Sw Airlines Essay

720 words - 3 pages

"Southwest Airlines: In a Different World" Individual Report
Bernardo Lança Cirnes Nogueira de Oliveira nº 2382 Quality Management - 2014/2015
Southwest Airlines started as an intrastate operator in Texas with a budget
airline philosophy as it survived a severe price-war. It was the 7th largest country by
April 1993, and was expanded to become a national carrier, serving major cities in the
US.
The Southwest Airlines model was characterized by the use of non-
conventional models for low-cost, have Fun Together, treat employees as family, hire
people who form the fit and are involved in the activities and culture of the company,
and finally, control of the solid growth of the airline. It had come across some issues
and the one that most worried the heads of the company was the expansion. And
that's why despite the great success Southwest has maintained, the airline did face
several issues that played an important role to its continued profitability.
Based on a really conservative growth strategy, Southwest's major concern was
as said before expansion. And that's why the airline had faced a vital expansion
decision about where and how to put two new Boeings 737's into service. This decision
was comprised of some important components, as Southwest had to meet the daily
demand, find out enough facilities, keep the alignment and consistency of the strategy
and guarantee that the entrance in a new market is made in the right moment. But the
main problem related to these issues was finding the facilities that provided low cost
to the company and at the same time keeping the profit as high as possible. What the
company needed to take into account would have been new costs in terms of
construction in major city airports, the addition of two new gates and hiring new
people, which consequently, led to more labour costs. Competition in this type of
industry is tough and the risk of substitutes is really high. And in order to overcome
these threats, the company must maintain its competitive advantage and strategic
coherence when facing future expanding decisions, and that these decisions are in line
with its short-haul, high-frequency, low-cost and "LUV" strategies. Southwest did not
want to enter in a congested market with high costs, many delays and poor weather,
that's why they thought that the best strategy was keeping the operating costs low
and ensure...

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