Southwest Airlines Fuel Fluctuation

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While economic recession can reduce traveler’s willingness to travel due to lower disposable income, Southwest Airlines’ business strategy to offer everyday low prices provide travelers economic travel options. SWA is known for its cheap airplane tickets, which enables the airlines to absorb market share from other big airlines, such as United Airlines and Delta Airlines.
Due to high dependence on fuels, airline industry is highly susceptible to fuel prices. Between 2009 and early 2014, price of jet oil has more than doubled (infomine, 2014). In order to combat the rising fuel prices, Southwest Airlines has taken initiative to make their airplanes more fuel-efficient in order to maintain low cost tickets. For example, SWA “installed winglets …show more content…

The airliner collaborates with various national and local charitable organizations to demonstrate their commitment to helping different communities thrive. Thousands of employees give up their time to advocate for the causes they believe in most. In 2013, Southwest employees have spent over 144,000 volunteer hours to help the community. In 2013, the carrier donated nearly $19 million in corporate monetary, in-kind and ticket donations, to help those in need (SWA Report, 2013). These societal interactions can further strengthen SWA reputation and brand image in the industry and potentially gain more …show more content…

Fuel prices are highly volatile due to the nature of its dependence on international market conditions including political instability and environmental events, such as natural disaster. For example, in 2005, Hurricane Katrina disrupted oil production due to the widespread damage along the Coast where oil-drilling and production takes place (Helfand, 2012). Therefore, it is out of the hands of airline industry to control the fuel supply and price fluctuation. Rising fuel prices can result in increase in ticket prices, which may discourage travelers’ choice for air travelling. Moreover, economic recession can also affect the airline industry. When the recession hit the U.S, started in 2008, consumers were less willing to travel due to their reduced disposable

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