Case Study Of Southwest Airlines

United Airlines and Continental Airlines, two major airlines companies, agreed to a merger that would create the world’s largest airline. Such important deal has a lot of problems to be dealt with, from technical, for example how to put the companies databases together, to more fundamental, like how the company should be ruled.

This proposal addresses the needed steps to be taken in order for Southwest Airlines to see continued growth in the airline industry. Southwest Airlines has been able to remain one of the most profitable airlines in the industry for an extended period of time. Even with the hindrance of the 2001 terrorist attacks involving airplanes and the U.S recession of 2008, Southwest has continued to see strong revenue growth. Meanwhile, other companies were experiencing major losses and in some cases folding. Southwest Airlines has capitalized on the company’s strength of being the top low cost

Past fuel spikes and attendant recessions have brought about widespread hardship in the airline industry. As analysis shows, airline profitability suffers as a direct consequence of a weakening economy. During the first Gulf War, almost half of the major airlines filed for protection under Chapter 11 of the Bankruptcy Code,

In Southwest 47th year of service, this Dallas-based airline company continues to distinguish itself from other airlines with model customer service provided by the hands of numerous employees to millions of its passengers. Southwest is well on its way to becoming the nation’s largest airlines and maintains one of the top ranking airlines based on the U.S. Department of Transportation’s. Although, with this being said is true that a company main purpose is to make a profit. Southwest Airlines has a winning formula for making a profitable business and maintaining happy customers. With this being said is it more important to make money or build the customer base.

In 1946, American Airlines established its maintenance and engineering bases in Tulsa, Oklahoma. In 1953, American Airlines pioneered nonstop transcontinental service across the across the U.S. with the Douglas DC-7. During 1957, American opens the world’s first special facility for flight attendant training, the American Airlines Stewardess College, in Dallas/Fort Worth. During January 1959, American Airlines introduces the Lockheed Electra, which is the first U.S.-designed turboprop plane. On December 3, 1964, American Airlines hires Dave Harris, the first African-American pilot for a commercial plane. In January 1970, American Airlines merged with Trans Caribbean Airways, gaining Caribbean routes. In 1974, American Airlines released their one-step automated check-in system, greatly increasing efficiency within the company for checking passengers in and getting them on to the correct planes. Then in 1975, American Airlines began marketing SABRE (Semi-Automatic Business Research Environment), which is a computer reservation system that was developed to automate the way American Airlines booked their reservations to traveling agencies in the U.S. After this, in 1979, American Airlines relocated their headquarters from New York City to Dallas/Fort Worth Texas, where it still resides today. On May 1st, 1981, American Airlines introduces AAdvantage®, the first airline loyalty program. On August 1st, 1983, America Airline West commences operations in Tempe, Arizona.

Southwest Airlines (SWA) as described in the above section was an impressive organization with a long history of success; however, SWA’s performance had slipped over time as the company had not earned a “Triple Crown” since 1996. The case study, “Southwest Airlines in Baltimore,” offered a detailed look at the Baltimore Washington International Airport (BWI) in an effort to analyze challenges facing SWA in maintaining their core strategies and their continued dominance of the airline industry. BWI played an important role in the SWA system as it was one of SWA’s eight “mega-stations”, categorized because it offered more than 100 flight departures per day. It was also the central hub for SWA on the East Coast and had seen an explosion of growth in both total passengers and percentage of those passengers connecting through BWI in the past few years. BWI’s operational performance consistently lagged SWA’s system-wide average, continued to deteriorate, and with continued growth planned was a major concern throughout the organization. With the planned growth projected by management, BWI’s gates would reach capacity limits later in 2001 and BWI’s bag sorting area had already reached its capacity (Oliva & Gittell, 2002). BWI was planning to renovate Concourses A and B to provide more gates for SWA; however, SWA also took action and assigned Matt Hafner, a seasoned station manager, to attempt to elevate the operational performance of BWI. Our group was tasked with analyzing

. Originally the company name was Air Southwest Company, which started on March 15, 1967, by Rollin King and Herb Kelleher. “They began with one simple notion: If you get your passengers to their destinations when they want to get there, on time, at the lowest possible fares, and make darn sure they have a good time doing it, people will fly your airline” ( Southwest Airlines, 2017). King and Kelleher’s also had other intentions, for instance, to fly within the state of Texas without being required to pay federal regulations while undercutting its competitors' prices. The airline would find themselves in litigation for the next 4 to 5 years until they are able to prove their cases merit which was finalized in1970 by the Supreme Court. Consequently, after winning their case on March 29, 1971, Air Southwest Co. changed its name to what is now known as Southwest Airlines Company.

