This was a research project that our Business Strategy class completed in 2007. This is an evaluation of Southwest Airlines and its position in the market. We evaluated growth and future prospects with a heavily consolidating industry.
Southwest Airlines has experienced strong financial stability and growth since 1971 through their low cost leadership strategy. They have strengths in their iconic branding, strong domestic demand, and high employee morale. However, they face weaknesses in limited revenue opportunities and flight availability, as well as threats from increased competition and rising costs. Going forward, Southwest should look to capitalize on opportunities presented by population growth, new technology, and their 2015 international expansion, while addressing weaknesses and threats through diversifying revenue streams and controlling costs.
The document provides an overview of Southwest Airlines, including its culture, values, operating practices, history, and financial performance. Southwest Airlines was founded in 1971 and pioneered low-cost, high-frequency, point-to-point air travel. It focuses on customer service and maintaining a fun, people-oriented company culture. Southwest has experienced strong financial performance and growth over the past decades to become one of the largest airlines in the US.
Southwest Airlines in 2014: Culture, Values, and Operating PracticesTran Thang
This Presentation answer these questions:
1. Is there anything that you find particularly impressive about Southwest Airlines?
2. What grade would you give Southwest management for the job it has done in crafting the company’s strategy? What is it that you like or dislike about the strategy? Does Southwest have a winning strategy?
3. What are the key policies, procedures, operating practices, and core values underlying Southwest’s efforts to implement and execute its low-cost/no frills strategy?
4. What are the key elements of Southwest’s culture? Is Southwest a strong culture company? Why or why not?
5. What grade would you give Southwest management for the job it has done in implementing and executing the company’s strategy? Which of Southwest’s strategy execution approaches and operating practices do you believe have been most crucial in accounting for the success that Southwest has enjoyed in executing its strategy? Are there any policies, procedures, and operating approaches at Southwest that you disapprove of
or that are not working well?
6. What weaknesses or problems do you see at Southwest Airlines as of mid-2014?
7. Do you approve of the AirTran acquisition and the way that Southwest has gone about integrating AirTran
into its operations? Is the integration taking too long? Why go so slow?
Southwest Airlines Co. (NYSE: LUV) is an American low-cost airline. The airline has its headquarters on the grounds of Dallas Love Field in Dallas, Texas.
Southwest is the largest airline in the world by number of passengers carried per year (as of 2009) Southwest maintains the third-largest passenger fleet of aircraft among all of the world's commercial airlines. As of May 3, 2009, Southwest operates approximately 3,510 flights daily.
Southwest Airlines has carried more passengers than any other U.S. airline since August 2006 for combined domestic and international passengers according to the U.S. Department of Transportation's Bureau of Transportation Statistics. Southwest Airlines is one of the world’s most profitable airlines, posting a profit for the 37th consecutive year in January 2010.
- Ryanair announced a new route between London and Dublin in 1986 using a 44-seat plane with 4 daily round trips
- Ryanair estimated annual revenues of over 6 million Irish pounds assuming 100% occupancy of flights
- Ryanair estimated much lower annual costs of around 95,000 Irish pounds per ticket compared to British Airways' 155,000 Irish pounds per ticket for the same route
- This would give Ryanair an estimated annual profit of over 205,000 Irish pounds from the new route
- Aer Lingus could respond by lowering prices and accepting losses in the short term, or focus on other business lines besides passenger flights
- British Airways, as a larger government-supported carrier, was less concerned about
Southwest Airlines faced challenges in the early 2000s as legacy carriers had for some time. As long-time employees retired, there was a risk the company's low-cost culture could change. An analyst from Morgan Stanley noted in 2004 that Southwest may face the same issues other carriers experienced as a new generation of employees joined without experiencing the early struggles. While Southwest had success for 31 years, labor problems, rising costs, and new low-cost competition threatened its model in the 2000s, requiring a shift in practices to preserve the unique culture at the airline's core.
Southwest Airlines has maintained profitability for 36 consecutive years despite challenges from increasing fuel costs, economic downturns, and competitive threats. Key questions examined were whether Southwest could continue relying on fuel hedging for cost control, if its point-to-point model would remain effective as it expands, and if major airlines adopting low-cost strategies would threaten Southwest. Southwest was also discussed expanding internationally using its 737 fleet and maintaining positive employee and customer relations crucial to its low-cost advantage.
This was a research project that our Business Strategy class completed in 2007. This is an evaluation of Southwest Airlines and its position in the market. We evaluated growth and future prospects with a heavily consolidating industry.
Southwest Airlines has experienced strong financial stability and growth since 1971 through their low cost leadership strategy. They have strengths in their iconic branding, strong domestic demand, and high employee morale. However, they face weaknesses in limited revenue opportunities and flight availability, as well as threats from increased competition and rising costs. Going forward, Southwest should look to capitalize on opportunities presented by population growth, new technology, and their 2015 international expansion, while addressing weaknesses and threats through diversifying revenue streams and controlling costs.
The document provides an overview of Southwest Airlines, including its culture, values, operating practices, history, and financial performance. Southwest Airlines was founded in 1971 and pioneered low-cost, high-frequency, point-to-point air travel. It focuses on customer service and maintaining a fun, people-oriented company culture. Southwest has experienced strong financial performance and growth over the past decades to become one of the largest airlines in the US.
Southwest Airlines in 2014: Culture, Values, and Operating PracticesTran Thang
This Presentation answer these questions:
1. Is there anything that you find particularly impressive about Southwest Airlines?
2. What grade would you give Southwest management for the job it has done in crafting the company’s strategy? What is it that you like or dislike about the strategy? Does Southwest have a winning strategy?
3. What are the key policies, procedures, operating practices, and core values underlying Southwest’s efforts to implement and execute its low-cost/no frills strategy?
4. What are the key elements of Southwest’s culture? Is Southwest a strong culture company? Why or why not?
5. What grade would you give Southwest management for the job it has done in implementing and executing the company’s strategy? Which of Southwest’s strategy execution approaches and operating practices do you believe have been most crucial in accounting for the success that Southwest has enjoyed in executing its strategy? Are there any policies, procedures, and operating approaches at Southwest that you disapprove of
or that are not working well?
6. What weaknesses or problems do you see at Southwest Airlines as of mid-2014?
7. Do you approve of the AirTran acquisition and the way that Southwest has gone about integrating AirTran
into its operations? Is the integration taking too long? Why go so slow?
Southwest Airlines Co. (NYSE: LUV) is an American low-cost airline. The airline has its headquarters on the grounds of Dallas Love Field in Dallas, Texas.
Southwest is the largest airline in the world by number of passengers carried per year (as of 2009) Southwest maintains the third-largest passenger fleet of aircraft among all of the world's commercial airlines. As of May 3, 2009, Southwest operates approximately 3,510 flights daily.
Southwest Airlines has carried more passengers than any other U.S. airline since August 2006 for combined domestic and international passengers according to the U.S. Department of Transportation's Bureau of Transportation Statistics. Southwest Airlines is one of the world’s most profitable airlines, posting a profit for the 37th consecutive year in January 2010.
- Ryanair announced a new route between London and Dublin in 1986 using a 44-seat plane with 4 daily round trips
- Ryanair estimated annual revenues of over 6 million Irish pounds assuming 100% occupancy of flights
- Ryanair estimated much lower annual costs of around 95,000 Irish pounds per ticket compared to British Airways' 155,000 Irish pounds per ticket for the same route
- This would give Ryanair an estimated annual profit of over 205,000 Irish pounds from the new route
- Aer Lingus could respond by lowering prices and accepting losses in the short term, or focus on other business lines besides passenger flights
- British Airways, as a larger government-supported carrier, was less concerned about
Southwest Airlines faced challenges in the early 2000s as legacy carriers had for some time. As long-time employees retired, there was a risk the company's low-cost culture could change. An analyst from Morgan Stanley noted in 2004 that Southwest may face the same issues other carriers experienced as a new generation of employees joined without experiencing the early struggles. While Southwest had success for 31 years, labor problems, rising costs, and new low-cost competition threatened its model in the 2000s, requiring a shift in practices to preserve the unique culture at the airline's core.
