Southwest Airlines
Case Study
Southwest Airlines
Course: Services Marketing
3rd Term
Southwest Airlines (SWA) began services in 1971. In 1972, court order no charter flight beyond Texas in order to make up for the lost revenue they were forced to sell aircrafts and keep just the ones needed to continue business and operate scheduled services. Schedule could be kept if the turning time of a plain was low enough (10 minutes). Nevertheless, Dallas-based SWA achieved 40 consecutive years of profitability and an impressive revenue growth right in the middle of the biggest economic crisis the USA has seen. All this has been achieved thanks to its Low cost advantage and its differentiation strategy through a unique Customer Service delivered at their moments of truth by nearly 46,000 employees to more than 100 million customers annually, consistently having one of the best overall Customer Service records.
On May 2, 2011, SWA completed the acquisition of AirTran Holdings, Inc., and now operates AirTran Airways as a wholly owned subsidiary. Now SWA has become America’s most successful low fare, high frequency carrier operating more than 3,500 flights a day and, including AirTran, it operates the largest fleet of Boeing aircraft in the world to serve 97 destinations in 41 states.
When looking for competitors we can find the “usual suspects” Europe's EasyJet and Ryanair are two of the best-known airlines to follow SWA’s business strategy in that continent. Other airlines with a business model based on SWA’s system include Canada's WestJet, Malaysia's AirAsia (the first and biggest Low-Cost in Asia), Qantas's Jetstar, Mexico's Volaris and Turkey's Pegasus Airlines. Although SWA has been a major inspiration to many other airlines, including Ryanair, AirAsia and Jetstar, the management strategies differ significantly from those of SWA, where its competitive strategy combines high level of employee and aircraft productivity with low unit costs by reducing aircraft turnaround time
Southwest Airlines
Course: Services Marketing
3rd Term
Southwest Airlines (SWA) began services in 1971. In 1972, court order no charter flight beyond Texas in order to make up for the lost revenue they were forced to sell aircrafts and keep just the ones needed to continue business and operate scheduled services. Schedule could be kept if the turning time of a plain was low enough (10 minutes). Nevertheless, Dallas-based SWA achieved 40 consecutive years of profitability and an impressive revenue growth right in the middle of the biggest economic crisis the USA has seen. All this has been achieved thanks to its Low cost advantage and its differentiation strategy through a unique Customer Service delivered at their moments of truth by nearly 46,000 employees to more than 100 million customers annually, consistently having one of the best overall Customer Service records.
On May 2, 2011, SWA completed the acquisition of AirTran Holdings, Inc., and now operates AirTran Airways as a wholly owned subsidiary. Now SWA has become America’s most successful low fare, high frequency carrier operating more than 3,500 flights a day and, including AirTran, it operates the largest fleet of Boeing aircraft in the world to serve 97 destinations in 41 states.
When looking for competitors we can find the “usual suspects” Europe's EasyJet and Ryanair are two of the best-known airlines to follow SWA’s business strategy in that continent. Other airlines with a business model based on SWA’s system include Canada's WestJet, Malaysia's AirAsia (the first and biggest Low-Cost in Asia), Qantas's Jetstar, Mexico's Volaris and Turkey's Pegasus Airlines. Although SWA has been a major inspiration to many other airlines, including Ryanair, AirAsia and Jetstar, the management strategies differ significantly from those of SWA, where its competitive strategy combines high level of employee and aircraft productivity with low unit costs by reducing aircraft turnaround time