Southwest airline case analysis

southwest airlines case study operations management

They provide the lowest possible fare in the industry. They have respected the basic requirement of any passenger i. Its Cost Leadership is one of its vital factors which it has been able to stay ahead of its rivals.

At one point they have stressed on maintaining a lower cost structure by keeping a standardized fleet with minimal inflight meal and entertainment amenities, a workforce motivated for quick aircraft turnaround and an aggressive fuel hedging program, however at the same time they have equally stressed on winning customer satisfaction which is seen by their stupendous customer retention.

It remained the core for globalization due to its involvement in international investments and world trade. But during the early years of s the industry was hit with recession, Gulf war and the effects of deregulation in In the number of passengers decreased with an effect on the financial results which were already at war with the excess capacity losses due to overbuying of aircrafts in the s.

Moreover, it would allow the company to expand its presence in slot-controlled markets where the company currently has little New York LaGuardia or no Ronald Reagan Washington National Airport service; expand its service in other key domestic markets, including Boston and Baltimore and to add destinations to its route system; and provide access to near-international leisure markets in the Caribbean and Mexico, as well as smaller cities.

At the same time South West focuses on differentiating itself on the basis of the service, operations, cost control, marketing, its people and corporate culture. Its hiring process which lays stress on applicants possessing teamwork skills and optimistic outlook has helped it shape a dynamic and motivated workforce which not only helps in smooth functioning of an informal horizontal organization but also promotes accountability among the employees not just as individual but as a team.

Also requires more employees. Changing Consumer Perception: Several low fare airlines were introduced during those times that changed the whole perception of people towards air-travel.

The management of Southwest Airlines is considered to be the most dynamic of all time.

Southwest airlines case study course hero

No other carrier can practically think of depending too much on its on-board staff in absence of any kind of inflight entertainment. On average there are 94 employees per Southwest aircraft in contrast to competitors who have , and the Southwest staff serve on average passengers per year compared to competitors How would you characterize the business model of Southwest Airlines? They provide the lowest possible fare in the industry. Southwest Airlines is popular for asking its candidates one time to change from suit clothing to Bermuda shorts. With its punctual flight record, pleasantly approachable staff, impressive Customer service, despite the fact that it offers no-frills, there is still a high degree of customer satisfaction that continuously builds customer loyalty for the company. This leaves South West with not much competition in the industry. None of them would be possible if the ground staff is not dedicated. Rather than focusing on increasing the load factor, the airlines started to work towards increasing the overall productivity with increased profitability through economies of scale. Hence, we can see how Southwest Airlines was successful in able to maintain both Cost effectiveness as well as Customer loyalty and retention, through its innovative and foresighted strategies.

Its method of offering differentiated products like Rapid Rewards frequent flyer program have made it stand apart in the LCC sector.

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Southwest Airlines : Case Study