Managerial Accounting Case
Case Study in Managerial accounting
Case 1:
Southwest Airlines
Part A : General Information
Company Name: Southwest Airlines Co.
Company is traded on the New York Stock Exchange trade market (NYSE) with symbol LUV.
Corporate Headquarters are located at the physical address: 2702 Love Field Drive, Dallas, Texas 75235.
Corporate Web Site: http://www.southwest.com.
Corporate Web Site for business travelers: http://www.swabiz.com/
Industry Classification
Company operates in the Industrial Sector – Services, and Industry – Regional Airlines. According to the Standard Industrial Classification System (SIC), company belongs to the industry group 451: Air
Transportation, Scheduled, and Air Courier, and particularly to the industry 4512: Air Transportation, Scheduled. Companies covered by this classification code are primarily engaged in furnishing air transportation over regular routes and on regular schedules, including air cargo carriers, scheduled and air passenger carriers, scheduled (DOL).
According to the North American Industry Classification System (NAICS), Southwest Airlines relate to the Code 481111: Scheduled Passenger Air Transportation. Industry description per this classification is as follows: “This U.S. industry comprises establishments primarily engaged in providing air transportation of passengers or passengers and freight over regular routes and on regular schedules. Establishments in this industry operate flights even if partially loaded” (NAICS).
Industry Overview
The United States air carriers transport about one third of the amount of worldwide traffic, serving over 1.5 billion passengers a year. Over the past two decades, air travel has grown at an average of about 5% per year. In general, the annual air travel growth has been twice as much as the annual growth in GDP.
Productivity improvements and cost management have been two of the greatest concerns for US airlines, especially with sharp recent increase in the oil
Case 1:
Southwest Airlines
Part A : General Information
Company Name: Southwest Airlines Co.
Company is traded on the New York Stock Exchange trade market (NYSE) with symbol LUV.
Corporate Headquarters are located at the physical address: 2702 Love Field Drive, Dallas, Texas 75235.
Corporate Web Site: http://www.southwest.com.
Corporate Web Site for business travelers: http://www.swabiz.com/
Industry Classification
Company operates in the Industrial Sector – Services, and Industry – Regional Airlines. According to the Standard Industrial Classification System (SIC), company belongs to the industry group 451: Air
Transportation, Scheduled, and Air Courier, and particularly to the industry 4512: Air Transportation, Scheduled. Companies covered by this classification code are primarily engaged in furnishing air transportation over regular routes and on regular schedules, including air cargo carriers, scheduled and air passenger carriers, scheduled (DOL).
According to the North American Industry Classification System (NAICS), Southwest Airlines relate to the Code 481111: Scheduled Passenger Air Transportation. Industry description per this classification is as follows: “This U.S. industry comprises establishments primarily engaged in providing air transportation of passengers or passengers and freight over regular routes and on regular schedules. Establishments in this industry operate flights even if partially loaded” (NAICS).
Industry Overview
The United States air carriers transport about one third of the amount of worldwide traffic, serving over 1.5 billion passengers a year. Over the past two decades, air travel has grown at an average of about 5% per year. In general, the annual air travel growth has been twice as much as the annual growth in GDP.
Productivity improvements and cost management have been two of the greatest concerns for US airlines, especially with sharp recent increase in the oil
References: Ali, M.F. (2003). Activity Based Costing/Management in Service Industry. Retrieved June 9, 2008, from http://www.aimamc.com/staci/articles/abcm.htm Anthes, G Aviation Explorer (n.d.). Airline Industry overview. Retrieved June 18, 2008, from http://www.aviationexplorer.com/airline_industry_overview.htm Banstetter, T Boguslaski, C., Ito, H., & Lee, D. (2004). Entry patterns in the Southwest Airlines route system. Review of Industrial Organization, 25, pp. 317-350. Boeing, Inc. (2005). The trend of future air travel: Frequencies and non-stops continue to grow. Retrieved June 11, 2008, from http://www.boeing.com/commercial/P2P/pdf/p2p_newsletter_12-05.pdf Bunz, U.K., & Maes, J.D Flouris, T., & Walker, T.J. (2005, March). The financial performance of low-cost and full-service airlines in times of crisis. Canadian Journal of Administrative Sciences, 22(1), pp. 3-21. Freiberg, K., & Freiberg, J. (1996). Nuts! Southwest Airlines’ crazy recipe for business and personal success. Austin, TX: Bard Press, pp. 48-63. Green, S.D. (2004, January 26). Southwest Airlines keeps PR course with flying colors. Retrieved http://www.sherrigreen.com/SW%20CCS.htm Horngren, C Jensen, M.C. (2001, November 26). Why corporate budgeting needs to be fixed. Retrieved June 16, 2008, from http://hbswk.hbs.edu/item/2647.html Kinahan, B Madanoglu, M., Chang, D.Y, & Chu, Y. (2004). Creating economic value in the US airline industry: are we missing the flight? International Journal of Contemporary Hospitality Management, 16(4/5), p. 294. Marshall, J Mistry, A., Moy, J., Owens, T, & Quentanilla, M. (2003, April 15). Southwest Airlines. Retrieved June 3, 2008, from http://marge.uvm.edu/jmoy/Southwest%20Airlines.htm NAICS Association (n.d.) Pae, P. (2008, May 30). Southwest Airlines reaps benefits of fuel hedging strategy. Los Angeles Times. Retrieved June 17, 2008, from http://www.latimes.com/business/la-fi-southwest30-2008may30,0,2300697.story Parker, J Pryor, T. (n.d.). Conventional wisdom or myth? Retrieved June 4, 2008, from http://www.icms.net/conventional_wisdom.htm Rohm, H Securities and Exchange Commission (2008). Southwest Airlines, Co. Annual Report. Retrieved June 16, 2008, from http://www.southwest.com/investor_relations/swaar07.pdf Serwer, A Smith, G. (2004). An evaluation of the corporate culture of Southwest Airlines. Measuring Business Excellence, 8(4), pp. 26-33. U.S. Chamber of Commerce (n.d.). Southwest’s secret to a positive corporate culture: its employees. Retrieved June 17, 2008, from http://www.uschamber.com/bclc/profiles/southwest.htm U.S