Southwest Airlines Case Study
Situation Analysis
Since day one, Southwest Airlines has been able to maintain a winning strategy. Starting with just three aircrafts in the state of Texas, Southwest implemented a low cost, low fare, no frills strategy that proved successful. As they have grown, more plans have been put into practice, such as a widely popular frequent flyer program and their now legendary customer service. These strategies have proved successful, as Southwest is the only airline to have maintained a profit in the recent past.
Because of their low costs, Southwest is able to charge low fares, fares other airlines simply can not compete with. They are able to charge up to 70% less than other airlines, as they compare their prices with the cost of driving a care the same route as their flight. There are a few reasons why Southwest has been able to hold costs down including; using a single aircraft type, point to point routes and the selection of older less congested airports.
Major Opportunity
One major opportunity for Southwest would be to push the use of their website, www.southwest.com to employ the “ticketless passenger” strategy. Ticketless travel cuts the cost in half in comparison to use of a travel agency, and with the rising price of oil, Southwest will need to find new ways to keep costs down and in turn prices down.
Possibilities
One possible way to take advantage of this opportunity would be to team with Expedia.com, Orbitz.com, and/or Priceline.com to
Another possibility would be to simply advertise use of the website on television, radio, and in-flight readings as the main way to purchase tickets to fly.
Recommendation
Southwest teaming up with one of the internet ‘travel agents’ in Expedia, Orbitz or Priceline would make the work of the traveler much easier. A reason people may avoid buying tickets from Southwest’s website would be because they would rather deal with a...
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