Southwest Airlines ' Hedging Activity For The Years 2000

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 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 original name was Air Southwest in 1967 in Dallas, Texas, before the change of the name to Southwest Airlines in 1971. They were faced with battles due to legal issues with Dallas and Love field, because of the Wright Amendment, but the come to an agreement to allow 4 states to connect to Texas. Southwest bought 129 new planes, because of the expansion of the company growth, which currently have 141 planes that enhance the growth of the company because of shorter flights (Gimbel, 2005). Southwest was started in 1971, by Rollin King and Herb Kelleher, which released it first flight from Dallas Love Field that is located in Houston and San Antonio Texas. The passengers look for an airline services that can get them to their destination at a cheap price. Majority of the passenger are looking for an airline service that will eliminate layovers and multiple stops as possible.

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.

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.

1. There are a few trends in the US airline industry. One is consolidation, wherein existing players merge in an attempt to lower their costs and generate operating synergies. The most recent major merger was the United Continental merger, which is still an ongoing affair, but has created the largest airline in the United States by market share (Martin, 2012). Another trend is towards low-cost carriers. In the US, Southwest has been a long-running success and JetBlue a strong new competitor, but in other countries this business model has proven exceptionally successful. The third major trend is the upward trend in jet fuel prices, and the increasing importance that this puts on hedging fuel prices and capacity management (Hinton, 2011).

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 Southwest Airlines has earned many impressive attributes over the years. The first would be the rise from a small market airline in Texas to becoming a top airline in the United States. During the 1970s, Southwest overcame legal troubles when Braniff and Texas International attempted to put the company out of business by way of harassment. In 2016 Southwest Airlines is larger than both previously mentioned companies. Another impressive aspect of Southwest is the personality and positive attitude former CEO Herb Kelleher brought in the 1980s.

Rollin King and Herb Kelleher originally incorporated southwest Airlines to serve three cities in Texas as Air Southwest on March 15, 1967. According to frequently cited legend, King described the concept to Kelleher over dinner by drawing on a paper napkin a triangle symbolizing the routes. (Dallas, Houston, San Antonio)

Southwest was founded in when a group of Texas investors, including Rollin King, M. Lamar Muse, and Herbert D. Kelleher, pooled $560,000 to form the Air Southwest Company. The fledgling airline began operations on June 18, 1971 (Southwest Airlines). Under the direction of President M. Lamar Muse, the airline offers six flights a day of back and forth between 12 flights of round trips daily between Dallas and Houston, Dallas and San Antonio. Tickets for round trip cost $20. So like any company this giant company started small before getting big.

Southwest Airlines was incorporated in 1967 and founded by Rollin King and Herb Kelleher. However, due to lawsuits, Southwest was unable to fly their first commercial flight until 1971. Southwest founded their business on the quote: "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 yourairline5." Southwest focused on a point-to- point operational system and a low cost pricing strategy that is currently used today. The organization is very centralized due to its point to point emphasis. The centralization of the company requires very strategic route utilization. The company for instance, selects routes to airports with low competition and overall traffic. This allows the company to be more price competitive as competitors are reluctant to venture into less travelled routes. In order to make decisions regarding these routes a centralized organizational structure is warranted. In addition to the centralized organizational structure of Southwest, many committees, teams, and task forces are designed with the sole purpose of reducing waste and cost control. The airline industry is predicated on cost containment, particular those related to fuel and other commodity prices. Task forces are designed with the purpose of providing a sustainable means of reducing costs without a corresponding decline in customer experience. The centralized

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.

Southwest airlines began in 1967 as a low-cost, low-fare, customer-friendly air service shuttling passengers between San Antonio, Dallas and Houston, Texas. Founded by Rollin King and Herb Kelleher, Southwest moved from a small commuter transport of 18 round trip flights within Texas to a bustling market share leader providing more domestic flights than any other airline within the industry. Within two years of its first flight the airline was able to report profits in a trend that has continued since 1973, despite industry downturns, economic recessions and intense rivalry attacks. No longer the quirky underdog, Southwest has established itself as the low-fare, low-cost industry