The Southwest is a leading American air service and is the largest low-priced service provider with the base in Texas. The airline came to existence in 1976 and its name became Southwest in 1971. According to an overview in 2014 the company has around 45k employees and around 3.4k flights are operated each day.
One of the major weakness that the airline has is limited international flights. Only recently Southwest start offering international flights to Mexico,
Southwest Airlines was incorporated in 1971 and started its operations with three Boeing 737 aircrafts for three cities of Texas, namely Huston, Dallas and San Antonio. Southwest Airlines earned six Triple Crown awards for the month in the years 1988, 1992, 1993, 1994, 1995 and 1996. It is making profit for last thirty two consecutive years (Carter, Rogers, & Siskins, 2004).Moreover Southwest Airlines is a success story of point to point low cost carrier of United States covering 97 destinations in 42 states with a fleet of 550 Boeing 737 aircrafts and operating 3200 daily flights. Acquisition of AirTran Airways in the year 2011 was also a landmark achievement for the airline. However Southwest Airlines does not offer the traditional services of food on board and special lounges on the airports, none the less it is well placed in the aviation industry (Southwest Airlines). The business is well known for their strategy and approach in hiring capable employees as well as
Despite historic successes, Southwest Airlines is facing certain challenges threatening future financial security. Firstly, Southwest’s traditional competitors have formed strategic mergers with other carriers, increasing their efficiency and lowering costs. These mega-mergers include Delta/Northwest, Continental/United, and American/US Airways. Secondly, smaller companies such as JetBlue, Alaska, and Sprint have been able to enter the industry successfully and are directly competing with Southwest’s low-fare focus. Lastly, though Southwest has been praised in the past for being innovators in embracing technology and automated processes, its lack of updating to the newest and more efficient technologies are a cause of concern according to some customers and critics.
They serve no meals, do not offer seat assignments, and do not baggage to other airlines. They avoid airports with high landing fees or frequent delay. All of this enables them to make quicker turns and fly more legs each day, resulting in lower fares. Today they are without question the most successful airline in America-if not the world.” (p.8, 2002)
Today Southwest Airlines is the biggest domestic passenger carrier in the United States of America operating more than 3,400 flights a day. They provide service to 93 cities and 5 countries internationally. Last year Southwest Airlines, “Enplaned approximately 136 million Customers (About Southwest). The airline has grown since it’s first years flying out of Love Field in Dallas, Texas. In the beginning, Southwest provided flight service to only three Texas cities in 1971. One of Southwest Airlines’ early advertisements was a double page ad that ran in Dallas newspapers during May announcing their first flight on June 18, 1971 (Lusk). This advertisement introducing a new airline would soon revolutionize the airline industry and create the new category, of low cost carrier, to the world.
When looking at the elasticity of demand Southwest is extremely impacted by the elasticity of demand. Items such as externalities, unemployment, inflation, and monetary, fiscal, and federal policies affect the elasticity of demand. The elasticity of demand is based solely on current market conditions, the customer’s purpose for travel, and available substitutes. The airline industry is viewed has being unstable because it is based on current market conditions, and the market is always changing.
Southwest Airlines has recently acquired AirTran Airways, which was a global company, this acquisition it put Southwest in a great spot to expand to the global market. Southwest is integrating the AirTran Airways international stops in Aruba, Jamaica, the Bahamas with their original domestic stops in Atlanta, Baltimore, and Orlando starting July 1st 2014 according to an article in US Today. Next they are looking to service 6 Latin American destinations including Belize City, Cancun, Mexico City, Puerto Vallarta, and San Jose del Cabo/ Los Cabos starting in October 2015 (Zacks Equity Research, 1-2). These Latin American destinations are strategic because they are close to Southwest’s headquarters in Dallas TX, and they are prime vacation spots (Jones, 3). This will give more people a cheaper way to vacation, and bring more people into these
Currently, Southwest Airlines Company achieved the higher net income in 2013 and widened its field of operations by the integration with AirTran Airways. It seems Southwest’s business is going pretty well. However, there are numerous problems from competitors who will cause negative effect on Southwest’ market leader position and market shares. This marketing plan will make a careful analysis of the current activities of Southwest Airlines Company, and then this marketing plan will create how the company develop Southwest’s market leadership and higher market shares within 5years.
Southwest Airlines was founded by Rollin King and Herb Kelleher and began in 1971 as Air Southwest, servicing Dallas, Houston and San Antonio (AvStop Online Magazine, n.d.). In its rich history, Southwest Airlines has had many “firsts” in the airline and transportation industry. The airline carrier was the first airlines to offer frequent flyer miles program, which is also the most generous program in the industry (Parnell, 2014). Alongside of the frequent flyer miles, Southwest also offer senior citizen’s discount, fun fare and fun packs, “wanna get away” discounts, no assigned seats, and the most popular two bags fly for free (AvStop Online Magazine, n.d.). One of Southwest major accomplishments is having consecutive profit years since its
Every company go through challenges. It is part of the game. The key to this situation though, is to know how to turn a weakness in to a strength, or a threat in to an opportunity, and gain all the positives that a company can get. Most of the times people do not understand that a company needs these challenges to develop in a better corporation. It is impossible for a business to grow and improve without difficulties. That being said, Southwest Airlines has multiple challenges, but the company is whilling to change these weaknesses in to strengths.
Southwest Airlines has humble roots, which began in 1971 when the entire operation consisted of three Boeing 737 aircraft that traveled between three Texas cities. Today, the firm serves 96 destinations in 21 states and boasts a fleet of 550 aircraft (Cederholm,
Southwest Airlines was originally named Air Southwest. It was started on March 15, 1967, by Rollin King and Herb Kelleher. Southwest Airlines is an American low fare airline based in Dallas, Texas. It is also the largest airline in the United States by number of passengers carried domestically in a year and the third largest airline in the world by number of passengers carried. Southwest is also one the most profitable airlines in the world posting a profit for 34 consecutive years.
There have been few inventions to change how people live and experience the world considerably as the creation of the airplane. Today, traveling by air has become the norm and it would be difficult to imagine life without it. Air travel has improved the way people are able to conduct business by shortening travel time and changing their thought of distance. The companies within the airline industry exist in a very competitive market. One of those companies, Southwest Airlines, features low-fare, no-frills air service with frequent flights of mostly short routes. Costs are kept down by the exclusive use of Boeing 737 aircraft, which allows for low maintenance costs and quicker turnaround times for flights, and by an emphasis on ticketless travel (Encyclopedia Britannica). This paper will address two segments of the general environment and how they affect Southwest and the airline industry; evaluate how Southwest has addressed two forces of competition; predict what Southwest might do to improve its ability to addresses these forces; assess the external threats affecting Southwest; discuss Southwest’s greatest strengths and most significant weaknesses; determine Southwest’s resources, capabilities, and core competencies; and analyze their value chain.
Southwest Airlines Company (Southwest Airlines or ‘the Company’ SWA) is a passenger airline that provides scheduled passenger and freight transportation services. The Company primarily provides scheduled services throughout the US and near-international markets. It is headquartered in Dallas, Texas and employs 48,000 people and serves over one hundred million customers annually (“Southwest,” 2015). Southwest Airlines has accumulated over forty years of revenue and is one of the supremely flown airlines in the United States of America (Dess, et al, 2014, p. C137). Recognized for dominating the national or domestic airline market, Southwest Airlines’ diligence has built an