Southwest Airlines and the Flying Big Three
By: Andy Wagner
Jeff Bailey at the New York Times wrote a great article about Southwest Airlines and their legendary approach to the key lean principle of respect for people. After talking about Southwest’s propensity for cross-dressing CEOs and other ‘fun at work’, the author brings up a popular topic in the lean blogosphere these days, direct labor costs:
The premise behind all this is that a little fun translates into a lot of productivity. Southwest, after pay cuts at other airlines, has the industry’s highest wages. But because of efficient work habits, measured in how much it spends to fly a passenger a given distance, its costs are the lowest among big airlines.
That right, while legacy airlines, a veritable flying “Detroit Three,” were busy chopping heads and chopping pay, Southwest was doing the same thing that they have always done, cutting waste. Southwest’s key competitive advantage over some 40 plus consecutive quarters of profitability has been its 30-minute turn-around time at the gate. By requiring flight crews, including pilots, to do cabin cleaning and not assigning seats, the airline shaved 15-minutes off its ground time verses their competition. This improved on-time arrivals and reduced the number of expensive airframe they had to buy–capital costs during flush years that often leave airlines in the lurch during downturns. Southwest is one of few US airlines that continued to buy, slowly but steadily, through the recent airline crisis.
Nobody would ever compare the flashy, over the top Herb Kelleher with any of the button-down conservative, straight laced types from Toyota City. Strictly speaking, Southwest hasn’t used the word lean or cited the Toyota Production System as the source of what they do, but evidence abounds that they embrace the two key pillars of lean: respect for people and continuous elimination of waste. I think this goes to show that lean can wear many types of clothing.