Southwest Airlines Report
SOUTHWEST AIRLINES 2008
In 2008, southwest Airlines, the one scrappy underdog in the U.S Airline industry, carried more domestic passengers than any other U.S airline. The company, unlike all of its major competitors, had been consistently profitable for decades and had weathered recessions, energy crises, and teh September 11 terrorist attacks. In the first quarter of 2008, the company was profitable and experienced record first quarter revenue and a record passenger load factor. However, the earnings release made it clear that the “threat of volatile and unprecedented jet fuel prices” was a major issue that threatened future growth. Operating expenses were rising, and Southwest announced that it would cut 2009 growth in available seats to less than 3%. Over the previous decade, growth had been about 5-10% a year. This cut in planned growth was consistent with previous responses to difficult environments. An insight into Southwests operating philosophy can be found in the companys 2001 Annual report
Discussion Questions
1. Brief the dynamics of US airlines industry? Is it attractive?
2. What is southwest’s strategy? How southwest manages to stay afloat? What has contributed to the success of SWA?
3. How south west airlines operations support its strategy? Explain the need for a fit between strategy and operations?
4 Can this strategy be imitated by competitors?
5 Is this strategy sustainable? Under what circumstances, SWA strategy can be thwarted? How can SWA brace for the future? Chart out a plan with your rationale
6 Do a SWOT analysis for SWA?
7 What lessons Indian LCC can learn from SWA? Would the model of SWA be