Southwest Airlines has maintained profitability for 36 consecutive years despite challenges from increasing fuel costs, economic downturns, and competitive threats. Key questions examined were whether Southwest could continue relying on fuel hedging for cost control, if its point-to-point model would remain effective as it expands, and if major airlines adopting low-cost strategies would threaten Southwest. Southwest was also discussed expanding internationally using its 737 fleet and maintaining positive employee and customer relations crucial to its low-cost advantage.
This is a recent brand audit some classmates and I did on Southwest. It\'s always interesting to dig into a brand you know and respect. We found some interesting insights about where the airline has been and where they are going.
Southwest Airlines links employee satisfaction to competitive advantage by creating value through treating employees well and focusing on "LUV" and "FUN". This creates high employee performance which improves quality and reduces costs. Employees then work to convert this value into customer and shareholder satisfaction through good training and procedures. Finally, Southwest captures value by setting low prices enabled by their low-cost position. Key to their success is focusing on human resources and giving value to employees. Competitive threats include other airlines, high fuel costs, a soft economy, and potential disasters.
The document provides an overview of Southwest Airlines, including its history, operations, target markets, key success factors, and competitive position within the US airline industry. Southwest is the largest low-cost carrier in the US, with a focus on short-haul, point-to-point routes. It aims to provide safe, comfortable air travel at low prices. The airline's strengths include its low costs, operational efficiency, and customer service culture.
Southwest Airlines has been profitable for 37 years through a unique low-cost business model. They streamline operations to save money and pass savings to customers through low fares. Southwest flies short point-to-point routes daily using Boeing 737 aircraft, turns planes around extremely fast, hedges fuel prices to save billions, and pioneered services like same-day freight. Their consistency in earning profits even during industry problems allows flexibility that burdened carriers lack. However, always running half-full flights and price wars present risks to maintaining low fares long-term.
Southwest Airlines began in 1967 with an idea sketched on a cocktail napkin. It officially incorporated on March 15, 1967 to provide air service between three Texas cities. Southwest faced legal challenges from established carriers but ultimately prevailed, helping deregulate the airline industry. Through strategies like the 10-minute turnaround and offering free liquor with tickets, Southwest established a low-cost leadership model. It has grown to be the largest carrier in the U.S. based on number of passengers by focusing on point-to-point routes, secondary airports, and differentiation through its culture and frequent flyer program.
AirAhead Airlines is proposing a new low-cost airline to operate in the Vancouver, Canada market. The business plan outlines AirAhead's service offering of short-haul regional flights using Bombardier Q400 aircraft. It discusses marketing strategies, competitors, risks, operating objectives to establish itself in the short-haul market, and financial needs including an initial capital requirement of $50 million. Implementation will focus on centralized operations and marketing primarily to the leisure market to achieve market presence in the niche regional travel segment.
American Airlines was facing declining profits in the early 1990s despite being the largest carrier in the US. Their costs per seat mile were rising while net income was falling. To address this, in 1992 American introduced a "Value Pricing" strategy that offered lower fares for tickets purchased further in advance, with penalties for changes. This targeted business travelers who accounted for 60% of revenue and were less price sensitive. While short-term losses were expected from advertising, analysis showed the approach would improve profits long-term by better utilizing existing capacity and increasing market share. The strategy also risked losing some leisure travelers, so expanding discount periods was recommended to retain them.
Southwest Airlines has been successful since 1971 by maintaining a low-cost structure and offering low fares. Key issues they face include rising costs of operations and competitive/economic factors. Their mission is dedicated customer service with warmth and friendliness. They pursue strategies of broad differentiation, low costs and fares to achieve objectives of maintaining low costs while offering low fares.
JetBlue was founded in 1999 with a mission to bring humanity back to air travel. Over the next decade, JetBlue grew rapidly by focusing on point-to-point routes rather than hubs, offering amenities like satellite TV and extra legroom, and implementing technology like online booking. By 2011, JetBlue had partnered with other airlines to expand its international routes while continuing to prioritize low costs, high customer satisfaction, and a strong brand.
Southwest uses humor in its advertising to showcase a friendly personality. It focuses on low fares, frequent flights, on-time arrivals, and safety. Southwest's business model is streamlined for low costs through operating a single aircraft type and fast turnarounds. A productive workforce driven by good HR policies helps Southwest maintain profitability for 37 years, allowing flexibility that competitors lack.
Emirates is the world's largest international airline, flying to 158 destinations in 85 countries using 269 aircraft, mostly Airbus A380s and Boeing 777s. Emirates is known as one of the world's best carriers due to its fantastic service across all classes and modern aircraft. The airline's marketing strategy focuses on products in first, business, and economy class, a global network of over 3,500 weekly flights, premium pricing, and advertising, sponsorships, and digital promotions. Emirates' vision is to maintain international recognition as a leading aviation company, while its mission focuses on safety and security for customers, staff, and assets.
Southwest Airlines is a major US airline that has been profitable for 44 consecutive years. It aims to be the world's most loved airline through low fares, outstanding customer service, and fun-loving culture. While it has historically focused on domestic US routes, its future strategy involves international expansion into markets like Canada, Mexico, the Caribbean and Europe. It will seek to maintain its low cost leadership through measures like single aircraft type, point-to-point routes, and fuel hedging, while bringing its unique corporate culture and customer experience to new global markets.
Southwest Airlines was founded in 1971 with a unique low-cost business model focused on quick turnarounds and customer satisfaction. It spread throughout the "Golden Triangle" region of Texas and emphasized a fun-loving culture. Southwest achieved great financial success in the 1990s and developed a reputation for excellent customer service. It continues to focus on low costs, high employee satisfaction, and putting customers first.
This document provides an overview of American Airlines presented by Group 6. It includes sections on the company history, market structure, competitive advantages, game theory/pricing approaches, and industry updates. The presentation covers topics such as American Airlines' founding and expansion in the 1930s-1980s, the impact of deregulation in 1978, their innovation with SABRE and frequent flyer programs, and current industry leaders. It also includes a quiz and bibliography.
Southwest Airlines grew rapidly in its first six years to become the 11th largest airline in the United States. It utilized a low-cost strategy by avoiding meals, using newer planes to reduce costs, and operating from secondary airports. The airline targeted underserved customers and those seeking affordable flights. Through effective technology use and automated processes, Southwest remained profitable after the 9/11 attacks when other airlines struggled. The document discusses Southwest's vision, strategies, SWOT analysis, and responses to insight questions about its approach.
The document discusses the challenges facing the US airline industry, including rising costs, excess capacity, and increased competition from low-cost carriers. It notes that the industry's financial problems predate 9/11 and that major restructuring will be needed for the legacy carriers to adapt to current market conditions and regain profitability. Code-sharing agreements between carriers are seen as one way to cut costs through increased cooperation.
Southwest Airlines started in 1971 with 3 aircraft and focused on keeping costs low to offer low fares. By emphasizing excellent customer service and a fun, supportive company culture, Southwest was able to achieve significant growth and market share. However, increased competition from other low-cost carriers poses a threat going forward. To sustain its success, Southwest will need to maintain its unique culture while continuing to find new ways to improve efficiency and reduce costs.
Southwest Airlines was expecting delivery of two new planes and needed to decide how to operate them while preserving their unique culture. Southwest pioneered the low-cost carrier model with low fares, high frequency flights, and a focus on customer service. They prioritized hiring for attitude over skills and emphasized teamwork and employee ownership to build a fun and casual culture. The case discusses how Southwest could expand strategically while maintaining their low-cost advantages and culture.
With 40 consecutive years of profitability, Dallas-based Southwest Airlines (NYSE: LUV) continues to differentiate itself from other carriers with exemplary Customer Service delivered by nearly 46,000 Employees to more than 100 million Customers annually. On May 2, 2011, Southwest completed the acquisition of AirTran Holdings, Inc., and now operates AirTran Airways as a wholly-owned subsidiary. Southwest is the nation’s largest carrier in terms of originating domestic passengers boarded and, including AirTran, operates the largest fleet of Boeing aircraft in the world to serve 96 destinations in 41 states, the District of Columbia, the Commonwealth of Puerto Rico, and five near-international countries. Southwest has lower unit costs (adjusted for stage length), on average, than virtually all major domestic airlines and consistently has one of the best overall Customer Service records. Southwest’s all-Boeing fleet consistently offers leather seating and the comfort of full-size cabins. The majority of Southwest’s fleet is equipped with a new, eco-friendly cabin interior, and satellite-based WiFi connectivity, including a new inflight entertainment portal, which gives Customers the ability to watch live TV, news, sports, and movies.
