Southwest Airlines Essay

2180 words - 9 pages

Southwest Airlines

Executive Summary

Southwest Airlines is currently the fourth largest airline in the United States. It flies over 64 million passengers a year, which makes 2,700 passengers a day, traveling to 58 cities. Southwest is the only major carrier to remain profitable in every quarter since 9/11, opposed to many other companies who have declared bankruptcy. It is an influential company that has greatly contributed to the development of the commercial airline industry.

This industry has grown at an average rate of 5% over the past 20 years. Of course several uncontrollable economic and environmental factors, such as the events of September 11th and the current war on Iraq, have caused this growth to fluctuate. But, as market competition keeps increasing, airline management is trying to improve productivity, using different methods to reduce unit costs, and increase total network revenues without raising fares.

What helps keep Southwest so successful is it’s company’s well-organized, efficient management and superior attitude. They do a very good job of concentrating on keeping their customers happy. They do this through treating their employees how they would want their customers to be treated, and committing themselves to constantly cut-down on costs.

Introduction

The growth of the commercial airline industry during the second half of this century was truly remarkable. It has had an innovatory impact on economic, technological, and cultural development throughout the world. This paper analyzes Southwest Airlines, and how they are using information technology to gain competitive advantage. First is the industry analysis which gives a sense of what the commercial air transportation market looks like, and Southwest Airlines’ competition. Next, a company analysis will provide Southwest Airlines’ financial performance, as well as its strengths and weaknesses, followed by problems and opportunities that Southwest Airlines face. The next section investigates Southwest Airlines’ use of information technology. It describes the specific applications of technology through the 12 digital themes of technology, and touches upon how this technology has helped Southwest Airlines become so successful. The final section discusses whether or not Southwest Airlines gained a competitive advantage, and if they are in a stronger or weaker position because of this.

Industry Analysis

The United States carries over one third of the globe’s total traffic, where Over 1.5 billion passengers fly annually. Over the past 20 years, air travel has grown at an average of about 5% per year, the reason for annual change is usually differences in economic growth, and of course other environmental factors, such as the current war. As a rule, the annual growth in air travel has been about twice the annual growth in GDP. Deregulation, liberalization, and competition have essentially...

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