American Airlines operates as an air carrier providing scheduled air transportation services for passengers, cargo, freight, and mail services. It was founded in 1934 and is headquartered in Fort Worth, Texas with hubs in Charlotte, Chicago, Dallas/Fort Worth, Los Angeles, Miami, New York, Philadelphia, Phoenix, and Washington, D.C. The company employs 124,300 employees and serves approximately 140,000 passengers a day with 6700 flights per day to 350 destinations (American Airlines).

8.1.2 Strategic risk. The position of the company within its environment is of great importance. Due to the competitive nature of the airline industry, many companies must develop new adaptive and innovative strategies to be progressive in the market. In relation to our internal report, the core strategy of American Airlines is stimulating growth through increased regional and international capacities within the limits of the firm’s contribution target and its consolidated net income. The emergence of low cost carriers has a profound impact on the company and the airline must continue to reshape its strategies and business model to compete with rivals. The company continues to reach customer through new and expanded routes and flight schedule, however to maintain viability American Airlines must ensure that it has adequate facilities in these new markets by obtaining adequate operational areas. Furthermore, operating in Beijing, London, Paris Tokyo and other international airport outside the U.S. has its constraint and are regulated by local authorities pursuant to IATA Worldwide guidelines (American Airlines 10-K, 2017). The company continues to devise more strategic perspectives that are cost effective such as the partnership with codeshare operators. Relying on code share agreement can expose the company to risk and liability, since the airline would bear some responsibility if one of partners through these established alliance and agreement is involved in an accident or

Instructor Case: Southwest Airlines in 2010 Dr. Deb Sircar University of Greenwich Business School http://create.mcgraw-hill.com Copyright 2012 by The McGraw-Hill Companies, Inc. All rights reserved. Printed in the United States of America. Except as permitted under the United States Copyright Act of 1976, no part of this publication may be reproduced or distributed in any form or by any means, or stored in a database or retrieval system, without prior written permission of the publisher. This McGraw-Hill Create text may include materials submitted to McGraw-Hill for publication by the instructor of this course.

The airline industry has been around for years, it has suffered its ups and downs due to attacks such as the one that occurred in September 11, and even most recent as the Paris attack that occurred this past year. Major Airlines have suffered a decline in their profitability which has forced many airlines to file for bankruptcy. However, when bad times hit an industry some companies are forced to quit, while others are forced to change their strategy and continue moving forward.

With every organisation wanting to expand their reach and make an imprint in various markets, there will be enough external opportunities, strengths, etc for it, to make an impression. At the same time, there will also be threats, competitions, political, economic hurdles, etc, in the external environment, which could impede its functioning as well as restrict it from fulfilling the customers optimally. This problem in the external environment could affect any industry sector as well as organisations, and so the Airline industry is no exception to it. Airline industry on the whole and many airline companies, both the traditional carriers as well as low budget

I believe that the overall competitive strategy of a company is more than the sum of its functional strategies. There are, however, both good and bad associated with that feature. On the one hand, such a connection makes it difficult for others to imitate a company’s successful actions and, therefore, can give a company a sustainable advantage. On the other hand, those same links can make it difficult for the company to shift its competitive posture in response to the changing or changed realities underlying economic activity.

An airline operator invests an enormous amount of money to start, run its business and get established in the market. However, the success comes only after the airlines runs smoothly over a considerable period of time. If the strategy fails during the bad times, it may result into bankruptcy for the operator, loss of jobs for the employees and a liability to the government.

The September 11 attacks left a major impact that the airline industry is yet to recover from. Extended recession and increasing oil prices are the other major factors affecting the growth of the airline industry. At this scenario, the airlines operating with unoccupied seats make huge losses and sometimes the airliner even goes bankrupt; for instance, the kingfisher airlines in India has gone bankrupt due to failure in managing the unoccupied seats and inefficient management in their ticket pricing strategies. Even the recent disappearances of aircrafts from Malaysian airlines have unfavorably affected the global airline industry leaving airlines operating with vacant seats.