This document provides an overview of Southwest Airlines, including its history, vision, goals, growth opportunities, current situation, and SWOT analysis. Southwest was founded in 1971 and operates over 550 Boeing 737 aircraft across 32 states. Its vision is to provide low-cost air transportation using secondary airports. Goals include attracting more business/leisure travelers with low fares and good customer service. Growth opportunities exist in entering new markets and potentially expanding internationally to Mexico and Canada. The current situation outlines its financial performance and route network. A SWOT analysis identifies strengths like low costs and weaknesses like lack of alliances.
Article review on Strategic Methods for cost cutting and increasing profits i...TDakshinamurthyMBAKB
This paper discusses various strategic methods for airline companies to reduce costs and optimize profits. It examines strategies across the value chain like route optimization, fuel hedging, leasing negotiations, alternative fuels, and cooperation among airlines. It also forecasts the number of global airline passengers in 2025 using linear regression. Various cost-cutting strategies are mapped in a table. The paper provides a theoretical perspective on approaches airlines can consider to improve financial performance.
Southwest Financial note by - Jean Lemercier, Cécilia Cosnard des Closets, Charline Poher, Derek Fleck and Violaine Lièvre. Including risk assessment, peers comparison, internal financial analysis and environmental analysis.
This is a recent brand audit some classmates and I did on Southwest. It\'s always interesting to dig into a brand you know and respect. We found some interesting insights about where the airline has been and where they are going.
Southwest Airlines links employee satisfaction to competitive advantage by creating value through treating employees well and focusing on "LUV" and "FUN". This creates high employee performance which improves quality and reduces costs. Employees then work to convert this value into customer and shareholder satisfaction through good training and procedures. Finally, Southwest captures value by setting low prices enabled by their low-cost position. Key to their success is focusing on human resources and giving value to employees. Competitive threats include other airlines, high fuel costs, a soft economy, and potential disasters.
The document provides an overview of Southwest Airlines, including its history, operations, target markets, key success factors, and competitive position within the US airline industry. Southwest is the largest low-cost carrier in the US, with a focus on short-haul, point-to-point routes. It aims to provide safe, comfortable air travel at low prices. The airline's strengths include its low costs, operational efficiency, and customer service culture.
Southwest Airlines has been profitable for 37 years through a unique low-cost business model. They streamline operations to save money and pass savings to customers through low fares. Southwest flies short point-to-point routes daily using Boeing 737 aircraft, turns planes around extremely fast, hedges fuel prices to save billions, and pioneered services like same-day freight. Their consistency in earning profits even during industry problems allows flexibility that burdened carriers lack. However, always running half-full flights and price wars present risks to maintaining low fares long-term.
Southwest Airlines began in 1967 with an idea sketched on a cocktail napkin. It officially incorporated on March 15, 1967 to provide air service between three Texas cities. Southwest faced legal challenges from established carriers but ultimately prevailed, helping deregulate the airline industry. Through strategies like the 10-minute turnaround and offering free liquor with tickets, Southwest established a low-cost leadership model. It has grown to be the largest carrier in the U.S. based on number of passengers by focusing on point-to-point routes, secondary airports, and differentiation through its culture and frequent flyer program.
AirAhead Airlines is proposing a new low-cost airline to operate in the Vancouver, Canada market. The business plan outlines AirAhead's service offering of short-haul regional flights using Bombardier Q400 aircraft. It discusses marketing strategies, competitors, risks, operating objectives to establish itself in the short-haul market, and financial needs including an initial capital requirement of $50 million. Implementation will focus on centralized operations and marketing primarily to the leisure market to achieve market presence in the niche regional travel segment.
American Airlines was facing declining profits in the early 1990s despite being the largest carrier in the US. Their costs per seat mile were rising while net income was falling. To address this, in 1992 American introduced a "Value Pricing" strategy that offered lower fares for tickets purchased further in advance, with penalties for changes. This targeted business travelers who accounted for 60% of revenue and were less price sensitive. While short-term losses were expected from advertising, analysis showed the approach would improve profits long-term by better utilizing existing capacity and increasing market share. The strategy also risked losing some leisure travelers, so expanding discount periods was recommended to retain them.
Southwest Airlines has been successful since 1971 by maintaining a low-cost structure and offering low fares. Key issues they face include rising costs of operations and competitive/economic factors. Their mission is dedicated customer service with warmth and friendliness. They pursue strategies of broad differentiation, low costs and fares to achieve objectives of maintaining low costs while offering low fares.
JetBlue was founded in 1999 with a mission to bring humanity back to air travel. Over the next decade, JetBlue grew rapidly by focusing on point-to-point routes rather than hubs, offering amenities like satellite TV and extra legroom, and implementing technology like online booking. By 2011, JetBlue had partnered with other airlines to expand its international routes while continuing to prioritize low costs, high customer satisfaction, and a strong brand.
Southwest uses humor in its advertising to showcase a friendly personality. It focuses on low fares, frequent flights, on-time arrivals, and safety. Southwest's business model is streamlined for low costs through operating a single aircraft type and fast turnarounds. A productive workforce driven by good HR policies helps Southwest maintain profitability for 37 years, allowing flexibility that competitors lack.
Emirates is the world's largest international airline, flying to 158 destinations in 85 countries using 269 aircraft, mostly Airbus A380s and Boeing 777s. Emirates is known as one of the world's best carriers due to its fantastic service across all classes and modern aircraft. The airline's marketing strategy focuses on products in first, business, and economy class, a global network of over 3,500 weekly flights, premium pricing, and advertising, sponsorships, and digital promotions. Emirates' vision is to maintain international recognition as a leading aviation company, while its mission focuses on safety and security for customers, staff, and assets.
Southwest Airlines is a major US airline that has been profitable for 44 consecutive years. It aims to be the world's most loved airline through low fares, outstanding customer service, and fun-loving culture. While it has historically focused on domestic US routes, its future strategy involves international expansion into markets like Canada, Mexico, the Caribbean and Europe. It will seek to maintain its low cost leadership through measures like single aircraft type, point-to-point routes, and fuel hedging, while bringing its unique corporate culture and customer experience to new global markets.
Southwest Airlines was founded in 1971 with a unique low-cost business model focused on quick turnarounds and customer satisfaction. It spread throughout the "Golden Triangle" region of Texas and emphasized a fun-loving culture. Southwest achieved great financial success in the 1990s and developed a reputation for excellent customer service. It continues to focus on low costs, high employee satisfaction, and putting customers first.
This document provides an overview of American Airlines presented by Group 6. It includes sections on the company history, market structure, competitive advantages, game theory/pricing approaches, and industry updates. The presentation covers topics such as American Airlines' founding and expansion in the 1930s-1980s, the impact of deregulation in 1978, their innovation with SABRE and frequent flyer programs, and current industry leaders. It also includes a quiz and bibliography.
Southwest Airlines grew rapidly in its first six years to become the 11th largest airline in the United States. It utilized a low-cost strategy by avoiding meals, using newer planes to reduce costs, and operating from secondary airports. The airline targeted underserved customers and those seeking affordable flights. Through effective technology use and automated processes, Southwest remained profitable after the 9/11 attacks when other airlines struggled. The document discusses Southwest's vision, strategies, SWOT analysis, and responses to insight questions about its approach.
The document discusses the challenges facing the US airline industry, including rising costs, excess capacity, and increased competition from low-cost carriers. It notes that the industry's financial problems predate 9/11 and that major restructuring will be needed for the legacy carriers to adapt to current market conditions and regain profitability. Code-sharing agreements between carriers are seen as one way to cut costs through increased cooperation.
Southwest Airlines started in 1971 with 3 aircraft and focused on keeping costs low to offer low fares. By emphasizing excellent customer service and a fun, supportive company culture, Southwest was able to achieve significant growth and market share. However, increased competition from other low-cost carriers poses a threat going forward. To sustain its success, Southwest will need to maintain its unique culture while continuing to find new ways to improve efficiency and reduce costs.
Southwest Airlines was expecting delivery of two new planes and needed to decide how to operate them while preserving their unique culture. Southwest pioneered the low-cost carrier model with low fares, high frequency flights, and a focus on customer service. They prioritized hiring for attitude over skills and emphasized teamwork and employee ownership to build a fun and casual culture. The case discusses how Southwest could expand strategically while maintaining their low-cost advantages and culture.
