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Challenges for southwest airlines
Southwest airlines and american airlines case study brief
Challenges for southwest airlines
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While Southwest Airlines continues to have a good reputation and successful competitive advantages, the company also has its weakness. Some of the company’s weaknesses are its limited services and only use one aircraft. Southwest airlines does not offer services such as first class, assigned seating and do not offer meals. Southwest Airlines do not offer first class seating, which is a huge threat for the company. Some consumers prefer to purchase first class seat for luxury experience, other purchase their ticket early to have better seating. However, Southwest Airlines do not provide these services. According to its website, the airline provides general boarding and the earlier a passenger checks in, they will have first priority seating. Secondly, the company guarantees its passenger for assigned seating if they purchase using its line business select program. (Southwest) Basically, seating arrangement is first come first serve. As a consumer, I would like to purchase my ticket in advance to get better seating and I prefer window seat. However, if I decide to fly with Southwest Airlines, I will have to make sure to run in front of other passenger just to get a better seat, which I find ridiculous. I suggest Southwest Airlines should start assigning seats, offer first class seating and offer meals to its passenger to avoid any chaos and to give its …show more content…
The rest of the crew is familiar with one type of aircraft for less confusion. (Stevenson, 2012) To stay competitive within the airline industries, Southwest Airlines should consider expanding its services by using other types of aircrafts. This will give an opportunity for the company to expand its services to a larger
Another internal challenge for Southwest Airlines is the conflicting management style and business operation with AirTran. On top of that, the external challenges such as the increase of competitions and gas prices are some of issues f...
Despite its growing domestic network, the company didn’t offer international flights until July 2014, and even then, it only offered limited destinations (“Southwest Corporate Fact Sheet,” n.d.). Furthermore, the company’s reliance on a single aircraft is cause for concern. Southwest Airlines was also weak with technology utilization initially but has since turned this into an asset, as described later. Finally, the company has a limitation with providing customer perks due to its low-cost operations (Ross & Beath,
This is the historic background of an American Airline company called the Southwest Airlines Co. based in Dallas which still exists and operates with great success between 57 cities in 26 states of the US, by over 300 airplanes , providing primarily short-haul, high frequency, point to point, low fare service . Through this essay we will see an analysis of the company’s advantages and disadvantages through a SWOT Analysis. We will try to localize the problems of the company at the time and in the case of a future expansion, and we will try to give a number of alternative solutions and chose one of them. The Southwest Airlines is a company that has done its first movements in the airline world in 1971 after many efforts for its opening through legal battles with competitors that did not believe that there was any particular reason why the another airline company should exist among all the others already existing. The different things that the new airline company provided were many and very interesting. The idea started from two friends Rolling King, and investment advisor, and Herb Kelleher, his lawyer, who met in order to discuss the idea of Rolling King for a low-fare, no- frills airline to fly between three major cities in Texas. The outcome of this discussion was in reality the decision of the two men to go for something that they believed would work, even though they were not positive about that. After all the legal battles between the two men and the airline companies of Texas at the time who believed it was not necessary for another airline company to enter the market, battles that prevented the operation of the company for three whole years, Southwest Airlines Co. had become a reality. Other legal battles followed in the future that justified the Southwest Airlines but left the company broke, while during the first year of its operations made losses and the earnings for the next half a year were balancing with costs. Gladly the recovery came soon and by 1978 Southwest Airlines was one of the most profitable in the country. Later on, Southwest Airlines Co. managed to provide airline transportation in eight more cities in Texas and dominated the Texas market, with low prices and frequent departures. Today the Southwest Airlines Co. is a very big domestic airline company, the fourth in the US. We will now have a small analysis of the company’s environme...
Southwest Airlines strategy of focusing on short haul passenger and providing rates as low as one third of their competitors, they have seen tremendous growth in the last decade. Market share for top city pairs on Southwest's schedule has reached 80% to 85%. Maintaining the largest fleet of 737's in the world and utilizing point-to-point versus the hub-and-spoke method of connection philosophy allowed Southwest to provide their service to more people at a lower cost. By putting the employee first, Southwest has found the key to success in the airline business. A happy worker is a more productive one as well as a better service provider. Southwest will continue to reserve their growth in the future by entering select markets only after careful market research.
Having a low amount of cost in their operations is one of the contributing factors in Southwest Airlines’ financial success. Such low cost model of the corporation is brought about by an effective strategy. Southwest uses only one type of aircraft – the fuel-efficient Boeing 737. This tactic keeps training and maintenance costs down. Moreover, the no-frills approach to customer service contributed to the low cost of operations for Southwest. The airline does not serve meals on board, and there are no luxurious or first class seats offered. Services like these have been seen by the airline as unnecessary for an airline that provides a short-haul trip from city to city. By these, Southwest were able to offer low price tickets to customers, which was good for the company because most people would prefer to fly without those services mentioned if it meant for cheaper ticket price.
