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Southwest Airlines Company is a passenger airline which provides air transport in the United States. The company was founded in 1966 and incorporated in 1967 and has remained profitable and competitive ever since (Gittell, 2003). The organization has three levels of management which has contributed to increased efficiency within the company (Knol, 2002). The management of the airline is highly decentralized because there is no bureaucracy in the organization (Southwest airline, 2010). The airline has advocated for a number of values within the organization. These include; reliability, informal communication, action and feedback from the employees. The workforce at the airline operates like a huge family whereby everybody has a sense of belonging and carries out his or her responsibilities timely.

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Despite having remained profitable since its formation the airline has recently suffered losses due to reduced passenger demand. The situation has also been compounded by increase in fuel costs and the weakening of the US economy due to the recent financial crisis in the year 2009.  The southwest airlines lacks international frights, morning frights and online communication (Gittell, 2003). The airline has also suffered from limited cargo capacity for freights. The Airline does not have adequate governance and has not prioritized its activities. The company has been slow in adopting new technology such as information technology which could have increased its efficiency.

The southwest airline has managed to develop a family like relationship within the organization. The activities within the organization are highly decentralized and everyone has been working hard to fulfill their responsibilities. These employees have shown high productivity, dedication and team work in dispensing their duties.

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With the current management challenges the airline must strive to remain competitive in the future. This is because there are economic challenges and an overall decrease in the number of passengers. There are a number of issues that can be addressed by the management to ensure that they remain competitive in the long run. The first change should be the restructuring of the organization so as to embrace IT within the organization. This will enable the organization initiate constant communication with its employees, business partners, shareholders and customers. Currently the airline does not offer reliable online customer support making it difficult to maintain constant communication with interested customers.  The online customer service support should offer chat services.

The airline should also restructure its services because in future it will be necessary to diversify its services. Currently the airline offers non-segmented flights which operate in the domestic market (Knol, 2002). There is need for innovation management within the organization so that there is diversification of the services offered (Shaw, 2007).  There is need for more services such as segmented flights, international flights and private flights. Diversification of services will ensure that the airline remains profitable even during difficult financial times. However development of these services should be done gradually to ensure that the company is able to adjust well to the changes. In order to diversify the services offered, the airline must also consider changing its management structure (Shaw, 2007). The management should remain decentralized to ensure that there is collective responsibility within the organization. The structure should be revised to allow for the formation of functional departments within the airline to ensure that the new services are well managed.

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The management must also strive to remain competitive in the long run. In order to gain a competitive advantage over other airlines, the company must aim at satisfying its customers. Currently the organization supports online booking of frights and a reward scheme for its regular customers. However this is not enough because a feedback mechanism needs to be created in order to evaluate the satisfaction level of customers.

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Customer satisfaction must be closely monitored and necessary changes must be effected to ensure that the consumers get value for money. The airline in the past has ratified code-share agreements with other airlines in order to carry out international flights. However these agreements have not been successful. The management has not been able to establish long-term partnerships with other airlines. The airline also acquires its planes from the Boeing Company becoming one of the few airlines to operate on a single type of aircraft. However the airline might also consider developing partnership with other types of aircrafts to ensure that it reduces its cost of operation.

Southwest airline is a reputable and profitable US domestic airline. The management of the airline is highly decentralized thereby giving the employees the freedom to operate independently. The airline needs to diversify its services in order to gain a competitive advantage. The leadership should also consider setting up other managerial levels to ensure that the new services are rolled out appropriately. The management also needs to use information technology to speed up communication among the employees and shareholders and customers. The airline must also adopt effective methods of evaluating customer satisfaction. Feedback from the customers must be taken seriously by the management to ensure that necessary improvements are made.

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