Maximizing Capacity Utilization as a Startup Premise

January 5, 2012

In stark contrast to other major airlines, Southwest has been profitable for 40 years. If Southwest had one core “startup premise” it was this: for every second the planes sat on the ground, their airplanes and people were costing them money but not generating revenue. So Southwest designed an airline from the ground up that maximized capacity utilization. They avoided the hub-and-spoke system that led to cascading delays.