Southwest Airline Essay Example for Free

s give awayhwestward skyway Essay souwest Airlines was introduced in Texas on June 18, 1971 with three Boeing 737 airplanes and only serving three cities of Texas which included Houston, Dallas and San Antonio. The society came a long musical mode since 1971 today sou-west Airlines has 537 Boeing 737 airplanes and serving 68 cities around the US. southwestern Airlines has lead a major air passage in 1989 when it hit the billion-dollar revenue mark. sou-west Airlines is the United States more(prenominal)(prenominal) or less successful air duct business im shake offable to the clinical depression f bes, high frequency, and point-to-point carrier. According to the sou-west Airlines Fact Sheet 2010 southwesterly operates much than 3,200 outflows a day coast-to-coast, fashioning it the largest U. S. carrier based on domestic passengers carrier as of September 30, 2009. As June 2011, southwest Airlines has become the top air hose to carries the most domestic passen gers in the US. southwestern United States Airlines in 2013 has expanded their destination to 86 cities in 42 states and Puerto Rico.The current chief executive officer of southwestern Airlines is Gary Kelly and his vision for the caller-out is to connect people to what key in their lives through friendly, reliable, and low price air travel. According to the swamedia.com Gary is a 27-years southwestern United States vet who began his career at Southwest Airlines as Controller, moving up to Chief Financial Officer and frailness President Finance, then Executive Vice President and CFO, before being promoted to CEO and Vice death chair in July 2004. Gary assumed the roles of Chairman and President in 2008. Prior to joining Southwest Airlines in 1986, Gary was a CPA for Arthur Young Company in Dallas and Controller for Systems Center, Inc. Gary has fetchd many awards during his 27 years with the confederacy and twice being named CEO of the year by D CEO Magazines. Also, he was named of the scoop CEO in America by Institutional Investor three times.According to the Sawmedia.com Gary was selected as Dallas BusinessJournals CEO of the year for 2011. In 2010, Gary was honored with the Distinguished Alumnus allow from the University of Texas at Austin. In 2013, Gary allow be inducted into the McCombs School of Business Hall of Fame at the University of Texas at Austin Gary is the recipient of the 2013 Father of the Year Award and Gary is the recipient of the 2013 McLane Leadership in Business Award at Texas AM University. According to Gary Kelly and SouthwesAirlines.com their mission story is dedication to the highest quality of Customer Service delivered with a sense of warmth, friendliness, individual wrong and Company heart and soul.They overhear been operating their business exactly as their mission program line. They pay been so successful due largely to the usual focus on their employees. LUV and FUN is the program which Southwest has creat ed for their employees and their focus on guest operate which they ache to show respect for unity and other, represent the conjunction and create a comfortable, loose and fun working environment. Southwest Airlines StrengthsSouthwest airlines has many strengths, but one that brings in profit to the smart set in a major way is their guest service. Southwest airlines has the highest quality of customer service that is delivered with a sense of warmth, friendliness, individual pride, and company spirit. That statement is not only their motto, but as well as their way of devising a profit. Southwest brand their name on good customer service. They charter been admired to be the third top ranked airline in the U.S and the tenth in the airline patience. Buyology and an online inquiry mark company evaluated 4,000 men and women, with four key parameter of a company the awe, the bossity harmony and exploration of a company to rank the top ranked company.According to www.south westonereport.com, 220 brands and companies were studying during this evaluation the company were matched by numerically with strength and flunk. With relation with Southwest airline consciously and unconsciously Southwest airline realize the top spot for 2012. Not only do bag fly free Southwest airline was the for the first time airline to broaden senior discounts, ticketless traveling, and services for air freight deli truly to the common traveler. Southwest airline offers credit based on the number of trips with the airline instead of the total miles traveled as well as understanding the not how far you fly its how many times you fly withSouthwest airline.As Southwests major strength is the customer service making a profit is another strength that has sustained them. In 2012, Southwest airline marked the most profitable airline in U.S airline industry unmatched for over 30 years. These profits is the settlements of the model(prenominal) customer service that Southwest airl ine has making over 421 one million million million dollars in 2012 alone. Another major strength is Southwest airlines website. During the plunk for quarter of 2013, 80 percent of Southwest airline passenger revenues were booked via southwest.com. In addition to flights, customers are able to make car, hotel, cruise, and complete vacation package reservations on southwest.com.Southwest airline has the Southwest cutoff feature on southwest.com, which is the first online tool that helps customers find the lowest fare based on availability across the entire month. Southwest airline has many strengths, but as southwest airline effect it in a nut shell its all nearly. According to www.southwestonereport.com, Southwest continues to variediate itself from other carriers with exemplary Customer Service delivered by nearly 46,000 Employees to more than 100 million Customers each year among 96 destinations in 41 states, the Di nonindulgent of Columbia, the Commonwealth of Puerto Rico, and five near-international countries all at low far. Southwest Airlines WeaknessesSouthwest Airlines has become one of the top airlines in America, it is the number one airline