I was reading that Southwest is one of the most profitable airlines in the US. I wanted to see if this was true so I pulled from Yahoo Finance the assets, market value, and profits for the largest five US airlines by market cap.
The bubble plot below plots out the five airlines by asset and profit, the color of the bubble is a color legend based on the return on asset (ROA) which is simply profits divided by assets. The size of the bubble is tied to the market cap. What stuck out to me was the fact that Southwest has half the assets of American Airlines but double the ROA!
What makes Southwest so unique and efficient where they can out earn the legacy airlines? After some research I learned some unique things about Southwest.
Southwest does not use the hub and spoke system of other major airlines, preferring the point-to-point system, combined with a rolling hub model in its base cities.
In 2007, Southwest modified its boarding procedure by introducing a number. Passengers line up in numerical order within each letter group and choose any open seat on the aircraft. According to a 2012 study by Mythbusters, this is 10 minutes faster than the standard method used by most airlines of boarding from the back frontward.
From what I gathered it seems that Southwest is a very efficient airline. I wonder if it's the same for their fleet. I compared the fleets between American and Southwest and what I saw was astounding. Not only does Southwest have more airplanes than American, but they operate only one model of airplane. The figure below shows that Southwest only has 3 variants of the same airplane, the Boeing 737, while American has six airplane models with multiple variants for each.
Southwest has flown 737s almost exclusively since 1971 and has credited the single aircraft with efficiency and scheduling simplicity over airlines that fly multiple airplanes from different manufacturers. This model has allowed the airline to save on training and maintenance (they would only need one type of simulator, and one common spare parts inventory), and to make skilled personnel such as pilots and mechanics essentially interchangeable, in case someone calls in sick or misses a connection.
Other interesting Southwest Airlines factoids:
While most U.S. airlines now charge passengers for checked luggage, Southwest continues to permit 2 free checked bags per passenger.
Regarding last-minute itinerary changes, Southwest also does not charge any change fees; passengers are permitted to change their flight as late as 10 minutes prior to their flights, and only pay the difference if their new flight is more expensive than the original flight (or receive a credit if the new flight is less expensive than the original flight).
According to the Department of Transportation, Southwest ranks number one (lowest number of complaints) of all U.S. airlines for customer complaints. Southwest Airlines has consistently received the fewest ratio of complaints per passenger boarded of all major U.S. carriers that have been reporting statistics to the DOT since 1987
Python skills: import Excel sheets, merges, if/then, plotly
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