With 40 consecutive years of profitability, Dallas-based Southwest Airlines (NYSE: LUV) continues to differentiate itself from other carriers with exemplary Customer Service delivered by nearly 46,000 Employees to more than 100 million Customers annually. On May 2, 2011, Southwest completed the acquisition of AirTran Holdings, Inc., and now operates AirTran Airways as a wholly-owned subsidiary. Southwest is the nation’s largest carrier in terms of originating domestic passengers boarded and, including AirTran, operates the largest fleet of Boeing aircraft in the world to serve 96 destinations in 41 states, the District of Columbia, the Commonwealth of Puerto Rico, and five near-international countries. Southwest has lower unit costs (adjusted for stage length), on average, than virtually all major domestic airlines and consistently has one of the best overall Customer Service records. Southwest’s all-Boeing fleet consistently offers leather seating and the comfort of full-size cabins. The majority of Southwest’s fleet is equipped with a new, eco-friendly cabin interior, and satellite-based WiFi connectivity, including a new inflight entertainment portal, which gives Customers the ability to watch live TV, news, sports, and movies.
This document provides an overview of Southwest Airlines, including its history, vision, goals, growth opportunities, current situation, and SWOT analysis. Southwest was founded in 1971 and operates over 550 Boeing 737 aircraft across 32 states. Its vision is to provide low-cost air transportation using secondary airports. Goals include attracting more business/leisure travelers with low fares and good customer service. Growth opportunities exist in entering new markets and potentially expanding internationally to Mexico and Canada. The current situation outlines its financial performance and route network. A SWOT analysis identifies strengths like low costs and weaknesses like lack of alliances.
Article review on Strategic Methods for cost cutting and increasing profits i...TDakshinamurthyMBAKB
This paper discusses various strategic methods for airline companies to reduce costs and optimize profits. It examines strategies across the value chain like route optimization, fuel hedging, leasing negotiations, alternative fuels, and cooperation among airlines. It also forecasts the number of global airline passengers in 2025 using linear regression. Various cost-cutting strategies are mapped in a table. The paper provides a theoretical perspective on approaches airlines can consider to improve financial performance.
Southwest Financial note by - Jean Lemercier, Cécilia Cosnard des Closets, Charline Poher, Derek Fleck and Violaine Lièvre. Including risk assessment, peers comparison, internal financial analysis and environmental analysis.
SouthWest
SouthWest
Company name, website and industry
The company I would be analyzing is Southwest Airlines which operates in the Airline industry. The website of the company is https://www.southwest.com.
Background and history of southwest Airlines
Southwest Airlines was founded in 1967 and it stands as the premier low-cost air carrier in the United States. The company was incorporated by Rollin King and Herb Kelleher on March 16, 1967 (Lauer, 2010). As of 2013, the company had a fleet of 579 planes and flies between eighty-nine destinations. It has the reputation of being the highest utilized airline by American citizens for domestic flights with an operation of about 3,400 flights each day. In 2012, the company had an annual revenue of $17 billion (Hill & Jones, 2013). Its current chief executive officer is Gary C. Kelly who has received several honors, including being the best CEO in the US for 2008, 2009 and 2010 (Hill & Jones, 2013).
Analysis of Southwest Airlines using Porter’s Five Forces Model
Competitive rivalry-High. Southwest Airline’s direct competitors comprise of six major low-carriers operating in the domestic market with similar services such as Delta Air Lines, American Airlines, United Continental Holdings, JetBlue Airways, US Airways Groups and Allegiant Travel. This offers a strong competition., considering their operation in the domestic market and provision of similar competitive packages such as low-cost flights (Flouris & Oswald, 2016).
Threat of new entrants-Moderate. New low cost Airline firms could enter the industry and attract customers. As much as entry into the market is minimized by the huge capital investments required for venturing into the industry, there are no barriers to entry (Flouris & Oswald, 2016).
Bargaining power of suppliers-High. Planes suppliers in the industry include Airbus and Boeing. Supply of fuel in the Airline industry is extremely volatile and unpredictable. This makes the bargaining power of suppliers high.
Bargaining power of buyers-High. Most of the competitors or low cost carriers in the industry offers similar services and limited differentiation. Buyers have a high bargaining power due to availability of alternatives with similar benefits. In order to address the high buyers’ bargaining power, the company can decide on less cancelations, lower price, fewer delays and more amenities (Flouris & Oswald, 2016).
Threat of substitutes-Low. Alternative means of transport such as vehicles, ship and train do not significantly compete with air transport owing to their high speed, comfort and time savings.
Strategy used
Michael Porter presented generic strategies that can be employed by a company to overcome the five forces and accomplish competitive advantage. The first strategy presented is the overall cost leadership which is based on creating a low-cost.
Skywest was the largest regional airline in 2009 during an economic downturn that greatly impacted the airline industry. It faced challenges including rising costs, falling profits, and disputes with partners. While Skywest performed most maintenance internally to control costs, expenses increased as it acquired new aircraft and outsourced non-routine maintenance. Its profit margins declined between 2008 and 2009 as operating expenses grew despite higher revenues. The regional airline industry was highly competitive and cyclical, closely tied to the economy.
Three sentences:
JetBlue is a low-cost airline headquartered in New York serving over 100 destinations. The document analyzes JetBlue's industry, business model, financial performance and risks to value the company. A financial model was created assuming revenue and cost growth rates to estimate JetBlue's stock value at $38.56, an upside of 75% from its current price.
This document provides an overview of Southwest Airlines, including its business model, strengths, and competitive advantages. It discusses how Southwest provides low-cost, point-to-point flights across the US using a standardized fleet of Boeing 737 aircraft. It also notes that Southwest has reported 58 consecutive quarters of profitability due to its low-cost structure and high customer satisfaction, unlike many other airlines struggling with debt. A SWOT analysis identifies Southwest's strengths as its market leadership, low-cost model, and strong financial performance, while weaknesses include short-term liquidity and declining revenue yields.
Running head FINANCIAL ANALYSIS AND PROPOSAL COMPONENT 3 .docxcowinhelen
Running head: FINANCIAL ANALYSIS AND PROPOSAL COMPONENT 3 1
FINANCIAL ANALYSIS AND PROPOSAL COMPONENT 3 6
Financial Analysis and Proposal Component 3
Mariea Pack-Elder
Fin-650
Financial Analysis and Proposal Component 3
Hardy & Matson (2004) argue that the management of a company must continually evaluate the financial status of their firm to evaluate whether the firm will be able to meet is future obligations. Managers must always ensure a balance between their firm’s operations, marketing and financial status. A deficit in any of the three departments leads to an imbalance, which is detrimental to the firm. The aim of this article is to analyze and compare the future financial health of the Southwest Airlines and JetBlue Airlines based on the 9-step assessment process.
The assignment will however focus on step 5: External Financing Need, Step 6: Target Sources of Finance and Step 7: Viability of 3-5 Years Plan. Striking a balance is important in ensuring long-term success, which is in line with the firm’s long-term goals, and strategies .Investors and other stakeholders look at the long-term health of an enterprise when making their decisions such as extending credit to the company, long-term supplier arrangements or investing in the enterprise’s equity. Some companies have in the past initiated very ambitious programs only to later discover they cannot finance such programs. The companies had to abandon the programs, which resulted in waste of resources (Hardy & Matson, 2004).
Step 5 -future external financing needs
The need for external financing in a company depends on the company’s future sales growth, future profitability, profit retention, and its cash cycle. Companies with a long cash cycle, low profitability, and low retention are particularly strong candidates for external long term financing (Hardy & Matson, 2004). Southwest Airlines has a strong ability to generate cash flows consistently. This has helped the company reduce its debt significantly over the last few years. In the 2015 financial year, the company generated $3.2 billion cash flow from operations and another $1.1 billion in free cash flows. The company ended the year with $3.1 billion in cash in its financial statement. However, this is set to change as the company plans to embark on a rapid expansion program, which includes expanding its capacity of its US routes, as well as commence international flights. This means the company will have to build a new international terminal, acquire new airplanes, hire more staff, as well as invest in parking spots in its new routes. This also means the company total assets will grow significantly in the next 3-5 years. Though the company might be able to finance its activities out of its operating income, in the near future it may be forced to seek long-term debts to acquire new aircrafts to use in the international routes. Currently, the comp ...
