Professional Documents
Culture Documents
Southwest Airlines is a major U.S. airline that primarily provides short haul, high frequency,
point- to point, low fare service. Southwest was incorporated in Texas and commenced
operations on June 18, 1971 with three Boeing 737 aircraft serving three Texas cities- Dallas,
Houston, and San Antonio. Today Southwest operates nearly 400 Boeing 737 aircraft to 59 U.S.
cities. Southwest has the lowest operating cost structure in the domestic airline industry and
consistently offers the lowest and simplest fares. Southwest also has one of the best overall
customer service records.
Statement of the problem: With the escalating fuel prices, ever-escalating operational costs,
potential threats, and the global economic crisis, can Southwest Airlines maintain its
profitability?
Objectives:
1. To continue the short-haul approach and point-to-point flights coupled with high
employee retention to maintain their customer service.
2. To meet the performance objective of profitability.
3. To nurture the existing corporate culture and to modernize part of the fleet to provide a
better interior and customer experience.
SWOT
Strengths
1.
2.
3.
4.
5.
6.
7.
8.
Weakness
1. Declining profits and margins
2. Heavy dependence on passenger revenues
3. Heavy dependence on a single producer Boeing
4.
5.
6.
7.
Opportunities
1.
1.
2.
3.
4.
5.
6.
Threats
1.
2.
3.
4.
5.
Intense competition
Regulation restrictions
Price fluctuations in petroleum markets
High unemployment and inflation keeps travellers from flying
Joint ventures can negatively affect brand image
SWOT ANALYSIS
INTERNAL
EXTERNAL
STRENGTHS
1. Strong fleet operations
2. Friendly Staff
3. Best low fare carrier
4. Largest airlines in the
world in terms of highest
number of passengers
per year
5. Recognized as a great
value and excellent
services
6. Flexible working hours
even though 82% of
employees are unionized
7. Strong brand image
8. Highest daily domestic
WEAKNESSES
1. Declining profits and
margins
2. Heavy dependence on
passenger revenues
3. Heavy dependence on a
single producer Boeing
4. Conservative growth
strategy
5. Limited to cities
domestically
6. Operates its own
booking service
7. Does not offer
segmentation (business
flights, first class, etc.)
OPPORTUNTIES
1. National and international
markets
2.Growth of older generation
3. Research and development
4.Vertical integration
5.New technology opens the
door for new products/services
6.Longer flights
7. Growth of business and
leisure travel
THREATS
1. Intense competition
2. Regulation restrictions
3. Price fluctuations in
petroleum markets
4. High unemployment and
inflation keeps travelers
from flying
5. Joint ventures can
negatively affect brand
image
SO
WO
WT
-Due to the intense competition,
Southwest airlines should
increase the number of cities
domestically and not only to the
limited cities.
Strategy Mix
Objective
Schedule
1. To continue the short- 1-2 years
haul approach and pointto-point flights coupled
with high employee
retention to maintain
their customer service.
2.
To
meet
the 1-2 years
performance objective of
profitability.
Output
Organized flight
schedules,
avoiding delays,
for maintaining
and possibly
increasing
customer
service and
satisfaction
Increase in
performance
can lead to
greater
profitability
Customer
experience and
satisfaction will
increase.
Budget
N/A
Person Responsible
Management
Department
N/A
Management
Department
N/A
Management
Department
Conclusion
Southwest Airlines built numbers on its culture where as most competitors let the culture
to shape up by their focus on numbers. The group concludes that they should maintain the best
low fare carrier to attract passengers and so the number of passengers will increase.