Profit Analysis of Southwest Airline

Southwest Airlines is based in Dallas and founded in 1971. They are known for their higher airfares and good customer services. (Elliot) The employees are known to be social with the travelers. They often times make changes and waive airline requirements. (Elliot) For example: “Robert Siegel and his wife scheduled a

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 has been making changes over the past few years that helped them become the largest low-cost carrier in the United States. Most other airlines have been struggling to make it through this economy, but Southwest has found a way to thrive. The airline has dropped their prices and eliminated fees for extras that have allowed them to fill up most flights. One cost they continue to struggle with is offsetting the increasing fuel prices. This has caused some airlines to merge or sell the company to competitors.

People – One of the many things good about Southwest Airlines is that the kinds of people who are heroes of the organization are people who care and go out of their way to help the customers. They’re the ones who are celebrated and held up as shining examples. Additionally, high levels of satisfaction among employees can be attributed to Southwest employee policy. Happy employees can provide high quality service and bring more customers back. To reinforce the culture of hard work, high-energy, fun, local autonomy, and creativity, the company provided continuous education program to employees. If you can help someone out or brighten someone’s day, be it a co-worker or a passenger, you’re doing your job well.

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' successful and profitable business model has been driven by several strategies: high aircraft utilization; standard fleet; charismatic leadership; low fare carrier; excellent customer service practice; attractive frequent flier program; innovative and creative marketing program; performance focused organizational culture; strategic human resources management and a lean operations.

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.

By giving low-cost tickets prices southwest airlines attract to a broad base of salaries and the best cost provider strategy. They also separate themselves from their rivals by being different, an example of a broad differentiation strategy and they have no assigned seats, no baggage fee for the first bag.

Southwest airlines began in 1971 using a strategy unlike any other airline at the time. Starting out in Texas, with only three planes, they flew between the Texas cities of Houston, Dallas, and San Antonio (Coulter, pg 250). Their primary goal was to get their passengers to their destinations, on time, at the lowest possible fares, and to provide a fun atmosphere for their customers. They focused on providing short-haul routes with fares that were competitive with driving. Today, Southwest serves 101 destinations across the United States, as well as eight additional countries, and operates more than 3,900 flights a day. (Southwest , 2017) They have achieved a record 44 consecutive years of annual profitability, while staying true to their goal of providing the highest level of customer service at the lowest fare. In 2016 they ranked number 1 in customer satisfaction according to statistics listed by the Department of Transportation, with and average passenger airfare of $149.09 one way trip. (Southwest , 2017)

Introduction Many organizations implement a strategic plan to grow their company or take a step towards success. The result of that plan is either efficacious or a failure. Southwest Airlines Corporation is no exception to the rule. Their success is based on a few key components that have kept them as a profitable company, with happy employees and customers.

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 has a great reputation of treating their passengers like family, often telling jokes and word games during the flights. Southwest also treats their employees very well, offering a wide range of perks and benefits. Southwest employees are routinely the highest paid in the industry.

Since the late of last century, the business model of low cost airline represented by Southwest Airlines has been spreading all over the world, has influence and changed the framework and development of the world airline industry.

Southwest Airlines began operations in 1971, and has remained profitable after 44 years. The company has experienced challenges such as high fuel prices, a recession, and even the tragedy of 9/11. Their strategy is unique and one-of-a-kind. They have innovated the airline industry by keeping costs low while not sacrificing quality or punctuality.

Southwest Airlines faced many barriers to entry from the fierce competition of other airlines in the industry. Though competition was fierce, Southwest Airlines managed to succeed by doing things differently. Their mission was to provide affordable air travel to those who would not normally fly. Contradictory to the rest of the airline industry, Southwest maintained a profit while keeping its fares low. Southwest was unique to the industry in two ways. They focused on the short haul traveler and used a point-to-point method of flight connections.