In 1993, Southwest Airlines emerged as the model for success in the airline industry.
Southwest specializes in frequent short haul, low fare, no-frills flights. For example, Southwest spends 13 cents per passenger on food. The industry average is $5.28 per passenger. As a result of its no-frills service and flexible work rules granted by its employees, Southwest's costs are about 30 percent below the major carriers. Southwest has been growing at 15 percent per year.
American Airlines president Robert Crandall said his airline was trying to gain productivity similar to Southwest's in a new contract with flight attendants. The attendants struck American Nov. 18 during the heavily-traveled Thanksgiving holiday season, and the airline lost about $50 million before President Clinton stepped in and asked the two sides to abide by binding arbitration. Both agreed.
In December, the board of United Airlines' parent company voted to sell 53 percent of the airline to its employees in exchange for work rule changes and wage concessions. The sale would allow United the flexibility to operate more like Southwest.