The document discusses trends in the US airline industry and how they impacted JetBlue's strategies. It analyzes JetBlue's strategic objectives, financial performance, competitive advantages through costs, culture and HR practices. In 2008, JetBlue adopted growth and efficiency strategies like opening new terminals and destinations, improving aircrafts, and controlling costs. These strategies helped JetBlue become profitable again after initial losses, demonstrating the success of its strategic response to industry challenges.
Southwest Airlines has consistently been profitable since 1973 while most other airlines have struggled. It focuses on low fares and has maintained this strategy despite rising costs. While Southwest's passenger numbers and market share have increased, its operating profit declined slightly from 2006-2009. To improve profits, Southwest will need to ensure revenue exceeds operating costs while continuing its strategy of slow expansion into new markets.
Performance comparison of southwest airlines with us aviation industryMonk consulting
SW Airlines remained profitable while other airlines struggled after 9/11 and the Iraq War. It achieved the lowest costs per seat mile through strategies like quick aircraft turnarounds, online ticket sales, and no meals. SW had high employee satisfaction and low attrition despite paying higher salaries. It focused on operational efficiency, customer service, and treating employees well. While other airlines tried competing through discounts, SW prioritized financial stability and balanced growth. Its unique strategies and values contributed to its sustained outperformance of the industry.
- The document analyzes Southwest Airlines' fuel hedging strategies to manage the risks associated with volatile jet fuel prices. It discusses Southwest's history of hedging and examines five hedging alternatives available to the company.
- The analysis considers two scenarios - declining or rising future fuel prices - and evaluates the costs and benefits of different hedging options like swaps, options, and futures contracts under each scenario to determine the best strategy.
- The goal is to help Southwest's Director of Corporate Finance choose a hedging approach that limits risks from unpredictable fuel costs while allowing the company to budget and forecast accurately.
Southwest Airlines is the largest domestic airline in the US, serving over 100 destinations. It operates only Boeing 737 aircraft, which allows for low maintenance costs. Southwest has pursued a strategy of cost reduction, completing the integration of AirTran Airlines and growing its frequent flyer program to increase revenue. It generated record profits in 2014 but faces increasing competition in the domestic market. The report recommends Southwest expand internationally and into cargo to access new growth opportunities.
JetBlue Airways Corporation (JBLU) is a value-oriented airline founded in 2000 that operates over 750 daily flights to domestic and international destinations. The report provides an overview of JBLU's business, noting its focus on customer service and avoidance of aggressive unbundling. It also discusses ongoing industry consolidation, JBLU's growth opportunities in smaller markets being vacated by larger carriers, and its young fleet of Airbus and Embraer aircraft. The report maintains a bullish thesis on JBLU's potential to benefit from continued industry shifts toward fewer competitors and higher fares.
Final CFA Challenge Trinity University Team SubmissionEmilio Vernaza
1) The document analyzes Southwest Airlines (ticker: LUV) and recommends it as a buy. LUV has maintained low costs through operating a single aircraft type and point-to-point routes.
2) It has grown to be the largest US carrier by passengers while continuing to demonstrate low costs, though its cost advantage over competitors is decreasing. LUV has had 43 consecutive years of profitability.
3) Recent restrictions lifts and acquisitions like AirTran have expanded LUV's scope of operations and potential for market share growth domestically and internationally. However, international operations remain a small portion of its business currently.
The document summarizes an investment analysis report on Southwest Airlines (LUV) conducted by students for the CFA Institute Research Challenge. The report initiates coverage of LUV with a Hold recommendation based on a target price implying 8% downside. Key points include LUV's past success due to low-cost leadership, conservative operating strategy, but diminishing cost advantages as competitors adopt similar strategies, and labor issues potentially impacting margins.
UT Dallas CFA IRC Report - 2016 LUV [104644]Trevor Deupree
The document summarizes the CFA Institute Research Challenge hosted by CFA Societies in Texas, Louisiana, New Mexico and Oklahoma. The local challenge will take place at the University of Texas at Dallas. Students from participating universities will research and analyze Southwest Airlines and present their investment recommendation and rationale.
The document summarizes the CFA Institute Research Challenge hosted by CFA Societies in Texas, Louisiana, New Mexico and Oklahoma. The local challenge will take place at the University of Texas at Dallas. Students from participating universities will research and analyze Southwest Airlines and present their investment recommendation and rationale.
Southwest Airlines has proven successful through strategic acquisitions and programs. After acquiring AirTran, Southwest expanded into new international routes. Programs like early boarding and two free checked bags increased customer satisfaction without hurting profits. Southwest's strengths include its large fleet and culture, while opportunities remain in emerging international markets. Always considering cost savings, Southwest has managed risks like fuel costs through hedging contracts.
Mercer Capital | Valuation Insight | Capital Structure in 30 MinutesMercer Capital
This document provides a guide for directors and shareholders on capital structure decisions. It discusses evaluating the optimal capital structure by identifying the financing mix that minimizes the weighted average cost of capital. While debt has a lower nominal cost than equity, the relevant consideration is the marginal cost of each, which is impacted by leverage levels. The document outlines measuring a company's current capital structure, comparing it to peers, identifying a target structure, and evaluating sources and uses of funds to move towards the target.
Strategic Management presentation from MBA program, looking at several potential avenues that Southwest Airlines could consider to generative additional revenue. Interestingly, the airline has gone on to implement a few of the ideas we generated.
Similar to Assessing and Managing Risk BUS-485 (20)
This document outlines the steps in the gas process. It starts with atmospheric and vacuum distillation to separate crude oil into different fractions. These fractions then go through various refining units like coking, fluid catalytic cracking, hydrocracking, hydrotreating, isomerization, and reforming. The outputs are blended into final gasoline and distillate products.
Religion is an amalgamation of different world views, cultural beliefs, morals, revelations, and prophesies that often have spiritual backgrounds and meanings to members who subscribe to a given faith.
Differential Application of Utilitarian and Deontological Ethical Theories in...Writers Per Hour
This document contrasts the practical application of Kant's deontological moral theory and Mill's utilitarian moral theory. It analyzes how each theory would approach two rescue scenarios: 1) Rescuing 5 people threatened by tides vs 1 person on the road, and 2) Rescuing 1 person stuck on the road vs 5 people threatened by tides. Kant's theory focuses on strict adherence to duty, while Mill's focuses on maximizing happiness. In the scenarios, their approaches differ, with Mill focusing on consequences and Kant on moral rules. The document concludes that Mill's utilitarian theory is superior for practical ethical decision making in real-world situations.
Due to several causes like religious intolerance, economic contempt, and political scapegoating, Jews in Christian Europe struggled for more than a millennium to uphold their faith and lives.
The news article by CBS News titled "Religious leaders speak out after shooting at Sikh temple leaves 2 hospitalized" was authored by Brady Halbleib. It is about a shooting at a Sikh temple in Sacramento that left two people hospitalized. The news article was written on March 27, 2023.
A government's or other institution's public policy on climate change refers to the measures and rules created to diminish the impacts of climate change. The phrase "climate change" denotes to the overall process by which human actions like burning fossil fuels and deforestation affect the Earth's climatic system over the long term.
The way the Christian Jesus is portrayed in Scientology, from the simple basics to the complex OT VIII portrayal, is very different from how Christians view Jesus.
Lowell, Massachusetts is a multicultural city with diverse ethnic groups including Cambodians, Dominicans, Americans, and Pennacook people who are the original inhabitants. The Cambodian population settled in Lowell after fleeing Cambodia following the Khmer Rouge regime. Though different, both the Pennacook and Cambodian groups rely on the Merrimack River for activities and preserve their cultures through celebrations and religious practices. Both ethnic groups have contributed to the revitalization of Lowell through cultural influences and small businesses.
how one company penaterated into the korean seasoning market back in 90s and ...Writers Per Hour
The document discusses the seasoning market in South Korea and two major companies, CJ Group and Daesang Group. It notes that the Korean war and Japanese dominance initially shaped the market. It is now growing and South Koreans consume more seasoning per capita than global levels. CJ Group was founded in 1953 and spun off Samsung in 1993, focusing on innovation. Daesang Group was founded in 1956 and restructured in 1998-2005 with a focus on innovation and values.
