Southwest Airlines Research Paper Example | Topics and Well Written Essays - 750 words

Southwest Airlines - look for Paper ExampleThis airline particularly targeted the bottom-of-the-pyramid market segment by offering no-frills serve that resulted in reduced fares. It was claimed to be one of the just about miserable cost carriers as it offered high relative frequency and short hauls matched with point-to-point service and reasonable fares (Inkpen 5). Unlike its competitors, Southwest did not believe in the hub-and-spoke outline as it resulted in congestion and a lot of time wasted in the process of delay for customers to arrive from other airports. In the words of the friendships Annual report, the company was poised to finagle well in good times so as to sustain during bad times (Inkpen 1). blush though the company enjoys a high volume of passenger traffic and high turnover, it has met with various challenges. The most important challenge was the increasing efficiency of legacy carriers in the U.S along with large mergers such as those between Delta and Nor thwest that was leading to industry consolidation (Inkpen 1). Such consolidations were a threat to companies such as Southwest since the consolidated companies had access to lower operating costs (owing in part due to joystick resources) as well as higher prices of tickets which is something Southwest did not focus on. This is reflected in the fact that, consort to the financial statements, Southwest possesses the lowest average revenue passenger miles per passenger and has the highest operating margin in the industry (Inkpen 3). However, since passenger yield is high (reflecting high volume of passengers), Southwest has managed to rack up network in years when others have faced losses. The company also possesses the lowest costs (including unit costs, turn over costs and number of employees per aircraft) which add to its source of competitive advantage. However, the companys ability to offer low fares at low costs has been challenged by smaller airlines such as JetBlue and Alle giant. Furthermore, the acquisition of Air Tran was a big challenge as it would require downsizing, acquiring new fleet as well as moving into non-U.S destinations. One of the major issues faced by the company was the attempts by its competitors to prevent the company from flourishing. measure and again various airlines that were Texas based tried to tilt law in their favor however, the company succeeded in its legal proceedings. In line with further attempts to outdo its competitors, Southwest offered unmatched low fares such as $59 compared to $310 offered by its competitors (Inkpen 4). Although this was a good thing in one way, it was difficult to position these fares as regular and not introductory fares in the minds of customers. Positioning the brand through such low prices was, therefore, the last challenge. Another issue faced by the company as that of growing and expanding its operations. There was some foeman by employees to this idea which could result in losing market s to rivals. Furthermore, entry into the northeast region did pose threat to the companys operations due to congestion on airport and high turnaround times at airports. The company might consider using drive through airport models that reduce the number of lanes that the aircraft mustiness pass through. Perhaps the most pressing issue is the Air Tran deal which requires merger of two airlines with varied mindsets and operations. There was a difference in the type of fleets used along with Air