Southwest Airlines: The airline industries
Introduction
The airline industry is one of the most dynamic industries in the market, especially because of the magnitude of the globalization to which the world has reached. It is very volatile because it depends on tourism, the business industry, technology industry, the oil industry, economic cycles, laws from many countries, among others; And this is because it is one of the most important industries to connect cultures, countries and people. Although there have been many problems for airlines, the main problem prior to COVID-19 were the new regulations implemented by Congress in 2013.
Developing
The industry has always been found in constant legislative changes that affect the operation, competence and profitability of airlines, however, since 1970 it had faced a deregularization that caused high competitiveness, demand growth, market expansion, airline hatching domestic and changes in business models; All these advances meant profitability for the industry and that it reached its peak, giving prestige even to the collaborators. However, with the growth of flight demand, air accident news was greater, which caused difficult situations for airlines.
An example of this was the plane crash in the Twin Towers in September 2001, which caused a decline for the industry, people were afraid of traveling and airlines had to implement strategies to sell tickets. Another example was the March 24, 2015 flight accident of Germanwings, due to the pilot’s suicide, which caused the death of 149 psajeros. All these unfortunate events caused governments to impose new regulations to guarantee security attributing the responsibility of accidents to the capacity of pilots.
In turn, they imposed a restriction of having at least 1,500 hours of flight in cabin to be able to pilot on commercial flights and the pilots had to be at a maximum of 65 years of age (before were 250 hours in the cabin). These regulations had serious consequences in the aeronautical industry, but the largest of them was the pilot deficit, since only one minor job.
The lack of pilots caused a difficult cycle to break: having less pilots the airlines must close routes and generate less flights, this causes less tickets sold, less profitability and this a decrease in staff wages (mainly in regional airlines), especially the pilots, who have the highest salaries. However, becoming a pilot not only requires a lot of money but a lot of time in aviation schools, flight experience, security certifications, and also experience in different works related to the air industry.
If for a pilot the cost is greater than the income he could receive, what is the incentive of becoming a pilot?. The problem does not end there, Boeing, the large aircraft manufacturing company, ensures that 95,000 pilots will be sued in the next 20 years because the demand for aircraft will increase by about 40%. On the offer side, according to Boeing, 42% of current pilots will reach retirement age in the next six years; And the problem intensifies since the majority of the supply of pilots came from ex -military who after giving their service became commercial pilots.
Now the militia is encouraging longer military services and implementing unmanned air trips so there are less pilot training provided by the Army. In fact, Forbes states: there is no pilot shortage; This term implies a situation in which there is the possibility of correction. It is not ‘corregible’: the new regulatory barriers to enter the pilot profession are effectively permanent. And that means that the availability of this resource will be different than in the past.
Read: Much less. Result: less small aircraft flight. Less service in smaller local airports. In a nutshell, airlines are in an incentive problem, since there are less and fewer stimuli for the pilot career to be striking as it was in the seventies. The airlines are volatile to the laws, so the only thing they have left to keep afloat is to look Airlines are starting to withdraw stops to attract new participants.
Solutions
The pilot deficit represents a very big problem in the attraction, recruitment and retention of personnel in the airlines. If the demand for pilots continues to grow, the pilot post will be increasing. To be able to solve or at least mitigate the problem, experts propose solutions such as: replace some of the hours in the cabin for hours in simulators. Although this solution could reduce the cost of becoming a pilot.
It could be counterproductive for your experience and development of skills and skills that only occur in the air (emergency control, control climate changes, etc. The main airlines, such as Delta, are investing in training for their pilots, externalizing training to foreign countries, as in Mexican aviation academies that are less expensive than Americans and are high level. However, this is a luxury that regional airlines cannot occur due to the high costs of qualified training.
These great competitors can also resort to increasing the salary of the pilots to attract "qualified/experienced" pilots and at the same time fix the incentive problem facing the Aviator Pilot. However, this strategy could not be adopted by airlines with low presence (regional) because it would represent high costs that are impossible to cover for them. Development of academic aviation programs subsidized by the Government or financed by regional partners of the airlines.
Some airlines are creating their own aviation academies, such is the case of American Airlines, an airline that in April 2018 launched the American Airlines Cadet Academy to solve the problem of pilot scarcity by themselves. The problem in the lack of incentives (monetary and non -monetary) can be landed to become aviator because there are many barriers of entrances, low wages, high costs, among other reasons; But this can be summarized in a problem of attraction, recruitment and retention of personnel, a lack of strategy in the organizational development of the company and can be resolved with the Employee and Employer Branding.
southwest Airlines
Southwest, is an airline that implemented the Employee Branding to improve the results of the company at a general level, but focusing on the human talent of the company, motivating their collaborators so that they project the desired image of the company to consumers; This not only improves the work environment, but also consumer satisfaction by obtaining a better service from internal customers. This internal marketing strategy somehow guarantees employee retention.
On the other hand, the Employer Branding improves the attraction and recruitment of employees transmitting the company an attractive perception to the external client and how it focuses on creating a pleasant environment for its collaborators, thus attracting people related to the reputation of the company. Below are some recommendations for airlines to adopt Employee/Employer Branding strategies.
Employee branding
As in Southwest, they must internalize the image of the brand and how important their employees are for them, motivate them to grow together with the company and that despite being within such a volatile industry to the new laws, they will do everything possible to keep the environment more pleasant for them. "With good management that unifies corporate culture and the brand, manifested through its staff, the company has managed to have, instead of employees, fans that constantly increase the value of the brand every day and on each flight". (Corporate Excellence)
Implement monetary and non -monetary incentives. Such is the case of Southwest Airlines, who offer their employee actions of the company as bonds or bonuses so that they feel they own and responsible. “Doing the right thing for these employees includes providing them with a stable work environment with equal opportunities for learning and personal growth. We encourage creativity and innovation to improve the effectiveness of Southwest Airlines.
Fundamentally, employees will receive within the organization the same interest, respect and consideration that they must externally provide to each Southwest client."(Southwest) constantly and consistently transmit the" spirit ". This practice is one of the most recognized and successful of Southwest, each collaborator shouts right and left the spirit of the company and it is because Southwest transmits it through all possible, formal and informal channels (diagonal relationships, all have communication with all, including ranges and departments).
In addition, they reward attitudes and behaviors that are consisting of the company’s values.Airlines should implement the attraction of personnel communicating the mission, vision and values of the company; especially how important the safety and professionalism of flights is for them. In this way they can attract the most qualified and experienced people in piloting; In addition, focus on transmitting the work environment and the "reputation" that the company has and that they feel "proud" to work for them.
conclusion
Finally, it is important to create programs that demonstrate the company’s mission and values, as in the case of the discounts that Southwest provided to soldiers to meet with their families, this transmitted the message of love (LUV) that wants to spread to its collaborators and customers; Another example is the “Distributor for one day” program that UPS implemented in children, this communicated its family value, love and trust that wants to convey inside and outside the company.
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