Southwest Airlines Case Analysis Essay

Southwest Airlines Co., established in 1971 by Rollin King and Herb Kelleher, began its operations with only three Boeing 737 aircrafts. It is headquartered in Dallas, Texas(Hawkins, Misra, & Tang, 2012). Southwest is well known as one of the largest low-cost carriers. With this strategy, the company has dramatically grown up and deeply rooted in the US airline industry. Now, Southwest Airlines Co. operates 633 aircrafts to 93 domestic cities and the highest number of passengers used Southwest Airlines to fly around U.S in Jan 2014 (Hawkins, Misra, & Tang, 2012). To accomplish more than 40th consecutive years of both profitability and competitiveness, Southwest Airlines Company is constantly trying to find the routes to differentiate itself from other domestic carriers (Hawkins, Misra, & Tang, 2012).

Southwest Airlines Co. is an airline company that offers air transportation services within the United States and in international markets. The company operates within the airline industry that is highly regulated, technology intensive, labor intensive, and highly competitive (Southwest Airlines, 2017). Southwest Airlines operates a service business whereby the company offers a point to point air transport service to its passengers. Other than passenger transport, the company offers transportation services for pets and unaccompanied minors. The flights offered include short haul and long haul between various destinations within the United States and internationally. In 2016, the company’s operating revenues from international operations amounted to $383 million. A unique feature of the Southwest Airlines is its cost structure whereby the company focuses on cost discipline and uses one aircraft type to minimize costs.

Southwest Airlines was formed in 1967 by Rollin King and Herb Kelleher and started service in June of 1971. The airline is headquartered in Dallas, Texas and originally operated flights within the state of Texas. The company has since expanded and now operates flights from Dallas to almost all major cities in the United States and is considered the largest low-cost carrier in the country. “Southwest seeks to offer a travel product that is built around flights targeted to specific demographics and ticket pricing that is simplified so that passengers know

Southwest Airlines is a major US airline established in 1967 that services a multitude of cities in all 50 states and beyond. The company is known for its outstanding quality in providing services and it 's cost effective ticket prices to its many passengers throughout the nation. This airline is based in the southwestern United States, in the city of Dallas Texas, and due to the tremendous number of airplanes that it has and the timely service that it provides to its passengers, this airline services more US passengers than any other airline. This airline also has the largest fleet of planes of any economical or low-cost airline service in the world and employees more than 45,000.

Southwest Airlines (SWA) maintained a low-cost, low-price and no frills strategy. The small Texas carrier began as a concept, its business plan detailed on a cocktail napkin in 1971 and grew into the nation’s fourth largest airline. Known as an innovator with low operating costs, dominating smaller airports, with a humorous customer service, SWA saw its 40th profitable year in 2013. Like all companies, SWA underwent leadership changes in 2001, and said goodbye to the company’s founder in 2008. Unfortunately, the changes in leadership were not the only changes; the organization proceeded to alter their beliefs and activities.

In 1986, Southwest celebrated 15 years of low fares, good times and high spirits! Fun Fares were introduced with over 13 million passengers having flown Southwest. In 1987, Southwest celebrated the sixth year in a row as the recipient of the Best Consumer Satisfaction record of any continental U.S. carrier. The prices of Fun Fares were reduced by up to 25% and Weekend Fun Packs (which includes round trip airfare and hotel) were introduced. By doing it smarter, Southwest Airlines does it faster, cheaper and has more fun than any other airline! In 1988, Sea World of Texas and Southwest teamed up to promote the State of Texas as a major tourist attraction. Through the "New Friends" campaign, Sea World of Texas named Southwest as its official airline and

Southwest Airline was from an idea on a napkin between Rollin King and Herb Kelleher. Eventually, after a few regulation issues, the airline became official on focusing point-to-point travel between Dallas, Houston, San Antonio. One of the early key success factors which stated in the case, “ In contrast to larger airlines servicing the cities through connecting interstate routes, Southwest would fly directly to each of the cities, and the flights would take roughly one hour each.” Not only Southwest has the advantage of time but also the trust on safety from frequent flyers by having a direct flight to each city. Likewise, within two years (1971-1973) due to price segmentation based on the time of before and after 7 PM along with weekends, the company became profitable.

On October 1st, 1994 when United Airlines introduced their “Shuttle By United” high-frequency, low-fare, minimal amenity, short-haul flight operation, Southwest Airlines was already the industry leader in this market segment. Southwest was the eighth largest airline in the United States based on the number of passenger miles flown

Southwest Airlines is a passenger airline company that arranges and provides scheduled flights for passenger and transportation freight services. The company mainly provides, low-fare, point-to-point services all over the US and near-international markets. The headquarters is located in Dallas, Texas and as of December 2014, the company employed over 46,278 people. The company was founded by Rollin King and Herb Kelleher in 1971. Southwest was the first airline to introduce the frequent mile program. This took place in the mid 1980’s. This type of program allowed passengers to add up traveled miles to use later as credit on a future airline ticket. The traveled miles would add up and would also reduce the price of a ticket. Southwest created the idea of senior discount, fun fares and the fun packs. These were perks that attracted people from different age groups. When Southwest originally was incorporated, the idea was to operate in three cities in Texas, but after taking over Morris Air and TranStar in 1987, this gave them a cutting advantage in the airline industry.

Southwest Airlines Co. began its operations in 1971 and has been serving the industry for the past 43 years now (Southwest Airlines, n.d.). It is the major domestic airline, and ranked number one in 2014 by the Bureau of Transportation Statistics (United States Department of Transportation, 2014). Back in 1971 the airline began its services in Texas in the cities of Houston, San Antonio, and Dallas. The company has been ranked as the nation's largest low cost carrier (Mergent, 2012). It offers the lowest fares, and has the lowest cost structure in the industry.

Southwest Airlines is excellent in planning out their long-term goals. The above SWOT analysis proved that the company is successfully carrying out the cost leadership strategy to manipulate their competitors and boost up their company. Their mission in providing Low Fare cost is one of the best strategy that they can have to increase their market share, but not just that it also put a significant increase in the demand of air travel. Southwest Airline rapid rewards program is brilliant, so they should continue and expand it even more.

2008: More people were flying Southwest than any other U.S. airline and they were the only U.S. Air carrier that was consistently profitable and had been since 1973. Southwest did not choose to use a la carte pricing like other airlines; they stuck with an all-inclusive fare. Mission statement was revised to highlight customer

Southwest wanted to stress the importance of low operating costs. To do this they implemented many strategies. They operated only one type of jet—Boeing 737s. This minimized their spare part inventories, cost them less to train maintenance and repair personnel. They were also the launch customer for Boeing 's 737-300, 737-500, and the 737-700 jets, and this enabled them to receive a big discount. They incorporated ticketless travel and save the

Customers are part of the process and taking their roles willingly. For distribution of tickets, initially commission was given to travel agents but later Southwest implemented a “ticketless” (paperless) travel program and later the development of Southwest.com as a means of using the internet to sell travel directly to customers. Southwest was a true pioneer in utilizing the internet, first establishing a website in 1995. This lowered distribution cost.

Southwest Airlines was created in the late 1960’s by a businessperson Rolling King, and law school graduate Herb Kelleher, who sought a faster travel time between Houston, Dallas, and San Antonio, Texas (Dess, et al., 2014, p. C137). After overcoming all of the antagonism and legal problems of many major airlines, Southwest was able to take its first flight in 1971 (Dess, et al., 2014, p.C137). With a dedication and will power to grow the company, King and Kelleher sought out ways to increase growth.