In this course, you will develop an original curriculum design. This curriculum will be a minimum of the equivalent of a single unit of instruction, or one week's worth of work in a typical public school. This would encompass, at a minimum, five one-hour sessions of instruction. Your curriculum design may be longer, if you choose. You may select any topic you wish. Students have created a wide variety of projects in the past, including a course on "How to Use a Telescope to Read the Night Sky" to "Introduction to Dental Hygiene." It is entirely up to you! Three samples are available in Start Here for your review. Your professor will also discuss the variety of potential projects in a Collaborate Session, Course Announcements and Discussion.
This project will take place in two parts. Part One offers an overview of the curriculum itself. In Part Two you will design specific instruction including detailed lesson plans and instructional materials. Each part (one and two) should be formatted as a formal paper, be no more than 10-12 pages in length (not including title and reference pages) and is worth 15% of your grade.
Part One of the Curriculum Design Project includes: The curriculum map, developing an outline of the curriculum, including needs assessment, goals, objectives, scope and sequence, and a plan for evaluation. Additional information about this assignment can be found in Resource areas of your online course including the weekly assignment instructions, announcements, and/or discussion posts by your professor.
PLEASE use the outlined copy of the final project for Part 1 only. Also, please use my other TWO files EUD741 & EDU742 to construct the paper!
1) The document discusses therapeutic change and cognitive behavioral therapy (CBT) as an effective treatment for generalized anxiety disorder (GAD). CBT involves altering thoughts, emotions, and behaviors through talk therapy sessions to improve psychological health.
2) Person-centered therapy is also described as effective for treating GAD and other disorders. It focuses on empathy, genuineness, and positive regard between therapist and patient to strengthen their relationship and treatment outcomes.
3) Research shows psychotherapy has over 80% efficacy in treating GAD, with one study finding CBT eliminated GAD symptoms in 86.4% of participants. Various therapy techniques can effectively initiate therapeutic change and growth for patients.
MaryJoans is a locally-owned, high-quality t-shirt company that supports breast cancer research. It uses market research to understand customers, competitors, and gauge business success. The document discusses qualitative and quantitative research methods, with qualitative involving focus groups and interviews to understand customer motivations, and quantitative using surveys and data analysis to aid expansion and increase sales and retention. Measures of success include customer satisfaction, financial performance, and acquiring new customers.
The Progressive Era lasted from the 1890s to the 1920s and was characterized by political reforms and social activism across the United States aimed at combating corruption and other issues. Key events of the era included increased business regulation to promote fair treatment of workers and consumers, the conservation movement to protect natural resources from exploitation, the rise of professional standards and licensing, and prohibition to address social problems linked to alcohol. Reformers also worked to achieve greater democracy by fighting corruption and intimidation in government.
Topic Legacy of the Progressive Era
Academic level Undergrad. (yrs 3-4)
Discipline History
Document type PowerPoint Presentation
Spacing
DOUBLE
Citation style APA 7
This document discusses critical media literacy and its importance in education. It analyzes a short film about a Mexican immigrant student named Moises who struggles in his math class due to a language barrier. Critical media literacy could help students like Moises interpret texts and better understand course material. The concept provides frameworks to critically analyze power structures and representations in media. It is an important tool that can help immigrant students navigate cultural and linguistic challenges when pursuing education.
In this episode, Simon Schama tells the story of medieval Jews and their struggle to preserve their identity under Islamic and Christian rule. He describes Jews working as bankers, artists, doctors, merchants, and poets in places like Spain, Lincoln, Cairo, Cordoba, and Venice. However, the Jews also faced periods of persecution, including their mass expulsion from Spain in 1492. Schama explores how Jews built new lives in exile and developed new ways of practicing their faith despite facing discrimination. He celebrates how Jewish thinking and achievements helped transform the world.
This article discusses the concept of eugenics and how it has evolved in western psychology. It begins by defining eugenics as improving human qualities through selective breeding. The article then explores how eugenics was influenced by Darwin's theory of evolution and was used in the past and present as a social engineering tool. While eugenics contributed to increasing human intelligence over generations, it also led to prejudice and harmful stereotyping against groups deemed less desirable. The article ultimately examines both the strengths and disadvantages of how eugenics has changed over time in the field of psychology.
In order to give us background on the influence of psychoanalysis not just within psychology but within culture generally (including the fascination with dreams and symbolism that we see in much of mid-20th century Western art and film) I’ve uploaded an article on the two warring giants, Freud and Jung. Note three new pieces of information you learned. Why do you think there was, and still is, so much fascination with the unconscious and so much disagreement about how its functions are described
2. The attack on psychoanalysis in the Third Reich led to the flight, exile, or imprisonment and sometimes death of influential researchers and theorists, particularly Jewish ones. In an earlier board you considered the role of government in psychology, but we have seldom seen such sweeping and violent intervention into science from governmental authority. Note any three aspects of the political standing of psychology and psychiatry that struck you in your reading of the uploaded article. What do you think are contexts or characteristics that led some non-Jewish figures to protest and some to acquiesce in the suppression and condemnation of the work of their Jewish colleagues
Please answer both questions and all parts of the question.
বাংলাদেশের অর্থনৈতিক সমীক্ষা ২০২৪ [Bangladesh Economic Review 2024 Bangla.pdf] কম্পিউটার , ট্যাব ও স্মার্ট ফোন ভার্সন সহ সম্পূর্ণ বাংলা ই-বুক বা pdf বই " সুচিপত্র ...বুকমার্ক মেনু 🔖 ও হাইপার লিংক মেনু 📝👆 যুক্ত ..
আমাদের সবার জন্য খুব খুব গুরুত্বপূর্ণ একটি বই ..বিসিএস, ব্যাংক, ইউনিভার্সিটি ভর্তি ও যে কোন প্রতিযোগিতা মূলক পরীক্ষার জন্য এর খুব ইম্পরট্যান্ট একটি বিষয় ...তাছাড়া বাংলাদেশের সাম্প্রতিক যে কোন ডাটা বা তথ্য এই বইতে পাবেন ...
তাই একজন নাগরিক হিসাবে এই তথ্য গুলো আপনার জানা প্রয়োজন ...।
বিসিএস ও ব্যাংক এর লিখিত পরীক্ষা ...+এছাড়া মাধ্যমিক ও উচ্চমাধ্যমিকের স্টুডেন্টদের জন্য অনেক কাজে আসবে ...
How to Manage Your Lost Opportunities in Odoo 17 CRMCeline George
Odoo 17 CRM allows us to track why we lose sales opportunities with "Lost Reasons." This helps analyze our sales process and identify areas for improvement. Here's how to configure lost reasons in Odoo 17 CRM
This presentation includes basic of PCOS their pathology and treatment and also Ayurveda correlation of PCOS and Ayurvedic line of treatment mentioned in classics.
Reimagining Your Library Space: How to Increase the Vibes in Your Library No ...Diana Rendina
Librarians are leading the way in creating future-ready citizens – now we need to update our spaces to match. In this session, attendees will get inspiration for transforming their library spaces. You’ll learn how to survey students and patrons, create a focus group, and use design thinking to brainstorm ideas for your space. We’ll discuss budget friendly ways to change your space as well as how to find funding. No matter where you’re at, you’ll find ideas for reimagining your space in this session.
it describes the bony anatomy including the femoral head , acetabulum, labrum . also discusses the capsule , ligaments . muscle that act on the hip joint and the range of motion are outlined. factors affecting hip joint stability and weight transmission through the joint are summarized.
How to Make a Field Mandatory in Odoo 17Celine George
In Odoo, making a field required can be done through both Python code and XML views. When you set the required attribute to True in Python code, it makes the field required across all views where it's used. Conversely, when you set the required attribute in XML views, it makes the field required only in the context of that particular view.
Leveraging Generative AI to Drive Nonprofit InnovationTechSoup
In this webinar, participants learned how to utilize Generative AI to streamline operations and elevate member engagement. Amazon Web Service experts provided a customer specific use cases and dived into low/no-code tools that are quick and easy to deploy through Amazon Web Service (AWS.)
