The Southwest Airline Case Analysis Essay

968 WordsSep 26, 20164 Pages
In this memo, I will discuss the analysis process, results and my recommendations about the Southwest Airline case. Southwest was founded by Rolla King and Herb Kelleher in Dallas in 1966. The core of the business is to provide low-fare and short-haul flight service to their customers through low cost operation. By consistently focus on this core philosophy, Southwest has grown to become one of the largest airlines in the United States, competing with other major carriers including the Big Three – Delta, United and American Airline. Based on my analysis of the case, I discover that one of the biggest problems facing by the Southwest is the dilemma that whether they should maintain their focus on short-haul flight or they should alter their strategy to generate more revenue. To be more specific, can Southwest continue to be profitable under stiff competition if they stick with their initial focus. Southwest usually flies mainly to uncongested airports with less competitions; nevertheless, as they gradually expand to more busy areas, they are confronting with more competitors. If they provide short-haul flight service only, there is not much room for them to earn profits. Besides, another problem that Southwest facing is how they can reduce cost since their operating costs continue to rise. Labor and fuel are inevitable for Southwest’s operation. However, as the cost of both continues to grow, Southwest’s cost advantage comparing with other airlines will get narrower,

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