we are excited to share it" (Southwestonereport.com, 2018).

            The report has highlighted as well the practices of Corporate Social Responsibility performed by Southwest Airlines as mentioned below.

Performance of Corporate Social Responsibility in Southwest Airlines

·     Southwest Airlines has placed as the by the United States Department of Transportation

·     Southwest Airlines has celebrated for its

·     Southwest Airlines has returned roughly  to its shareholders over the share dividends and repurchases

People of Corporate Social Responsibility in Southwest Airlines

·     Southwest Airlines has donated above than  of its total corporate financial for ticket donations and charities

·     Southwest Airlines has served for more than  passengers which has listed as an annual record

·     All of the employees in Southwest Airlines earned  in the context of the profit-sharing whole through 2017

Planet of Corporate Social Responsibility in Southwest Airlines

·     Southwest Airlines has renovated and resold roughly more than  of electric tools

·     Southwest Airlines has abstracted approximately  tons of waste derived from the landfills over the efforts of recycling and also energy recovery

·     In 2017, Southwest Airlines has saved about  gallons of fuel by sanitizing its planning estimations of fuel, in addition to its flight planning procedures

The dedication of Southwest Airlines in the context of Corporate Social Responsibility as well as the global citizenship was presented further at the time this airline company has listed as one of the 100 Best Corporate Citizens by Corporate Responsibility Magazine in the year of 2018 (3blassociation.com, 2019).

Along with the success Corporate Social Responsibility performed by Southwest Airlines, the airline company had to deal with the trend that it has actually established. In these modern days, there are many low-cost airline companies that have taken part in the aviation competition market industry. In fact, the Bureau of Transportation Statistics (BTS) has announced that from 2013 to 2018, the extremely low-cost carriers have almost doubled up the number of passengers that they served at various airports in the United States. As a result, the passengers have started to examine the performance of each airline company, including on-time performance (Smet, 2019).  Thus, this should not be underestimated by this airline company. Instead, it is a big task for Southwest Airlines to maintain both its position and also its loyal customers as well.

The table below has illustrated how Southwest Airlines has been getting tough rivalries in this on-time performance examination.

Table 1 On-Time Performance of U.S. Legacy, Hybrid and Low-cost Carriers in 2018

Source: https://reason.org/commentary/the-competition-low-cost-airlines-bring-to-the-industry-is-good-for-customers/

Thus, some questions that needed to be considered from the case study of Corporate Social Responsibility in Southwest Airlines are as follow:

1. The table above has presented that Southwest Airlines has been getting competitive pressures derived from a new generation of low-cost airline companies such as Alaska, Frontier, JetBlue, Delta Airlines, in addition to the legacy airline companies which presented by Delta, American, and also United. What should Southwest Airlines do next? 

2.  Analyze what has triggered the airline companies to follow the low-cost fares introduced by Southwest Airlines.

3. Even though Southwest Airlines has dedicated to giving the best standard of customer services, but, along with the rise of low-cost fares competition in the aviation industry, some of Southwest Airlines loyal customers might shift to another airline company that provides a cheaper cost. Analyze what are the considerations or motivations for the customers to do so.

4. Recommend some ways for Southwest Airlines could gain back its 1st rank position in providing low-cost fares and also maintain its loyal customers.