Chapter wise All Notes of First year Basic Civil Engineering.pptxDenish Jangid
Chapter wise All Notes of First year Basic Civil Engineering
Syllabus
Chapter-1
Introduction to objective, scope and outcome the subject
Chapter 2
Introduction: Scope and Specialization of Civil Engineering, Role of civil Engineer in Society, Impact of infrastructural development on economy of country.
Chapter 3
Surveying: Object Principles & Types of Surveying; Site Plans, Plans & Maps; Scales & Unit of different Measurements.
Linear Measurements: Instruments used. Linear Measurement by Tape, Ranging out Survey Lines and overcoming Obstructions; Measurements on sloping ground; Tape corrections, conventional symbols. Angular Measurements: Instruments used; Introduction to Compass Surveying, Bearings and Longitude & Latitude of a Line, Introduction to total station.
Levelling: Instrument used Object of levelling, Methods of levelling in brief, and Contour maps.
Chapter 4
Buildings: Selection of site for Buildings, Layout of Building Plan, Types of buildings, Plinth area, carpet area, floor space index, Introduction to building byelaws, concept of sun light & ventilation. Components of Buildings & their functions, Basic concept of R.C.C., Introduction to types of foundation
Chapter 5
Transportation: Introduction to Transportation Engineering; Traffic and Road Safety: Types and Characteristics of Various Modes of Transportation; Various Road Traffic Signs, Causes of Accidents and Road Safety Measures.
Chapter 6
Environmental Engineering: Environmental Pollution, Environmental Acts and Regulations, Functional Concepts of Ecology, Basics of Species, Biodiversity, Ecosystem, Hydrological Cycle; Chemical Cycles: Carbon, Nitrogen & Phosphorus; Energy Flow in Ecosystems.
Water Pollution: Water Quality standards, Introduction to Treatment & Disposal of Waste Water. Reuse and Saving of Water, Rain Water Harvesting. Solid Waste Management: Classification of Solid Waste, Collection, Transportation and Disposal of Solid. Recycling of Solid Waste: Energy Recovery, Sanitary Landfill, On-Site Sanitation. Air & Noise Pollution: Primary and Secondary air pollutants, Harmful effects of Air Pollution, Control of Air Pollution. . Noise Pollution Harmful Effects of noise pollution, control of noise pollution, Global warming & Climate Change, Ozone depletion, Greenhouse effect
Text Books:
1. Palancharmy, Basic Civil Engineering, McGraw Hill publishers.
2. Satheesh Gopi, Basic Civil Engineering, Pearson Publishers.
3. Ketki Rangwala Dalal, Essentials of Civil Engineering, Charotar Publishing House.
4. BCP, Surveying volume 1
1. Running head: SOUTHWEST AIRLINES 1
Southwest Airlines Value-Enhancement
Students Name
University Affiliation
2. SOUTHWEST AIRLINES 2
Executive Summary
Southwest Airlines is a low-cost airline that operates within the United States. It was founded in
1967. The airline is renowned as the largest domestic operator since it transports an average of
106 million passengers annually. As well, the carrier operates in the small freight division. In
2011, the airline acquired AirTran airlines this way, maintaining a 39th subsequent profitable
year. A model used to justify Southwest's profitability index displays from a point-point route
that the airline operates efficiently such that in 2012, the airline made an annual revenue of $15
billion. While the airline continues to transform through acquisitions, the management must
embrace a low-cost structure as it has previously propelled their ventures. The Southwest route
continues to expand with new and enormous destinations; this necessitates that the company
focuses not only on customer service deliverables but also on other metrics that may deteriorate.
From the highlighted transformations as a result of various market forces concerning
competition, it is not feasible for the company to rely on its low-cost strategy to leverage its
competitiveness. This report highlights strategies such as market penetration and development as
well as product development. The rationale for this focus is that through these adoptions, the
airline may maintain its long-term profitability metrics.
3. SOUTHWEST AIRLINES 3
Critical Analysis of the Current Strategy
A low-cost strategy leveraged Southwest Airlines at large in the previous decade. This
strategy is highly attributed to raising the airline standards towards attaining a competitive edge
within the domestic markets. Thompson (2007) notes that "an organization must be the cost
leader and unchallenged in this position to implement the low-cost leadership strategy" (201).
Thusly, the strategy objectifies at maintaining a low-cost structure wherefore, the airline charges
low-fares to its clients. Today, the airline ranks amongst other operators in the US with low unit
costs.
What's more, utilization of Boeing 737 aircraft models contributes to Southwest Airlines'
low-cost structure as this model is regarded as being very effective as per the point-point route
structure. The airline constitutes a commendable workforce that is highly productive, and
because the carrier embraces utilization of simplified aircraft, their operational costs concerning
training, flight maintenance, and operations are minimized. As well, the airports through which
the airline operates are optimally located and hardly congested; this way, asset utilization is
increased to leverage efficiency.
Southwest Airlines is considered as a production-oriented firm because of its low-cost
structure. According to Thompson, such firms are concerned with minimizing production costs
through massive production to achieve maximum profits (202). To reiterate, Southwest Airlines
operates a large fleet of aircraft; however, despite implementing this strategy, the courier no
longer fits the term 'low-cost carrier.' Smith (2011) notes that low pricing strategies alone may
not amount to sustainable advantage (par, 1) despite the airline-luring clients with its low-cost
4. SOUTHWEST AIRLINES 4
structure. This strategy bases upon the identification of a particular group of customers, placing
them in a specific criterion as per their consumption needs that are always below average. The
Southwest airline targets domestic tourists who, in most cases, mind the airfares, and the courier
offers incentives at a lower rate compared to their competitors. Undoubtedly, a firm utilizing this
model needs to integrate their superior leadership to benefit from it, as Thompson (2007) states
"one of the ways through which this aim is attained is by eliminating aspects that customers may
regard unimportant while offering products."
Financial Consideration
Southwest Airlines is dedicated to providing the highest quality customer service with
warmth, company spirit, individual pride, and friendliness (Kelly, 2020). Through financial
ratios, one may estimate the financial condition and efficiency of a company, liquidity ratios are
commonly utilized based on existent assets and current liabilities ratios, and they indicate an
organizations’ ability to settle their short-term bills. One may determine whether measurement
results are positive or negative. More than one ratio is a prerequisite because anything less than
one means that the company has more liabilities than the resources. Southwest's current ratio
shows they barely met their current financial abilities. They are under the range that it should be
in as they should be between 1.5 and 3. However, Southwest's liquidity balance is better than its
rival, Alaska. Alaska's current ratio is .06x (Staff, 2020). What that entails is that Southwest is
more stable than Alaska in covering its current liabilities using cash and cash equivalents.
Southwest Airlines needs to reflect on its performance ratios. To boost the ratio, training in
5. SOUTHWEST AIRLINES 5
management skills is recommended. The company is stable in liquidity position. Liquidity ratios
may provide investment opportunities in other sectors.
Risk of Forming a Strategic Alliance
A strategic alliance is a two-company agreement to pursue a mutually beneficial project
while each remains independent (Kenton 2020). A business may enter a strategic partnership to
grow into a new market, boost its product line, or obtain an advantage over a competitor. The
agreement enables two organizations to collaborate towards a common purpose, which would
profit both. A strategic alliance can carry its own risk. Although the contract is usually
transparent for both parties, there may be differences in which the companies conduct business.
Gaps can cause conflict. In the long-run strategic alliance, one party may become dependent on
the other. Disruption of the coalition can endanger the health of the company (Kenton, 2020).
Previous research shows the stock market expects cooperative action results. A value-weighted
portfolio approach is used here to demonstrate that the overall market impact of alliance
disclosures is limited, reflecting the fact that the substantial returns tend to be concentrated in the
smaller partner (Burton, 2006). The performance ratios are a measure that most certainly would
disclose immediate details for assessing the efficacy of the partnership. Efficiency ratios v
measure how efficiently a company uses its assets and liabilities to produce revenue and increase
profits. Key productivity ratios include in-inventory asset turnover, stock turnover, and day sales.
Value-enhancement
For Southwest Airlines to acquire the capital necessary to support an aggressive value
enhancement strategy is if there were not much capital currently, then there would be an increase
6. SOUTHWEST AIRLINES 6
in the debt capital and by issuing new debt. From there, that capital would originate from
primarily two sources: equity (common stock or preference shares) or debt. For investment,
Southwest Airlines will receive a dividend, which is optional, but shareholding will be reduced.
