Southwest Airlines

Southwest Airlines is a publicly traded company having good stock performances results. Southwest Airlines is a Fortune 500 stock listed company trading under LUV symbol. The experience of flying on Southwest is quite different from that of most other United States airlines.

Its employees are generally well-known for their friendliness, which is often attributed to a unique love based corporate atmosphere, which made chairman Herb Kelleher a celebrity in the business world. Jim Parker resigned in July 2004 and was replaced by Chief Financial Officer Gary Kelly. The President of Southwest is former corporate secretary Colleen Barrett, who has been with the company since day one.

Southwest has also been a major inspiration to other low-cost airlines, and its business model has been repeated many times around the world. Europe's easy Jet and Ryan air are two of the best known airlines to follow their business strategy in that continent, while Canada's WestJet is using Southwest's modus operandi in that country. New Zealand's Freedom Air and Thailand's Nok Air are other examples of airlines that are based on their system.

One of the reasons for profitability is Southwest's reliance on fuel hedging. Almost since its inception, they have purchased fuel options for years in advance to smooth out fluctuations in fuel costs. They have substantially increased its hedging in 2001 with response to projections of increased crude oil prices. They are currently paying 50 percent of the market price for its fuel, however that number will increase as hedges from 2001 and 2002 expire and new hedges at higher prices take effect. They have hedges of varying percentages and prices in place through 2009.

The other reason for its profitability is that, since inception they have operated one model of aircraft, the Boeing 737, though it has operated with several variants of this model. It has been argued that operating only one model of aircraft has allowed them to operate more profitably than its competitors which often operate with several aircraft models, since it needs to purchase and stock fewer replacement parts, ground support equipment, and other items necessary to maintain its fleet. They are the basis of the American version of the reality shows Airline.