that carries domestic passengers around the state. Southwest Airlines have followed their CEO leadership, they do what they are supposed to do and they are carried on their mission statement to the waxest. With that in mind Southwest Airlines could be the only perfect airline and have many receiptss analyze to others as for examples low fares, beautiful flight attendants and happy employees who respect one and another. Southwest Airlines has success waxy construct a great, comfortable and relax workplace for their employees. Also, they have great customer service which is always their first priority. Unfortunately there is no such thing as a perfect company or a perfect person becaexercising the world that we live in right now is not perfect, so Southwest Airlines has many strengths but they are also hav e many weaknesses as well. The first weakness of SouthwestAirlines is inside their company.Debt and operating expenses are among the tops of the company priority, according to quality-assurance.com The company is estimated to possess $361 million of debt on their balance sheet, and until they pay down these debts it go out drag significantly on their business. Debt will drag on the business of Southwest. Also the Mounting Operating Expense can count as one the weaknesses of the company as well. The company has to pay out more for supply because it has grown 182.30% for the measurement of gallon from 2005 to 2011. Unfortunately, the company also has to deal with it employees union because of the union has subscribe to more services and benefits for their members, and by the end of the day Southwest doesnt have much left money to cover their debts and expenses. The hour weakness of Southwest Airline is the services provided to customers.According to businesstune-ups.com Southwes t Airlines doesnt provide international flights, they weart have seating options, their cargo space is real confine, they only have one typesetters case of airplane, Very short trips earn the same amount of perks as a long, extensive flight. Scrutiny of dominance employees based on personality before skill could be dangerous. Not having international flights and only have one aircraft for their services are the disadvantages to Southwests competitors. These days more and more passengers going out of country for their business trips which will increase profits and customers for the company. Only have one type of aircraft which is a great way to save money when the primary(prenominal)tenance services come. Also, it is a big disadvantage for Southwest Airlines because the aircraft has a control space for passengers luggage.Southwest Airlines also doesnt have a seating graph and no business option for their passengers. It is a great way to save money for the company and as well f or the passengers to bemuse a lowest air fares as possible, but many business passengers loss their own space to work on their presentations or their companies projects. So, without the business class option the airline will be losing out to its competitors. Another weakness of Southwest Airlines is the company only provides limited destinations for its passengers and mostly is from the South. The limited areas will limit the number of passengers who will choose Southwest as their designated airlines. It is hard and difficult to manage with other larger airlines that serve two domestics and internationally with also help them to build bigger grocery store for their companies. Southwest Airlines OpportunitiesNow that the spinal fusion of Southwest Airline with AirTran is now complete, growth is on the rise for Southwest, its customers and employees. In the acquisition, Southwest now can handle more international destinations with its new fleet of larger aircrafts. This gives mo re diversity for the customer and gives Southwest the ability to keep its fares low. Southwest also gained 8,000 additional employees from AirTran and if done correctly, this merger can only improve its customer service rating. Southwest Airlines is one of the top airlines in service today cognise for their strategy, dedicated work force, low fares and customer service. The competitors component or analysis is delineate as the process of identifying the performance and marketing strategy of competitive brands or products in the marketplace.So what is it almost Southwest Airlines that has put them in such an elite category compared to the competition? Southwests main strategy is to keep things simple. It has never served meals, does not have pass on seat reservations, and flies only Boeing airplanes. These decisions have helped Southwest be flexible in the face of the recent decreases in airplane passengers caused by the 9/11 terrorist attacks and the world economic crisis. (htt p//teamsparksouthwest.blogspot.com) By reducing some of the amenities that other airlines offer, it allows them to reduce the amount of employee cut backs, maintain low fares while retaining employees that are loyal to the brand, ensuring a good customer experience.This strategy has allowed Southwest to have 39 years of profitable growth (Thompson). Southwest has been on the cutting distinctness of managing employee loyalty. In a recent interview with, Herb Kelleher, founder of Southwest, he expressed that the key to a productive workforce is Paying personal attention to each of your people instead of a formula, also to empower employees and back them up (Kelleher) (Thompson). Over time, implementing these general tactics has reinforced a working coating at Southwest that separates them from their competition. A happy employee means great customer service, customer retention and systematically growing profit margins. Southwest airlines is known for its low fares but due to chang e magnitude fuel be, limited destinations and people finding alternate ways of travel ultimately Southwests competitive advantage of being the leader of low fares will diminish.Having fewer planes equals lower fuel costs whichis an area that Southwest is struggling with to maintain those low airfare prices. Fuel crisis and fuel price become threats to