Question
The key factors that have contributed to Southwest Airlines' long-term profitability include its commitment to being a low-fare airline and its relentless focus on cost-cutting. This guiding principle has allowed the company to make strategic decisions that have ensured its profitability. Additionally, Southwest Airlines has created a fun, light-hearted work environment and atmosphere for travelers, which has helped it to stand out in the competitive airline industry.
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Southwest Airlines has a reputation for creating a fun, light-hearted work environment and atmosphere for travelers. But when asked what the "secret to running the company" is, Herb Kelleher, the long-tenured CEO, replied, "We are THE low-fare airline. Once you understand that fact, you can make any decision about this company's future as well as I can." This simple message - "We are THE low-fare airline," is perhaps not what the outsider would have expected as Southwest Airline's guiding principle. Yet, it is effective because it is not coupled with vision-speak about creating a jolly work culture and experience for flyers. Yes, that aspect of the company's vision is important, but not as important as relentlessly cutting costs and using a "budget" mentality, at least according to Herb Kelleher. What is perhaps less well known about Southwest is that, while competitors in the airline industry struggle to retain slim margins, Southwest has managed to be profitable for over thirty years...
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