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.

3. ‘Our People Are Our Single Greatest Strength And Most
Enduring Long-Term Competitive Advantage.’
Gary Kelly, CEO Southwest Airlines

4. Started in 1971 with little money but lots of personality.

5. Featured a bright RED HEART as its first logo.

6. Advertising showcased its focus on Low-Fares, Frequent
flights, On-time arrivals,Top safety record and how Bags
fly free.

7. Used humour to poke itself to convey its warm personality.

8. Personalized aircrafts such as a Flying Killer Whale,The
Texas flag and the Slam Dunk One.

9. United States’ MOST admired airline!
Profitable for 37 years straight!
One of Top 5 places to work!

10. BUSINESS MODEL

11. Southwest Airline streamlines operations which results in low fare and
customer satisfaction.The airline takes several steps to save money and
passes the savings to the customers through low fares!

12. Flies over 3100 short “point-to-point” trips daily.

13. Each flight makes an average of 6.25 flights daily.

14. Purchases fuel in advance to hedge fuel prices.

15. with fuel hedging!!!
Southwest saved more than
$2 Billion

16. Extremely fast turnaround service.

17. Follows a unique boarding system.

18. Enters new markets other airlines overprice.

19. Operates Boeing 737s for all its flights.

20. Makes sure that the planes are light with lighter models of
seats and power washing the engine to remove the dirt.

21. in fuel cost over just 3 months!!!
Southwest saved more than
$1.6 Billion

22. Advertisement by Southwest

23. Has pioneered services and programs such as
same day freight service

24. Senior Discounts

25. Fun Fares &TicketlessTravel

26. • Southwest was the first airline with a web site.
• Ranks on top for customer service.
• Receives the lowest ratio of complaints per
passenger.

32. Southwest consistently earned profits despite
the various industrial problems.

33. With such stability, It makes decisions and
adjusts policies which other burdened airlines
may not be able to make.

34. • Other airline companies pride themselves more
on service.
• Their ticket prices are not cheap.
• They generate huge revenues from the elite
people.

36. Firstly, Southwest Airlines has to run their
flights even if only half of the seats are full.
In that case the airlines have a risk of earning really
low revenue!

37. Secondly, South West Airlines is at constant
price wars with its competitors.
Sometimes SouthWest is forced to keep the prices
of tickets really low!

38. “Our fares can be matched; our airplanes and
routes can be copied. But we pride on customer
service.”
-Sherry Phelps, Director of Corporate Employment

39. Let’s RECAP

40. Business Model Unique Model
Steps to Reduce Fares Future Prospects
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41. DISCLAIMER
Created by Atulya Manuraj, IIT Kanpur during an
internship by Professor Sameer Mathur, IIM Lucknow.