A Case Study on Southwest Airlines

A Case Study on Southwest Airlines

Introduction

1. 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.

2. 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.

3. 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.

4. 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.

5. It is a domestic airline that provides primarily short-haul, high-frequency, point-point, low-fare service to 53 airports in 52 cities in 26 states throughout the United States. Southwest focuses primarily on point-to-point service, providing more direct nonstop routes for short-haul customers and, therefore, minimizing connections, delays and total trip time.

6. The other services offered by the company include selling credits to various business partners that include credit card companies, hotels, telecommunication companies and car rental agencies. As of December 2009, the company operated 537 Boeing-737 aircraft and offered its services to around 68 cities across 35 states in the US. It also served 437 nonstop city pairs during the year. Southwest Airlines is headquartered at Dallas, Texas, the US.

Environmental Assessment

Internal Analysis

Southwest Airlines has a very strong company internally with an IFEM score of 3.31.

1. Marketing

Marketing is important when trying to maintain or gain market share. Southwest Airlines pursues a low cost/low price/no frills strategy. This means that