CORPORATE CASE STUDY: Southwest Airlines keeps PR course with flying colors

From a new reality TV series to its union negotiations, low-cost carrier Southwest Airlines keeps a key stakeholder group - its employees - on its radar at all times.

From a new reality TV series to its union negotiations, low-cost carrier Southwest Airlines keeps a key stakeholder group - its employees - on its radar at all times.

Southwest Airlines threw big employee parties on January 5, though they're nothing unusual for the low-fare carrier, where managers keep confetti close at hand. The subject of the celebration, however, was something daringly different - the debut of Southwest's own reality television show. A&E's documentary-like Airline offers an unfiltered look at the workaday lives of Southwest staffers and their customers in Chicago and Los Angeles. Management took the calculated risk of granting a film crew access to its terminals because it wanted to showcase what the company values most - employees and good customer service. The corporate culture at Southwest remains legendary. Chairman and cofounder Herb Kelleher and the airline's traditional underdog persona are key ingredients to the company's esprit de corps. But Southwest is no longer an underdog. In fact, it's the only consistently profitable airline since September 11. Yet with 35,000 employees, and with Kelleher keeping quiet lately, corporate culture remains largely intact, albeit with a few signs of wear. Pioneer positioning Industry experts predicted that Southwest's employee relations would falter when the company got too big, says Dr. Adam Pilarski, SVP of Avitas, a Washington, DC-area airline analyst firm. "All businesses follow three major constituencies - employees, customers, and financial backers," he says. "Southwest has consistently said if you do the first, keep employees happy, they will make customers happy, and that will bring results - and by golly, it works." The underdog mentality dies hard, though. On Southwest's website, for example, Kelleher explains that it won't sell tickets through Orbitz because five of its competitors own the online reservation site. PR staff realize, however, that they can't paint Southwest as David forever, especially when its books reveal the black ink of a Goliath. Amid competition from upstart imitators and newly branded, low-fare subsidiaries of traditional airlines, Southwest positions itself as a leader, a pioneer, even a missionary in affordable air travel. "We are the reason people who used to just fantasize about it can fly in this country," says senior PR director Ed Stewart, noting that few low-fare carriers choose to compete with Southwest head-to-head in the airports it serves. In fact, Southwest remains far larger than other low-cost airlines. "They consider JetBlue sort of this cute little relative," says one aviation reporter. Subtly digging at Ted, United's new lower-cost subsidiary, Stewart says, "You can call yourself Ned or Fred or anything else, but you can't duplicate the kind of people we have here at Southwest Airlines." The boisterous Kelleher, of course, is the person most intrinsically associated with Southwest. He and partner Rollin King founded the Dallas-based company as a Texas intrastate carrier. Southwest had to fight competitors in court first to get off the ground, then to fly any further than Little Rock, but when it launches service to Philadelphia in May, it will serve 60 cities in 31 states. Kelleher's gregarious personality and personal touch helped keep the highly unionized workforce happy, but he eventually ceded his CEO and president titles to longtime lieutenants Jim Parker and Colleen Barrett, respectively. As Southwest celebrated its 30th anniversary in June 2001, its two new leaders afforded double the PR opportunity. The airline's PR team focused on positioning Parker - formerly the company's general counsel - as a business and financial expert. Barrett, who began as Kelleher's legal secretary and became a torchbearer of Southwest's culture, focused on people issues. September 11 cut their introduction period short, but by the time reporters began writing about things other than terrorism, Parker and Barrett had already become well-established leaders. Meanwhile, Kelleher keeps an intentionally low profile and devotes most of his time now to public affairs issues. "When you have Herb walking through the room, his shadow is so much bigger than everyone else's," says Stewart. "To his credit, he recognized that. He's very selective about when he comes out." Kelleher, who grew up near Philadelphia, made an appearance when Southwest announced plans to serve that city, its first new destination since 2001. Those who argue that a strong culture requires a charismatic leader wonder whether Southwest's will survive Kelleher. Change is inevitable, but executives like Barrett keep the culture ingrained, notes Dallas Baptist University management professor Dr. Dave Arnott, who featured Southwest in his book Corporate Cults: The Insidious Lure of the All-Consuming Organization. "Certainly, compared to any other organization in America, I think they have a more carefully refined and more narrowly defined culture," Arnott says. The show goes on Keeping employees happy, however, may be getting a bit harder. Mediation talks continue with its flight attendants union, which hired its own PR firm and undertook a humor-tinged informational picketing campaign during the summer. Southwest weathered tense union negotiations before and probably will again, says Chicago Tribune journalist John Schmeltzer. "They are going to have a harder time going forward," he says. "As pilots and flight attendants age, they are going to expect more.... As [Southwest] ages, all of a sudden it becomes a legacy airline." Unlike some other airlines, however, Southwest doesn't portray its unions as adversaries. "We want a contract as soon as possible because we believe our flight attendants deserve a pay increase," corporate communications VP Ginger Hardage said after union members shoved flyers under guest-room doors in a hotel where she was speaking. Early episodes of Airline, however, reveal no hints of employee/management friction. In one, three bubbly flight attendants entertain passengers with songs and games on a flight to Las Vegas. Other subjects include smelly, overweight, drunken, and/or disgruntled passengers. Viewers may sympathize with customers instead of employees in a few segments, but the overall depiction of Southwest is positive. Granada Productions, the British company that brought English viewers the original Airline series, were spurned by larger, transcontinental air carriers before reaching an agreement with Southwest for A&E's new US version. But Southwest had reservations as well. "It came pretty close to ending up in file No. 13," Stewart says. The company signed on because the project got positive marks from easyJet, the low-cost British airline featured in the long-running UK program. Southwest doesn't pay or get paid for its participation in Airline, and the crew is allowed to film anything the Transportation Safety Administration allows. Southwest's PR staff sees the rough edits and may correct any factual errors in voiceover scripts, says PR director Linda Rutherford. Ten half-hour episodes initially were slated, but A&E liked the initial footage so much, it ordered another eight. PR staffers served as escorts for the crews but stayed clear of the cameras. Stewart says they almost had too much fun. "We had a hard time getting our escorts back here to Dallas," he notes. "They wanted to tack on extra days." Southwest's decision to grant the film crew open access floored industry observers, but it illustrates a level of openness that reporters say the airline has always displayed in providing information and access to executives. While most agree the show is a PR coup for Southwest, early reviews of the program's entertainment value were mixed at best. The New York Times panned it, and Variety reviewer Phil Gallo called it "half infomercial, half training tape." "It's not going to become the next Seinfeld, which was also a show about nothing but kind of funny," predicts Pilarski, who thought Airline lacked a necessary element of drama. Regardless of whether the series' US version survives its first season, the program is already a hit with Southwest's PR staff, among others. "I can't count the number of companies that would love that kind of exposure," says the Tribune's Schmeltzer. ----- PR contacts Corporate comms VP Ginger Hardage Senior PR director Ed Stewart PR director Linda Rutherford Employee comms director Tracie Martin Director of legislative awareness Susan Goodman Senior IR director Tammy Romo Governmental affairs VP Ron Ricks

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