Replacing the old aircrafts with new and more advanced Boeing 737-800s, has given Southwest airline the opportunity to fly out of U.S., and to find more customers such as tourists and business travelers not only inside the U.S. but outside the country. Second, giving promotions and coupons, such as rewards programs would encourage more customers to use Southwest Airline services, and as a result it would increase the company’s revenue. Trying to stick in customer’s mind as a low cost air line through advertisement would help the company to find new customer as well. Moreover, developing some subsidiary services such as car rentals, or taxi services could help customers to reach faster and easier to the airport, so it would have a positive impact in the customer’s
In the airline industry, Southwest Airlines is considered a true innovator. By shaking up the rules of flying and improving upon inefficient industry norms, Southwest has quickly grown by leaps and bounds. From the very start, Southwest Airlines' goals were to make a profit, achieve job security for every employee, and make flying affordable for more people (Southwest,2007). Southwest has not strayed from these goals. It does not buy huge aircrafts, fly international routes or try to go head to head with the major carriers; and thanks to a great planning, Southwest airlines has become the most successful airline company in the U.S., if not the world.
Advertising: As one of the largest domestic airlines, Southwest Airlines has an enormous advertising budget to sustain its presence and increase its market share through focusing on the benefits of flying Southwest over its competitors. Southwest recognizes that flying is no longer a pleasurable experience for many customers, even on Southwest, historically a budget airline. Even though Southwest is often regarded as a no-frills airline, it still attempts to build goodwill from its customers based on its advertising. Of the $249 million it spent on advertising in 2011, Southwest Airlines is unique in that it does not sell additional ad space on the exterior of its aircraft. Many domestic airlines have begun selling aircraft exterior space as a way to increase revenue, but Southwest Airlines insists that it wants to keep its product and advertisi...
Values and beliefs of a company can attract investors to a company or deter investors from a company. Fortunately, the SWA has attractive values and beliefs. According to SWA’s homepage (2015), the Southwest Airlines mission is “dedication to the highest quality of customer service delivered with a sense of warmth, friendliness, individual pride, and Company Spirit”.
Deregulation for 16 years (1978) has resulted in an icnrease of domestic carriers from 36 in 1978 to 100 in 1985.
The low cost and no frills strategy is make travel affordable at low cost. The company only operates one type of aircraft which is Boeing 737 to help maintenance cost low. Southwest was the first airline to use E-ticketing in this way customer can reserve spot and buy ticket on their web and allow less expense in printing tickets. Medium measured airports which allowed them to produce better time performance and less fuel costs so plane do not have to wait in the line at the runway. The core value of the company of “LUV and fun” makes the company great place to work that gives customer with a great experience.
It all started in 1971, when Rolling King and Herb Kelleher decided to challenge the existing rut of charging high prices for air travels. They considered the railways and roadways their competitors and decided to offer cheaper travel for smaller routes. The company was incorporated in 1967, apart from initial entry troubles, Southwest has been the only US airline to have earned profits since 1973. The eccentric company’s outlandish way of conducting themselves has been the sole reason for Southwest Airlines to succeed in a highly competitive and packed industry.
The mission of Southwest Airlines is a dedication to the highest quality of service delivered with warmth, friendliness, individual pride, and company spirit (Mission…, 2007). The company also provides opportunities for learning and personal growth to each employee. Creativity and innovation is very important and highly encouraged, for the purposes of improving effectiveness. Employees are to be provided the same concern, respect, and caring attitude within the organization that the employees are expected to share with the customer. Southwest Airlines was initially created to be a low-cost alternative to high price of intra-Texas air carriers (Freiberg, 1996). Southwest’s fares were originally supposed to compete with car and bus transportation. It was a little airline, and it would withstand the test of time. As a discount, no-frills airline, it would provide stiff competition for larger airlines. Their strategy was to operate at low cost, offering no food, no movies, no first class, and no reserved seats. They created their own market and provided increased turnaround times at the gate, by avoiding hub-and-spoke airports and opting for short-haul, direct flights. Through this market approach, Southwest has a majority of market share in the markets they serve.
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).
It offers ancillary service offerings such as EarlyBird Check-In (automatic check-in), and transportation of pets and unaccompanied minors. To buy tickets, customers can only purchase through their mobile app, official website, or by phone. The company operates a fleet of Boeing 737 aircrafts and has served various destinations in U.S. including the District of Columbia and the Commonwealth of Puerto Rico. Currently Southwest also travels to near-international countries including: Mexico, Jamaica, The Bahamas, Aruba, Dominican Republic, and Costa Rica. (EBSCOhost).