We strive to continuously improve our Performance.
We have maintained the same Core Values since our inception in 1971:
- Take care of our People, our communities, our Customers, and our Shareholders
- Keep fares low and costs lower
- Operate the safest, most efficient, most reliable airline
- Generate consistent annual profits
Our formula for success is applying our Core Values with our People’s Warrior Spirit, Servant’s Heart, and Fun-LUVing Attitude. And, it’s working. Southwest Airlines is the only major U.S. airline that can claim 39 consecutive years of profitability. We’ve achieved our success without resorting to layoffs, pay cuts, or benefit cuts. And, Employees’ dedication shows—we consistently hold one of the top rankings in Customer Satisfaction1 and have repeatedly been ranked as one of the best places to work.
In a momentous year that included our 40th Anniversary and the acquisition of AirTran, we continued our commitment to offer impeccable Customer Service and low fares. And, we achieved an annual profit for our Shareholders, despite a significant increase in jet fuel costs. In an effort to overcome increasing jet fuel costs, we continued to grow our revenue in 2011 through revenue management and optimization of our route network, while continuing our focus on value-added products such as Business Select and EarlyBird Check-In™. While we experienced strong revenue growth in 2011, it was not sufficient to keep pace with significantly higher jet fuel prices. The resulting year-over-year decline in profits requires continued focus on improving productivity, using resources responsibly, and eliminating waste.
The Core Values that have made us successful for the past four decades will continue to guide us as we execute our strategic initiatives to integrate AirTran into Southwest Airlines, add Boeing 737-800s to our fleet as part of our fleet modernization plan, grow our All-New Rapid Rewards® program, and eventually replace our reservation system. We’re passionate about achieving and sustaining our 15 percent pre-tax return on invested capital through our Performance goals to:
- Win more Customers
- Boost operating revenues
- Preserve our low-cost position
- Maintain a strong balance sheet with adequate cash reserves
We expect the successful execution of our strategic initiatives to strengthen our brand and solidify our fundamental competitive advantages: low costs, low fares, great Customer Service, the largest domestic route network, and a strong financial position.G
Contributing to the Economic Vitality of Our Communities
Our Performance impacts more than our Company. Our low fares stimulate economies in cities where we fly. Our Servant’s Heart allows others to thrive, and our green filter helps protect the planet.
Together Southwest Airlines and AirTran will serve 97 destinations based on our joint schedules announced as of March 2012. We expect our collective market presence to generate substantial savings for our Customers through the well-known “Southwest Effect” of invigorating competition by reducing fares and stimulating additional Passenger traffic in the cities where we fly. Combining our airlines will encourage competition in destinations like Atlanta, where we have the potential to serve more than a million new Passengers and provide hundreds of millions of dollars in fare savings to consumers annually.2 In New York City and Washington, D.C., the combined airline offers Passengers additional travel options and injects needed low-fare competition into these critical air travel markets. Together, we expect to bring our low fares and Fun-LUVing Attitude to more than 100 million Customers annually.
As the hometown carrier that cares, we strive to make a positive difference in the communities we serve. We believe in championing the causes that matter most to our People. We provide support, leadership, and encouragement to a variety of philanthropic causes through our Community Affairs and Grassroots Team, who work directly with local, civic, and charitable organizations. Through our Community Giving Boards, comprised of local Employees from various work groups, we identify charitable organizations to support the communities where they live and work. At Southwest Airlines, we value empowering others and building meaningful relationships through community outreach and volunteerism. To achieve this, we donate our time, tickets, funds, and, most importantly, LUV.
We believe it’s our responsibility to protect our planet now and for future generations, so we operate with a green filter—a mindset of making environmentally responsible decisions. As good environmental stewards, we recycle onboard and in airports. We are working to improve energy and water conservation and extend our use of renewable energy at our Headquarters and other facilities. In the air, we’re conserving jet fuel, reducing emissions, and using recycled and sustainable materials to furnish our cabins. On the ground, where possible, we’re using alternative and highly efficient fuel sources to power our ground support equipment. Given persistently high jet fuel prices, operating with a green filter is not only good for the environment, but it’s also good for our bottom line.
Taking Care of Our Own
At Southwest Airlines, we believe in treating each other the way we want to be treated. For our Employees, we offer the freedom to pursue good health, make a positive difference, work hard and have FUN, and stay connected. We contribute to the financial security of our Employees by offering 401(k) Company matching contributions and contributing to our ProfitSharing Plan. Our University for People provides needed training and career development to help Employees learn and grow. We also encourage them to support the local charities close to their hearts by rewarding their Volunteer efforts. We take time to celebrate and honor our Employees through our Employee recognition programs, including our annual Volunteers of LUV, President’s Award, Winning Spirit Award, Stars of the Month, and Kick Tails. By taking care of our Southwest Family and encouraging our Employees to give back and help others, we create a Culture of LUV that ultimately contributes to our financial success. After all, happy Employees equal happy Customers, and happy Customers keep flying Southwest Airlines.
Citizenship at Southwest Airlines
Financial success is more than achieving fiscal metrics. Our long-term financial success is, in part, dependent on our future successes related to non-financial key performance indicators (KPIs) that serve as proxy measures of our ability to align operating costs with the true environmental and social costs of our actions. In 2012, our Citizenship Committee intends to prioritize and establish environmental and social goals for selected KPIs and will work to define protocols for collecting and analyzing operational data related to each KPI. We look forward to using future KPI data to continuously improve and reduce future impacts on the environment.
| 1 | From the 2011 yearend U.S. Department of Transportation Air Travel Consumer Report issued February 2012. Top ranking is for Southwest Airlines only. AirTran ranked fifth in the same report. |
| 2 | Based on economic analysis by Campbell-Hill Aviation Group, LLP, commissioned by Southwest Airlines. |
