Southwest Airlines
Since its beginnings as a scheduled airline in 1971, Southwest Airlines has distinguished itself within the US airline industry as a unique player. Its commitment to offering a low fare structure to both business and leisure travelers has made air travel more affordable to many consumers and has caused a consistent increase in demand for expansion into new markets, as well as increasing price competition within the cities it serves. Since the airline regulation in 1978, Southwest has dramatically increased the number of markets it serves and its market share. It has also been the model for a number of less successful low cost start-up airlines, such as ValuJet and People’s Express.
Southwest Airlines has implemented several cost-effective strategies which allow the savings to be passed along to the consumer. First, Southwest does not offer full cabin service and provides only “coach class” service to its passengers. Meal service is not offered, only peanuts, snacks and beverages.
Second, Southwest only operates one type of aircraft and one type of engine, the Boeing 737 series and GE engines, which greatly reduces maintenance costs, allows for lower spare parts inventory and cuts on training costs for crews. Third, Southwest uses “ticketless” and “paperless” travel reservations systems.
Passengers are not issued paper-boarding passes and are not assigned seating when making reservations. Instead, they are given plastic numbered reusable boarding passes based on first come, first served basis.
Fourth, Southwest Airlines offers point-to-point transportation, and does not operate within a hub system like the other major US airlines. It also is a stand-alone carrier with no alliance or partnerships agreements with other domestic or international airlines. And last, Southwest Airlines uses a direct method of distribution, selling tickets directly to the traveler, bypassing travel agents and reducing the costs associated with...
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