Southwestern Airline is a leading US airline and the world’s largest low cost carrier, headquartered in Dallas, Texas. Southwestern Airline has created a niche that has allowed for success, even when other Airlines were at death’s door. The airline was established in 1967 and adopted its current name in 1971. The airline has 44,831 employees as of December 2013 and operates more than 3,400 flights per day. As of June 5, 2011, it carries the most domestic passengers of any U.S. airline. As of November 2014, Southwest Airlines has scheduled service to 93 destinations in 41 states, Puerto Rico and abroad. (Southwest Airlines)
“Southwest Airlines has never deviated from its niche: short-haul, high frequency, low-fare service, all delivered with …show more content…
One example of SWA keeping passengers comfort in mind at all times is, Southwest Airlines passengers will get wider seats on the carrier's newest Boeing 737 jets that are to begin arriving at the airline in 2017. (Mutzabaugh) Southwest execs have always stayed true to their mission statement. The mission of Southwest Airlines is dedication to the highest quality of customer service delivered with a sense of warmth, friendliness, individual pride, and company spirt. (Southwest)
The Porter’s Five Forces assessment shows all areas are high except threat of entry. There is a lot of cost and capital investment associated with starting an airline, and, especially in periods of slow economic growth, the risk often far outweighs the reward. Established brand names often legacy airlines tend to survive the troughs better than small start-ups, especially when customers are not patronizing as they do during peak economic times. Loyalty programs become paramount, discouraging changeover and promoting the strong brand names that already exist in the marketplace. …show more content…
Southwest is employing fuel hedging and derivative contracts to counteract the rising prices in the oil market. Fuel cost currently account for 40% of operating expenses for airline. Adopting a flexible hedging strategy, committing to a more aggressive hedged percentage and taking long term positions, made Southwest’s jet fuel hedging program a success. SWA hedging strategy works because they adjust its hedge every year based on short term needs in terms of quantity and prices. (Importance of Hedging)
Southwest Airline has adopted many key success factors that are hard to emulate. Southwest has hired a top quality workforce, created a great employee reward program and Southwest culture is hard to compete with. The low price SWA is able to offer is difficult for competitors to compete with. They have achieved lower pricing options by having convenient shorter flights times and more nonstop flights. Southwest Airlines offers nonstop service in more than 650 roundtrip markets.
“Southwest Airlines has never deviated from its niche: short-haul, high frequency, low-fare service, all delivered with …show more content…
One example of SWA keeping passengers comfort in mind at all times is, Southwest Airlines passengers will get wider seats on the carrier's newest Boeing 737 jets that are to begin arriving at the airline in 2017. (Mutzabaugh) Southwest execs have always stayed true to their mission statement. The mission of Southwest Airlines is dedication to the highest quality of customer service delivered with a sense of warmth, friendliness, individual pride, and company spirt. (Southwest)
The Porter’s Five Forces assessment shows all areas are high except threat of entry. There is a lot of cost and capital investment associated with starting an airline, and, especially in periods of slow economic growth, the risk often far outweighs the reward. Established brand names often legacy airlines tend to survive the troughs better than small start-ups, especially when customers are not patronizing as they do during peak economic times. Loyalty programs become paramount, discouraging changeover and promoting the strong brand names that already exist in the marketplace. …show more content…
Southwest is employing fuel hedging and derivative contracts to counteract the rising prices in the oil market. Fuel cost currently account for 40% of operating expenses for airline. Adopting a flexible hedging strategy, committing to a more aggressive hedged percentage and taking long term positions, made Southwest’s jet fuel hedging program a success. SWA hedging strategy works because they adjust its hedge every year based on short term needs in terms of quantity and prices. (Importance of Hedging)
Southwest Airline has adopted many key success factors that are hard to emulate. Southwest has hired a top quality workforce, created a great employee reward program and Southwest culture is hard to compete with. The low price SWA is able to offer is difficult for competitors to compete with. They have achieved lower pricing options by having convenient shorter flights times and more nonstop flights. Southwest Airlines offers nonstop service in more than 650 roundtrip markets.