The functionality of its website along with its moves

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the functionality of its website, along with its moves toenhance aircraft interiors with leather seats, can hardly bedescribed asnotbeing motivated by competition.17To further control expenses, Southwest reconfiguredits cabins, reducing legroom to squeeze in six extra seatson every plane in its fleet. In December 2011, Southwestsigned a deal with Boeing for 208 Boeing 737 Max jets for20142013201220112010Load factor82.5%80.1%80.3%80.9%79.3%Average length of passenger haul (miles)978966941939885Average aircraft stage length (miles)721703693679648Trips flown12,55,50213,12,78513,61,55813,17,97711,14,451Average passenger fare$159.80$154.72$147.17$141.90$130.27Passenger revenue yield per RPM (cents)16.3416.0215.6415.1214.72Operating revenue per ASM (cents)14.213.5813.3412.9912.3Passenger revenue per ASM (cents)13.4812.8312.5612.2411.67Operating expenses per ASM (cents)12.512.612.8512.4111.29Operating expenses per ASM, excludingfuel (cents)8.468.188.077.737.61Operating expenses per ASM, excluding fueland profit sharing (cents)8.198.017.987.657.45Fuel costs per gallon, including fuel tax$2.93$3.16$3.30$3.19$2.51Fuel costs per gallon, including fuel tax,economic$2.92$3.12$3.28$3.19$2.39Fuel consumed, in gallons (millions)1,8011,8181,8471,7641,437Active full-time equivalent Employees46,27844,83145,86145,39234,901Aircraft in service at period-end665680694698548Source: Southwest Airlines. SEC filings, Form 10-K,.EXHIBIT 2Continued$19 billion.18The Boeing 737 Max jet will seat up to 200passengers (11 more than the current 737 model), and thepassengers may lose another 2 inches of legroom. The 737Max will provide 20 percent better fuel efficiency per seatcompared to the second most fuel-efficient jet.19In 2007, a new fare structure was introduced that includedBusiness Select, which gave customers the option of priorityin boarding.20With a new $40 fee that allowed customersto be among the first 15 passengers to board the plane, thisnew fare structure was definitely targeted at wooing someof the business travelers who wanted a little more than nofrills. However, with this move, Southwest managed to irri-tate some of its most loyal customers.21While Southwestcontinued its bags-fly-free policy, which had contributed toincreasing its market share, Kelly declared “Never say never”when probed about his company’s plans to start chargingbaggage check-in fees in 2013.22Southwest introduced anin-flight entertainment portal with free live and on-demandtelevision, offering 20 live channels and 75 television epi-sodes from popular series. It also introduced Internet accessfor $8 a day per device on Wi-Fi-enabled aircraft.23In another significant departure from standard policy,Southwest abandoned its organic growth strategy anddes78212_case04_007-013.indd106/30/1512:13 PMFinal PDF to printer
CASE 4 ::SOUTHWEST: IS LUV SOARING?C11acquired AirTran Holdings Inc., the parent company ofAirTran Airways (AirTran), for a combination of $1.4 bil-lion cash and Southwest Airlines common stock.

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Term
Spring
Professor
AlanB.Eisner
Tags
Business, Love Field

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