Southwest Airlines Company. Fuel costs in 1978 averaged 37 cents per gallon while in 1979 it became 80 cents. In 1980 fuel costs exceeded $1.00 per gallon. This price hike changes the expenditure pattern of the company. Operating costs become 40% of the total budget (MBA conduct Point case study). The only true competition for Southwest is regionally. Delta out marks them in most areas but due to Deltas concentration in the Southeast they only compete on a regional level. Delta does however fly to most of the areas where Southwest is the preferred airline. The same is not true for Southwest who has more limited destination availabili ty. In order to compete, Southwest will need to add more destinations to their roster.Business travelers will in time prefer Delta because of their perks for Business travelers which Southwest does not have. Not to have a business class excludes a whole subset of travelers that are more likely to fly on a regular basis which cuts down on profits. Southwests culture is centered around the customer. sequence in recent years they were positioning themselves as a low-cost airline with exceptional customer service their fares have seen a slight increase but the standard for high quality customer service remains the same. They create an employee friendly environment that motivates employees to want to work hard and be the top hat they can possibly be for the company. Southwests website states happy employees = happy customers and this is the culture they operate with every day. Southwest airline believes that volunteering is crucial to the health of nonprofit organizations that work to meet needs in different communities.Southwest airline employees volunteer their time day in and day out for the important causes that are closest to their hearts. In 2009, Southwest Airlines Employees volunteered more than 45,000 hours to charities across the country. In an effort to support these passionate Employee volunteers, Southwest Airlines launched the Tickets for Time program. For every 40 hours our Employees volunteer for a nonprofit organization, the benefitting nonprofit organization is eligible to receive one complimentary, round-trip ticket on Southwest Airlines for fundraising or transportation needs(Southwest.com). Southwest Airline has an outreach program for every culture and lifestyle the employee volunteer more than 137,000 hours.Southwest airline has an Adopt-A-Pilot program where students willresearch careers and further develop life skills, while the importance of staying in school is reinforced. Southwest Airlines and AirTran pilots mentor fifth grade stude nts and offer this program at no charge to the schools that participate in the Adopt-A-Pilot program. Southwest airline has several outreach programs that reach out to many cultures such as African- American, Asian, and Hispanic programs and LGBT. Southwest Airlines TreatsAirline industry could be affected by many factors such as general economic environment, fuel price, airline terror acts, weather conditions and air traffic restrictions. General economic environment has an impact on the demand for travel, and therefore influences the number of flights run by Southwest. The fuel price controls the companys costs rising slope fuel price would increase the cost, and the company cannot always avoid influences of fuel price by fuel hedging. Terrorist attack incidents would both physically and psychologically affect customers and employees, which leads to a higher security cost. Weather conditions also, have an important impact on flights as well. Bad weather conditions whitethorn dela y flights, increase atavism time, and thus mark up costs. All these potential threats are faced by Southwest Airlines. Having been very successful in their operations, Southwest Airlines is surely a target of competitors focus. And by that, other airlines may amaze copying Southwests strategies.Though this may show that Southwest is definitely a leader in the airline industry, it is somehow disadvantageous for the company in the long run. If those airlines try to imitate Southwests cost efficiency strategies, they can also lower their ticket prices and compete with Southwest. Through such, competition will get tougher for Southwest and it will no longer be able to monopolize the low fare celestial sphere of the industry and worse, there is a possibility that a big company in the future, possessing more advanced technologies and facilities, will operate using Southwest Airlines low-cost model to a wider market, which will encroach and scoop up Southwest Airlines. Terrorism is one of the greatest threats for people to lose faith on the airline industry. Airline companies in the US can attest to that after experiencing the 911 Attack in 2001 when they incurred major losses.Though Southwest was one of those airlines who did not incur a major loss, the possibility of an unforeseen terrorist aggression using airplanes is still a major threat inthe companys operations. This is because any loss of confidence in the safety of air travel would lead to a shift to the use of other forms of transportation, leaving Southwest struggling to fill its seats. High unemployment and inflation are keeping more travelers at home put out and demand price elasticity of airline carriers may vary depending on the nature of the industry. The macroeconomic factors change the airline industry include unemployment, the economic growth in the United States, and inflation. With low economic growth, consumers are finding luxury items more difficult to purchase and airline tickets for vac ations fall into that category.Unemployment contributes to a lack of vacation travelers since individuals who are not employed do not have extra money for vacation or airline tickets. Inflation also causes operating costs of the airlines to be higher which entails cuts into the profits of Southwest. Unemployment is affecting the airline industry because consumers are taking more stay-cation at home or vacationing to areas to which they can drive. As unemployment has risen, the airlines have laid off a much