Southwest Airlines Case Analysis
Comprehensive Case Analysis
Southwest Airlines:
What¡¦s Next? April 11, 2000 They Took a Great Idea and Made It Fly
Southwest Airlines Company is a domestic airline that provides primarily short-haul, high-frequency, point-point, low-fare service to 53 airports in 52 cities in26 states throughout the United States. Southwest focuses primarily on point-to-point service, providing more direct nonstop routes for short-haul customers and, therefore, minimizing connections, delays and total trip time. The company¡¦s average trip length is 441 miles with an average flight time of approximately one-hour.
It was Rollin King¡¦s and Herb Kelleher¡¦s vision to start an airline that with a mission to get its passengers to their destinations when they want to get there, on time, and to provide this service at the lowest fare possible. On February 40, 1968 the Texas Aeronautical Commission approved Herb Kelleher and Rollin King¡¦s plans for Air Southwest Company to provide service for the three major cities in Texas. This approval was soon opposed and blocked by three major airlines. After 3 years of legal battles, broke, deep in debt and with four airplanes, Southwest Airline began service in June of 1971. In 1973 Southwest made it¡¦s first profit and has never looked back. It has made an annual profit each consecutive year thereafter.
Southwest grew steadily, by 1975 it had operations in eight cities in Texas, and by 1980, it was the leader in the Texas region. It was attractive to customers that wanted frequent departures and low prices. With the low prices and its no frills philosophy, it quickly dominated every market it entered. In some markets, it entered competitors soon surrendered to Southwest allowing the airline to grow more quickly than estimated. Competitors often referred to Southwest as the ¡§ 500-pound cockroach that is was too big to stamp out.¡¨ As airfare continued to fall, passenger traffic increased drastically, but its
Southwest Airlines:
What¡¦s Next? April 11, 2000 They Took a Great Idea and Made It Fly
Southwest Airlines Company is a domestic airline that provides primarily short-haul, high-frequency, point-point, low-fare service to 53 airports in 52 cities in26 states throughout the United States. Southwest focuses primarily on point-to-point service, providing more direct nonstop routes for short-haul customers and, therefore, minimizing connections, delays and total trip time. The company¡¦s average trip length is 441 miles with an average flight time of approximately one-hour.
It was Rollin King¡¦s and Herb Kelleher¡¦s vision to start an airline that with a mission to get its passengers to their destinations when they want to get there, on time, and to provide this service at the lowest fare possible. On February 40, 1968 the Texas Aeronautical Commission approved Herb Kelleher and Rollin King¡¦s plans for Air Southwest Company to provide service for the three major cities in Texas. This approval was soon opposed and blocked by three major airlines. After 3 years of legal battles, broke, deep in debt and with four airplanes, Southwest Airline began service in June of 1971. In 1973 Southwest made it¡¦s first profit and has never looked back. It has made an annual profit each consecutive year thereafter.
Southwest grew steadily, by 1975 it had operations in eight cities in Texas, and by 1980, it was the leader in the Texas region. It was attractive to customers that wanted frequent departures and low prices. With the low prices and its no frills philosophy, it quickly dominated every market it entered. In some markets, it entered competitors soon surrendered to Southwest allowing the airline to grow more quickly than estimated. Competitors often referred to Southwest as the ¡§ 500-pound cockroach that is was too big to stamp out.¡¨ As airfare continued to fall, passenger traffic increased drastically, but its