In order to increase customer satisfaction and maintain the lowest fares, Southwest Airlines has been…
“The U.S. airline industry had lost money in 14 of the 28 years from 1980 through 2007, with combined annual losses exceeding combined annual profits by $15 billion. Yet in July 2008, Southwest reported record quarterly revenues, its 69th consecutive quarter of profitability, rising passenger traffic on its flights, and a record load factor.”5 With a brilliant strategy of ‘low cost/low fare/no frills’ Rollin King, along with Herb Kelleher, launched the most surprising success story in airline history. In 1966, King had an idea. “His business concept for the airline was simple: attract passengers by flying convenient schedules, get passengers to their destination on time, make sure they have a good experience, and charge fares competitive with travel by automobile.”5…
First, one plane fits all. Unlike the network carriers which operate all manner of regional jets, Southwest flies just one plane type, the Boeing 737 series. That saves Southwest millions in maintenance costs. It also gives the airline unique flexibility to move its 527 aircraft throughout the route network between 67 cities without costly disruptions and reconfigurations. Second, Southwest specializes in very dense, short haul markets, flying nonstop between two points which is different from the traditional “hub-and-spoke” system of most other airlines. This minimizes the amount of time planes sit on the ground at delay prone hubs and allows the average Southwest aircraft to be in the air for more than an hour longer each day than a similarly sized jet flown by a network carrier1. Southwest also tries to use secondary airports which generally have lower costs and may be more convenient to travelers than the major airports to the same destinations. Third, Southwest offers simple in-flight service with just one class, a decent coach cabin that is slightly more spacious than the competitors, and customers are not assigned seats. In September 2009, Southwest adopted a new policy whereby passengers may pay and extra $10 and participate in “EarlyBird Check-in”. There have never been in-flight meals, just beverages and snacks and there is no in-flight entertainment. Keeping it…
Will they attract the right people ' to work and will they attract enough business…
Southwest Airlines is the industry leader in low cost airfare. They began its operation in 1971 with three Texas based routes and began interstate routes in 1978. When Southwest entered the market in 1971 they employed a market penetration pricing approach. They wanted to provide the best service for the lowest possible price. They saw that if they cut out certain unnecessary benefits they could lower their ticket price to a level far below that of the competition. They do not have in flight movies, meals, or first class sections. This strategy has been very cost effective and Southwest passes the savings on to the customer. They chose to focus on pleasure travelers and low-income travelers opposed to business travelers. This allowed them to take advantage of a market, which was often ignored by other airlines.…
Spirit Airlines (SAVE) is an ultra low-cost, low-fare based in Fort Lauderdale, Florida that provides affordable travel opportunities. The IPO for Sprit airlines was offered on June 11th, 2011. The price of the stock at the IPO date was of $12.00. According to NASDAQ.com, the money that was raised on the IPO was $187.2 million dollars, with 5 million dollars in expenses. After the underwriting cost eliminated they approximately raised171.0 million.…
As Southwest continues expanding, it is important that they maintain the low cost structure that has made them so successful historically. As larger and more congested destinations are added to Southwest’s routes, they must focus on customer service as the on-time arrivals and other metrics are certain to deteriorate. Additionally, in order to protect from volatile fuel prices, it would be prudent to expand the fuel-efficiency of the fleet by capitalizing on Boeing’s most recent advances. Southwest must also maintain its position as the “hassle-free” low-cost carrier, with more subtle method of collecting additional fees than checked baggage and reservation changes.…
Southwest Airlines has been making changes over the past few years that helped them become the largest low-cost carrier in the United States. Most other airlines have been struggling to make it through this economy, but Southwest has found a way to thrive. The airline has dropped their prices and eliminated fees for extras that have allowed them to fill up most flights. One cost they continue to struggle with is offsetting the increasing fuel prices. This has caused some airlines to merge or sell the company to competitors.…
Southwest’s primary strategy is to minimize its own operating costs so that it can then offer the lowest possible fares to its customers. It is able to accomplish this by scheduling frequent, short point-to-point flights out of underutilized airports without a central hub. Its service is very straightforward, without pre-assigned seating or meal service, and one simple pricing structure. Southwest only uses fuel efficient 737s, which also allows them to save on maintenance and training costs. All these efforts have proven successful, as Southwest has managed to achieve the lowest operating cost structure in the industry.…
Spirit Airlines is universally known for its ultra-low-cost, low-fare airline services that provide affordable travel opportunities throughout the United States, the Caribbean and Latin America (Spirit Airlines, 2012). Maintaining a strategically low-cost structure directly aligns with Spirit Airline’s target market, which allows the company to offer low priced basic services combined with a range of optional services for additional fees (Spirit Airline, 2012). The airline has earned a reputation for delivering cost effective fares and reliable on-time service with a no frills. In order to realize maximum growth, enhancements to the existing low cost strategy must be implemented to create a greater advantage in the market.…
One of the most noticeable risks faced by the airline industry is price wars that occur when one airline cuts fares on certain routes and forces others to follow suit resulting in reduced profitability. Southwest has almost eliminated this risk by developing a fare structure that is consistently by far the simplest and most straightforward of any major airline. All of Southwest 's customers can peruse different fare options at the company 's website, and the company 's restrictions on tickets are more lenient than fares of its rivals. Most other airlines have complex fare structures with ticket prices varying widely according to several factors such as, how far in advance a ticket is purchased; travel dates including a Saturday-night stay; refundable or transferable, and an assortment of other factors (Thompson|…
Southwest Airlines Company, an American low-cost airline is the third largest airline in the world as well as the U.S.A. by the number of passenger aircraft among all of the world 's commercial airlines (Arlene Fleming, About.com Guide; www.nationsonline.org), operating more than 540 Boeing 737 aircraft today between 67 cities in the U.S.A. (Southwest Airlines Fact Sheet of 2008). Today, Southwest operates approximately 3,300 flights daily and boasts of being the only major airline to post profits every year for the last thirty six years. It justifiably claims to be the United States’ most successful low-fare, high frequency, point-to-point carrier (www.southwest.com).…
American Airlines uses a value-based pricing strategy for their airline fair. All fairs are mileage-related. Consumers have the options of Economy Class, Business Class, and First/Premium Class. Compared to other major US Airways, American Airlines provides competitive rates for round-trip and direct flights. (Yahoo Finance)…
Basketball is a very common sport that originated in 1891, when a Minister by the name of James Naismith was appointed to teach a P.E class at a YMCA training school in Springfield, Massachusetts. He started by creating a ball, then cutting a big round hole on the bottom of a basket and nailing it to the wall. His students loved the game. It’s physical, funny at times, competitive, challenging, and easy. You can learn new moves, lay up finishers, shooting ranges, passing skills, and more. Basketball pro players make up to $100,000 a game. They make at least $5,000 just for being there. Off of the court in the pros, you can most likely gain popularity and skill throughout the time span that you play until you make it to the big league.…
Does Ron Howard tend to ‘sugar coat’ the characters and stories in his films, sticking with a ‘white bread’ theme which makes the film out of touch with reality.…