Case Analysis On Southwest Airlines

COMPANY OVERVIEW

Entered The Aviation Industry In 1971With Little Money

But Lots Of Personality

Has scheduled services to 97 destinations in 40 states and operates more than 3800 flights per day

And maintains a top safety record

BUSINESS MODEL

Based on streamlining its operations

Finding Market Gaps

Enter markets where other airlines overprice and under deserve

And brings fares down by one third to one half

The company has been profitable for 43 consecutive years

PRICING POLICY

Low fares and satisfied customers

Cost Saving Strategy

Operating in secondary cities with smaller airports that have lower gate fees and less congestion

Operating Boeing 737s for all flights

Simplifies and increases operational efficiency resulting in cost saving

Fuel Hedging

This early fuel purchasing strategy has saved the company more than 2 billion dollars

Lighter Planes

MARKETING AND BRANDING

Markets not just a service but also an experience

Central Positioning

Lighthearted attitude with songs and entertaining on-board announcements

POINT OF DIFFERENCE

Constant reminder of the low fare POD of the company through witty commercials

INTERNAL BRANDING

Southwest employees care about each other the same way they care about their customers.

EMPLOYEE RESPECT

In 2004 Southwest closed reservation centers in three cities but did not fire a single employee and paid for their relocation and commuting expenses instead

SUMMARY

DISCLAIMER

Created by Sreedhar Radhakrishnan, PES University Bangalore during a marketing internship by Prof. Sameer Mathur, IIM Lucknow.