Southwest Airline Case Study
The September 11 attacks changed the airline business forever. The fear of terrorism by plane plagued everyone’s mind that entered an airport. The attacks left the airline business in turmoil. Traveling declined significantly and layoffs for airline employees were at an all time high. Airlines are now facing another crisis, gas prices, the price for fuel has increased drastically since September 11th and no doors of relief are being opened. Southwest airlines, the fourth largest U.S. airline in terms of passengers carried and second largest in scheduled domestic departures, has continued to earn profits despite the decline in travelers and high gas prices. Southwest Airlines is the leading low cost national air carrier in the U.S. Their distinctive business model has led to years of success and profitability. With an airline industry with intense competition it has led Southwest competitors to try and imitate some of Southwest's policies and capitalize off of their success. New airlines such as Shuttle by United and Continental Lite have been created to offer the same services and follow some of the same trends set by Southwest Airlines.
United Airlines is the largest major airline carrier of them all, accounting for 22% of the market share. Southwest Airlines is a national carrier and accounts for 4% of the market share. Southwest has continued to be success while other airlines have filed for bankruptcy, lay off employees, and cut flights. Some of the main reasons why Southwest has continued success are because:
• Southwest avoids big airports, which cuts gate cost and labor cost for larger airports.
• Southwest flies nonstop routes and uses a point to point system which cuts gas.
• The airline does not offer meals only peanuts and beverages because the flights are so short.
• Southwest has also been rewarded for their excellent customer service with three Triple Crown Awards.
• The leading...
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