Southwest Airlines - Assignment Report

2953 WordsJun 7, 201012 Pages
Company Overview Task One Introduction No-frills airlines usually focus on low-cost strategies in every aspect of their business. The low-cost strategies can be implemented by applying various factors, such as using one type of airplane, using secondary airports with short flights, point-to-point transit with simplified routes, speedy turnaround times and assigning multiple roles to staff in order to reduce the labor cost. These types of strategies let you play a win-win situation because once the cost is reduced; it benefits the passengers as well as the company itself. But in real time, it is not necessary that every low-cost carrier airline will apply all the above mentioned strategies, still they can achieve better results due…show more content…
The following income statement shows the past three year’s trend of Southwest’s Profitability: SOUTHWEST AIRLINES INCOME STATEMENT All numbers in USD $ thousands Source: http://finance.yahoo.com/q/is?s=LUV+Income+Statement&annual Potential Resource Weaknesses and Competitive Deficiencies: a) Single Producer Dependability: One of the weaknesses is their dependability on one producer of Boeing 737 i.e. Boeing Commercial Airplanes. Since Southwest only uses a single type of aircraft, therefore this is one of the weakest areas for Southwest. Southwest will be directly affected if anything goes wrong with Boeing Commercial Airplanes. b) Inconvenient Booking: Flights booking become difficult at times because it is hard to find agents and everyone does not know the use of internet. c) Business Class: Southwest focuses only on Economy Class and they narrowed down their seating as well to increase the capacity of seats in the cabin. This strategy losses a large market of business class customers who can pay better rates. Large airlines get benefits of the Business Class Customers whereas Southwest completely misses out this sector. d) Multi-Country Coverage: Southwest only provide travelling facility within the United States. They do not travel internationally. Therefore Southwest Airlines is missing out a large market for international travelling. e)

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