Southwest Airlines Case Study

Southwest Airlines Case Study - Surname 1 Name Tutor Class...

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Surname 1 Name Tutor Class Date of submission Southwest Airlines Case Study Question One The Southwest Airline is one of the major airlines in the US established in the year 1967. Its business model is characterized by low costs and simplicity. According to an article in the economist newspaper, “America's largest discount carrier and its second-largest domestic airline in market share, just behind Delta Air Lines” (27). The airline is known to fly from point to point without flying everywhere. The Southwest Airline competitors operate through packed full hubs. With the point to point operation, the Southwest is able to reduce the number of employees that deal with interlinking other flights. This manner of operation also enables the airliner to avoid many gates hence a competitive advantage over their competitors like the United and American Airlines. The Southwest is also characterized by low fares and a simple price structure creating a competitive strategy. Their fares are priced at a level, 30 percent lesser as compared to the major competitors. This result into super normal profits the Airline. The low fare strategy enabled Southwest Airline to make continue making profits after the September 2011 attack as the airline rivals were slumping in losses.
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Surname 2 Another competitive strategy for the Southwest airline is the non-choice option for the type of aircraft. They only fly the Boeing 737 type of aircraft reducing the related costs. Such costs include; the maintenance, inventory and training costs. It also improves the efficiency of the flight scheduling with the non ticket policy where by one selects a seat depending on the time of arrival (Porter & Michael, 49). Accounting procedures associated with booking of seats are eliminated reducing operation costs. There is no customer amenities such as movies as well as meals offered while on flight increasing the competitive advantage for the southwest airline. The airline company does not hire the services of luggage handlers to the relevant airlines. This helps the company save on the costs hence increasing revenue at a low cost with a simple structure With the low cost and simple business model, the Southwest Airline is able to increase efficiency and still satisfy the wants of their clients. They are able to offer good time scheduling
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  • Summer '16
  • Dr. Willy
  • Low-cost carrier, Southwest Airline

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