higher percentage of their people as well.Southwest Airlines Grand Strategies RecommendationsGrand strategies, often called master or business strategies, provide basic direction for strategic actions. There are many grand strategies that Southwest Airlines can choose from when considering which match with their companys strengths, weaknesses, opportunities and threats. Southwest Airlines is excellent in planning their long-term goals. The above SWOT analysis proved that the compa ny is successfully carrying out the cost leadership strategy to manipulate their competitors and boost up their company. Their mission in providing low fare cost is one of the best strategies that they have to increase their market share, and it also put a significant increase in the demand of air travel. Southwest Airlines rapid rewards program is brilliant, so they should continue and expand it even more. Southwest Airlines employees mainly belong to the Union and they are mainly full time workers.Since the Union has demanded more services and benefits for their members, the company gained limited profit. To fix this, the company should hire more part time workers instead of full time workers because if they implemented this they would not have to provide fullbenefits and instead focus on gaining profit. Also, Southwest Airlines should make all flights within the states point-to-point flights, and give their employees a strict timeline to alleviate delays. This will keep an accura te time frame for customers. As far as the flight concerns, Southwest Airlines has only one dependable flight, which is very dangerous when it comes to safety, but the good thing about that is an inexpensive cost for maintaining the aircraft. The safety of the customers is very important, so Southwest should increase at least one more dependable aircraft just in case something unexpected happens to the other one.Customer service is superior for Southwest Airlines, but many of their weaknesses can give their competitor many advantages. Southwest does not offer international flights, and there are increases in demand for international flights, so they should consider flying internationally within the next 5 or 6 years, or Southwest should completely become corporate with AirTran Airline by 2014 because they could put an increase in their net income. The advantages that Southwests competitors such as American Airlines and US Airways have are their inflight meals, seating charts, and h ighly advanced technology they have usable for their customers. In this case, Southwest Airlines should invest in one more blue jet that provides higher quality and fantastic experience for customers such as business travelers who are willing to pay extra for it. In that jet they would offer inflight meals, provide seating options when customers book their tickets, and most important of all, they have to advance their jet to have advanced technologies such as television.One of Southwest Airlines threats is a general economic environment caper like high unemployment and inflation that they cannot control. One thing that can be done is to create a program that provides customers time to pay off their ticket 5 months in advance before flying. So the customers would have enough time to pay in increments over a period of time so they do not have to worry about spending a lot of money at once. When it comes to expanding their name brand Southwest Airline should continue to increase th eir popularity by increasing the advertisements on both their and AirTrans website.Since the websites are the main places where customers go to book their tickets, the company should put that into a good use by creating more advertisements, and therefore gaining more popularity. Lastly, Southwest should continue to foster its remarkable culture. The fun-loving attitude that the company hasfor their customers and employees shows that Southwest has a great working environment the dedication that the employees have for the company contributes to both the existent and intangible benefits. It is a true competitive advantage for Southwest Airlines. (Terra Thompson) ConclusionAs a result in performing this project, we have learned that SWOT Analysis is the key for all businesses success. Understanding the strengths and weaknesses within the company and understanding the opportunities and threats that the company has externally are extremely important in planning the strategic plans to hel p the business overall outlook. As far as Southwest Airlines, we have learned that the company is very successful when it comes to the superior customer services, but Southwest should definitely continue on increasing their brand by upgrading their services within their aircrafts to become more high tech.We know that Southwest is known for their low cost fair, which gave them a huge advantage of their competitors. And the fact that they are integrating with Air Trans was a brilliant idea, because they are expanding their brand through Air Trans in providing International flights, which are, in a very high demand right now. We think Southwest Airlines is in the borderline in gaining a sustainable competitive advantage if they are expanding their aircraft to fit what their customers needs and wants.ReferencesAnalyzing southwest airlines Web log message. (, April). Retrieved from http//teamsparksouthwest.blogspot.com/2012/04/southwests-competitive-advantage.html AP News. (n.d.). Retrie ved from http//traveltips.usatoday.com/kind-planes-southwest-airlines-fly-62394.html Broughtson, R. (n.d.). Southwest airline debone analysis. Retrieved from http//www.quality-assurance-solutions.com/southwest-airlines-swot-analysis.html Bruwick, L. (n.d.). Southwest airlines swot analysis powerful business assessment tool. Retrieved from http//www.businesstune-ups.com/Southwest-Airlines-SWOT-Analysis.html Case analysis Southwest airlines. (2012, may 17). Retrieved from http//netmbastudy.wordpress.com/2012/05/17/case-analysis-southwest-airlines/ Gale Encyclopedia of Small Business. Competitor analysis. 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