Now for the mortgage, they will compulsory have to pay interest in the final payment of
principal, and their assets may be pledged. Realistic interest rates the firm might incur as per the
current market scenario, if Southwest Airlines debt is not much and they have sufficient assets,
and then they will get a mortgage, but not at a much higher cost. Now, if borrowed, what would
be impacted towards this is the debt to equity, total debt/capital, and interest coverage ratio.
Fuel Consumption Metrics
While the global airline industry has significantly developed over the recent past, a
significant issue of increasing concern is the cost of jet fuel, what Wensveen (2012) regards as a
"significant determinant in airfares" (p. 320). This costing continually varies as a result of
external factors. Wensveen attests that the consumption of fuel "varies considerably from route to
route depending on the stage lengths, aircraft weight, and wind conditions" (p. 320). In 2014,
Southwest Airline fuel consumption hit $3.16 per gallon; this is an increasing margin of $1.80
per gallon since 2007. Such expenditures have the propensity of affecting up to 35% of the
company's total spending, an increase from 29% in 2014 (Bachmana, 2014, par 3). At that point,
the firm is no more enjoying the attributes of a low-cost strategy besides being in constant rivalry
with other airlines such as Delta, American, and JetBlue. In addition, the elusive nature of the
profitable industry is influencing the organization today because of increasing operational costs.
This contradicts the firm's 25% previous total market share. Various exogenous factors influence
7. SOUTHWEST AIRLINES 7
Southwest Airline in terms of maximizing its profits, besides the aforementioned factors,
consumer expectations are on the rise, and this is a significant element. Consumer dissatisfaction
is an issue of increasing concern for all airline carriers. Percy (2018) argues that a production-
oriented company needs to focus on production inefficiencies that may affect the quality of the
final product (p. 233).
Decision Matrix
Criteria
Problem
Cost of
Operation
5
Effects on
other
systems
2
Speed to
Solve
1
Ease to Solve
2
Low-Cost
Strategy
3 X 5 = 15 2 X 2 = 4 3 X 1= 3 3 X 2 = 6 28
Customer
Satisfaction
2 X 5 = 10 2 X 2 =4 2 X 1 = 2 1 X 2= 2 18
Increasing
Competition
2 X 5 = 10 1 X 2 = 2 2 X 1 = 2 1 X 2 = 2 16
Quality of
Product
1 X 5 = 5 2 X 2 = 4 2 X 1= 2 1 X 2 =2 13
8. SOUTHWEST AIRLINES 8
Recommended Alternatives and Risks Involved
Despite the difficulties that the firm faces because of progress in industry patterns, for
example, high fuel cost, change in client desires, and a decrease in the degree of benefit,
Southwest Airlines has a chance to accomplish market leadership. The firm can achieve this
objective by altering its vital methodologies. Hill and Jones (2014) opine that an organization
should use its particular qualities to capture market share of the overall industry in an industry
described by declining execution (p. 220).
Product Development
Kumar (2016) characterizes a product to incorporate the guarantee that an organization
makes to the objective market in return for their cash (p. 10). The guarantee includes various
perspectives, for example, passionate hints, qualities, and status requests, among different
advantages. Kumar states that a product-oriented organization accepts that a prevalent product
pulls in an extensively considerable number of clients, henceforth improving the probability of
boosting benefits (p. 10). Therefore, to enhance its intensity, the organization ought to consider
enhancing the nature of the product that it offers its clients, viz. air transport. This move will
assume an essential job in guaranteeing that clients build up a stable relationship with the firm.
Presently, most clients are attracted to Southwest Airlines due to their low pricing.
Nevertheless, changes in industry elements, for example, increment in the cost of fuel, are
difficulties for the organization to support its low pricing methodology. This circumstance is very
much delineated by the organization's choice to alter its costs. Despite the adequacy of the
9. SOUTHWEST AIRLINES 9
product advancement technique for improving the organization's intensity, the methodology is
not liberated from difficulties. One of the remarkable challenges involves an expansion in the
cost structure. This viewpoint implies that the method may bring about the organization taking
part in awful value wars (Hill and Jones, 2014, p. 214).
Market Development
The second key elective that Southwest Airlines ought to consider involves positioning
itself as a market-oriented element. Hill and Jones (2014) insist that a market-situated factor is
mainly worried about creating and using market knowledge (p. 212). This affirmation implies
that Southwest Airlines will be worried about understanding the clients' needs. One of the
favorable circumstances that Southwest Airlines can pick up by receiving the market-oriented
methodology involves an improvement in the probability of the firm changing itself into a client-
centric entity.
This affirmation emerges from the view that the firm influences available insight
assembled from the statistical surveying that the firm attempts. Furthermore, the market
orientation strategy will empower the airline to build up a robust business culture that
acknowledges the clients' conduct, subsequently improving its probability to convey better an
incentive than its objective clients.
Market Penetration
Considering the immersed idea of the carrier business in the US, Southwest Airlines
ought to think about coordinating the concept of market infiltration. On the off chance that the
organization neglects to enter new markets and just centers its activity in the residential market,
10. SOUTHWEST AIRLINES 10
Southwest Airlines will not expand its productivity because of the exceptional rivalry. Under this
methodology, the airline ought to consider extending its arrangement of air transportation
administrations into new markets. One of the courses through which the carrier can actualize the
market infiltration technique involves internationalization. In its internationalization technique,
the aircraft ought to stay away from business sectors that are nearing maturity level. Despite
what might be expected, the firm ought to distinguish airline markets that are portrayed by a high
pace of development. Hill and Jones (2014), confirm that market infiltration depends on putting
resources into broad marketing correspondence to guarantee that the item being brought into the
new market is successfully separated (p. 213).
Regardless of the advantages related to highlight infiltration, execution of the system is
time-intensive (Geppert, 2008, p. 35). This viewpoint implies that Southwest Airlines will devour
a generous measure of time in making its air transport administrations known in the new market.
Besides, the firm faces the danger of item impersonation in the new market. This perspective
may happen if the rivals in the new market entered begins offering air travel services similar to
the firm.
11. SOUTHWEST AIRLINES 11
References
Bachman, J. (2014). Bloomberg - Are you a robot?. Retrieved 13 April 2020, from https://
www.bloomberg.com/news/articles/2014-09-11/southwest-airlines-no-longer-the-low-
cost-leader
Basu, C. (2019, March 6). Four Basic Types of Financial Ratios Used to Measure a Company's
Performance. Retrieved from https://smallbusiness.chron.com/four-basic-types-financial-
ratios-used-measure-companys-performance-25299.html
Beardwell, J., & Thompson, A. (2017). Human resource management. Pearson Higher Ed.
Burton, B. (2006, December 11). The market impact of corporate alliance announcements: value-
weighted versus equally weighted portfolio returns. Retrieved from https://www-
tandfonline-com.lopes.idm.oclc.org/doi/full/10.1080/17446540600972443
Geppert, N. (2008). Success factors for market penetration in CIS countries: Using the
investment business model. diplom. de.
Hill, C. W., Jones, G. R., & Schilling, M. A. (2014). Strategic management: theory: an
integrated approach. Cengage Learning.
Kelly, G. (2020). About Southwest - Southwest Airlines. Retrieved 13 April 2020, from https://
www.southwest.com/html/about-southwest/index.html
Kenton, W. (2020, January 29). The Risks and Rewards of a Strategic Alliance. Retrieved from
https://www.investopedia.com/terms/s/strategicalliance.asp
Kumar, D. (2016). Enterprise growth strategy: vision, planning and execution. CRC Press.
12. SOUTHWEST AIRLINES 12
Percy, L. (2018). Strategic integrated marketing communications. Routledge.
Southwest Airlines Co. (2020, January 23). Southwest Airlines Reports 47th Consecutive Year
Of Profitability. Retrieved from https://www.prnewswire.com/news-releases/southwest-
airlines-reports-47th-consecutive-year-of-profitability-300991895.html
Staff, M. B. (2020, April 5). LUV Dividend Yield, History & Payout Ratio (Southwest Airlines).
Retrieved from https://www.marketbeat.com/stocks/NYSE/LUV/dividend/
The Complete Toolbox for Investors, finbox.com/NYSE:LUV/explorer/ni_margin.
Wensveen, J. (2016). Air transportation: A management perspective. Routledge.