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Analysis Of Southwest Airlines

884 words - 4 pages

Air transport is a global industry and as such every airline is a likely challenger for every other. It is contrary to expectation that any airline will be able to contest on a large scale without being associated to other carriers. Traffic feed is the industry's lifeblood and stand-alone carriers will be labored to carry low-revenue point-to-point traffic when front with airlines able to offer manifold route alliances. Southwest Airlines is a major carrier to the USA accounting for about 85% of its airfreight tonnage, but it also operates scheduled services to South Africa, Japan and Hong Kong. The subject of strategic alliances inside the air transport industry is not a well-researched area. This is due, in part, to the truth that alliances are a nearly new happening in the industry. The 1990s in specific have seen a commotion of alliance activity of all descriptions. When Southwest Airlines talk about aviation maintenance, they speak of repairs, alterations and the act of preserving an aircraft in its original airworthy condition. An airworthiness certificate is given to an aircraft after countless hours of design, research and testing. And in order to keep this certificate valid; an aircraft must be maintained in accordance with a certain specification. These specifications are brought to them by the Federal Aviation Administration. Southwest Airlines share price is now $3.49, having fallen dramatically from its $6.60 high in 1997. The company has been embarking on cost cutting since 1996, but has lately upped the ante. The most recent results released in February showed a third quarter pre-tax loss of $60 million. This was pretty much as expected with the airline leaking cash as it restructures. The plan is to focus on smaller more economic planes carrying premier fare paying customers. As well as business traveler class, the company also recently announced a new ‘world traveler plus’ class for the cost conscious business traveler. New seats that open out, as ‘beds’ are part of the move to attract the high paying target market. The niche expansion is at the expense of losing customers at the cheap end. In many respects, by its very character the air transport industry has always been a global business. The progress of larger more efficient aircraft has contemplated that air travel is increasingly commonplace. More people have the chance to travel to more places than ever before. As an outcome of this, the traveling public's anticipation has been lifted. Thus the industry is becoming increasingly globalized and phrases such as seamless service and frequent flyer program have turn weapons in the fight to win passengers. American carriers, immediately shattered by the attacks on the World...

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