American Airlines: Southwest Airlines Essay

2159 words - 9 pages

South west airline is among the largest America carrier in terms of customer boarding. The company which embarked its operations on three major Texas cities, which are Dallas, Houston and San Antonio, in 1971, has expanded rapidly, and operates over 350 Boeing 737 aircraft all over the United States. The company has the lowest operating cost structure in the domestic airline industry, whereby it provides primarily short haul, high frequency, point-to-point, and the lowest and simplest fares. The airline currently serves 59 airports in 58 cities in 30 states. The company has managed to retain one of the best customer service records. The main core advantage of the company on which it can leverage on, is that the work more productively, more flexibly and more creatively. The company’s mission statement is “……..dedication to the highest quality of customer service delivered with a sense of warmth, friendliness, individual pride and company spirit”. The main objectives of the airlines business strategy include focusing on transporting high number of passengers on short trips with high frequency, availing low fare, making a strong commitment to its employees and customers and aggressive marketing. The company has a target of a niche market from where it gets its customers’. The company mainly on top of providing lowest fares for business and leisure travelers, it concentrates on inter state short trips and more maximizing the profitability than focusing on market Share. It is this strong vision which out weigh the allurement of international flight market and this enables the airline to concentrate on its own niche to gain profit (Smith, 2004).

1.4 Analysis of the strategic and design issues as applied to the operation in South West Airline

The company has managed to stay afloat and leverage on its key competencies by sticking to its motto which reads as follows” keep it cheap, keep it simple”. This is the opposite of its competitors who rely on hub and spoken system. Southwest offers about 2,700 daily flights to more than 55 cities in 29 states. Short flights, typically lasting an hour or less, and use of each plane for an average of 11 hours per day, three hours above the industry average, enables Southwest to spread its fixed costs over more seats. The airline usually lands at small airports to steer clear of the congestion at competitors' larger hubs. Their focus on point-to-point systems results in more direct routes, reducing connections, delays and overall trip time. As a result, the airline only requires a 55% load factor to break even. The company has already stated above has managed to attract more customers due to its cheap fares, which large carriers can not manage without incurring huge losses. The company doesn’t offer frills such as full meals, seating assignments, or baggage transfers. Snacks such as peanuts and drinks on its flights are what the company offers only (Freiberg, Jackie and Kevin Freiberg,...

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