Wednesday, December 15, 2004

New CEO moving Southwest in a new direction

Gary Kelly has only been the CEO of Southwest Airlines for four months, but he is already taking a much more aggressive approach to the business than the previous CEO and founder, Herb Kelleher, did.

First, Kelly began fighting against the Wright Amendment, which I discussed in a previous post. Ever since the implementation of this amendment, Southwest has hesitated to take either side of the issue. But now, under Kelly's leadership, Southwest is actively looking to overturn this ruling.

Secondly, Southwest has tried to drastically increase their market share at Midway Airport. While Kelly denies it, this merger looks very similar to a takeover. They are also discussing "code-sharing", where a passenger buys tickets through one airline but ends up flying on a different airline.

All in all, Kelly looks to be much more competitive than Kelleher. While some of these changes will probably be welcome, other changes such as the code-sharing are worrisome because it could erode Southwest's brand equity.

More information on Homeland Security secretary

Bush's original nomination for Homeland Security director, Bernard Kerik, withdrew his name from consideration following some controversy over his hiring of an illegal alien to be his nanny. Although Kerik cited "personal reasons", it is difficult to believe there were only "personal reasons" or he had to "spend more time with his family" because politicians use that excuse every time they reason from a post to avoid controversy.

More recently, the Bush White House has reportedly suggested Joe Lieberman, a Democrat, for the job of Homeland Security secretary. However, Lieberman has rejected this offer before it was even presented to him. The Bush Administration will have to look elsewhere to fill this spot.

The cabinet position of Homeland Security secretary is very closely related to air travel and Southwest Airlines. This department was created in the wake of the 9/11 attacks, and the new director will certainly have a large impact on the security that is required in airports and airplanes.

Monday, December 13, 2004

Southwest AND BIT....doesn't get much better

This article is simply unbelievable because it is about the greatest airline in the world (Southwest), AND the standardizing of IT functions to reduce costs, which has been the main topic of our BIT class.

"This strategy is intended to help Southwest Airlines streamline operations, improve resource utilization, avoid paying for redundant functionality, and more tightly integrate the systems that support its business." This is a direct quote from the article, which is ironic because this is tied in so closely to what we have discussed in BIT. Pretty much, Southwest wants to operate more efficiently, so they are trying to streamline their business processes.

While this is seen as a positive step in most any company, we have seen that several complications can arise. Hopefully these complications will pass Southwest by the wayside. Also, some standardized software such as Oracle and PeopleSoft have proved to be too restrictive. Hopefully this does not signify a shift in Southwest's corporate strategy away from their signature flexibility.

Sunday, December 12, 2004

Southwest seeking to increase market share at Midway

Southwest has offered $100 million for everything involved with ATA (a bankrupt competitor). Some other low-cost carriers are not making a bid on ATA, but that does not stop them from complaining. They claim that Southwest is trying to buy out/form an alliance with ATA simply to eliminate competition at Midway so they can jack up prices.

Knowing what we do about Southwest, I would be really surprised if they were doing this as a sneaky trick. They are right to expand their market share wherever possible, and just because there is less competition does not mean they will raise their prices. Doing so would ruin their reputation as a low-cost airline. Go Southwest!

Monday, December 06, 2004

Director of Homeland Security resigned

Tom Ridge resigned about a week ago, which has a connection to Southwest Airlines because many non-flyers are scared to fly. Ridge's sole accomplishment (according to Jon Stewart of The Daily Show) was the color coded terror alert warning system. I don't know how many people actually paid attention to this and didn't fly when it was raised, but the idea was there. Hopefully Ridge's replacement will do better than raising the terror level when Bush's approval rating dropped.

Southwest lobbying to fly out of Dallas

Southwest is currently restricted from flying out of Dallas to other major cities that aren't in states surrounding Texas. An federal law from 1979 designed to protect the Dallas airport prohibits any major carrier from flying out of Dallas to anywhere besides inside Texas and to seven surrounding states. Southwest will be arguing that it is absolutely necessary that they be allowed to fly to cities such as Chicago and New York and that the Dallas Fort Worth airport no longer needs protection. Because Southwest is based in Dallas, it is vital that this federal amendment be overturned.

Tuesday, November 16, 2004


Keith Hayden

I am a student at the University of Michigan.

The OC

Keith Hayden,

Michigan Football

If Michigan beats Ohio St. or Wisconsin loses to Iowa on Saturday, Michigan will play in the Rose Bowl.

Michigan Football

If Michigan beats Ohio St. or Wisconsin loses to Iowa, Michigan will go to the Rose Bowl.