Price Discrimination in Southwest Airlines

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Southwest Airlines

One could not think of Air travel in the United States without thinking of the Southwest Airlines Airlines. Southwest Airlines Airlines is a low-cost airline that has been operational in the United States since the year 1971. It was founded by Rollin King and Herb Kelleher, and it was meant to operate in Dallas, San Antonio, and Houston. Over time, the airline has invested a lot in customer satisfaction and continuously offering discounts to frequent customers. For instance, in the 1980s, the Southwest Airlines started the Frequent Mile Program that allowed customers to bank their travel miles and redeem them later for a free flight or a reduced airfare (Yan, and Clifford 150). In addition to this, the Southwest Airlines has been the king of discounts in the airline industry. They have made it the airline’s culture to offer discounts to customers from time to time thus building a strong customer base.

Southwest Airlines faced a lot of competition during the early years from the already established airlines such as the Braniff and the continental airlines. But it managed to survive after the United States Supreme court upheld the decision that the airline had all the rights to operate in the three cities it was first incorporated to serve. Since then, the Southwest Airlines airline has been the choice of Americans for its low-cost flights and reduced complexity. Owing to the lengthy legal battles that the airline faced, it was not able to begin commercial flights until 1971 when it made its first flight from downtown Dallas. This marked the start of the expansion of the airline to other cities. The airline started new routes in 1975 to cities throughout Texas and thus expanding to brand new markets (Choo, and Tae 63). This was due to the federal deregulation of the airline industry in 1978 a factor that gave the Southwest Airlines the opportunity to stretch its tentacles to the nearby States. In the 1990s, the airline expanded to other states like California and other states in America. The 21st century has seen the airline face stiff financial difficulties. This made the Southwest Airlines to take on a new structure that will enable it to survive in the struggling airline industry. This is the time when they appointed a new president and also started other initiatives that were meant to reduce operational costs. The Southwest Airlines introduced the online booking handle and the self-service check-in kiosks (Alamdari and Simon 75). This helped the Southwest Airlines to reduce the number of its employees and thus remaining profitable regardless of the continuously increasing costs.

The Southwest Airlines have over time been using different slogans to advance its marketing and advertising strategies. It has always been different in its slogans thus attracting more and more customers to use the airline. But most importantly, the airlines center its operations and marketing strategies on love. This is evident through its different slogans that always feature some aspect of love. One such example is the “love is Still Our Field.” In addition to that, the airline has in the recent past been using its low-cost flight to advance its marketing and advertising strategies. For instance, its current slogan is “Low fares. Nothing to Hide”. These slogans contribute to the strong customer base that the airline has established since it started flying in the skies. To promote its corporate identity, the Southwest Airlines is dedicated to the honor flight network that is meant to take the aging veterans to visit monuments in the country. This is in honor of the service they provided to the country during their young life (Alamdari and Simon 75). The Southwest Airlines headquarters is located in the Dallas love field from which it took its first commercial flight. The airline has more than 57, 000 employees and thus contributes a great deal to the United States income. All these workers are represented by member unions thus ensuring that they are well served by the company and also cared for.

During the incorporation of the Southwest Airlines’, the dream was to serve the three major cities of the Texas triangle. But this has changed over time as the airline can now fly to most parts of the United States. As of August 2018, the Southwest Airlines has reached ninety-nine destinations across forty states. In addition to that, the airline flies to other states like Puerto Rico, Mexico, the Caribbean and Central America. Over time, Southwest Airlines has been able to start operations in different airports in and outside the United States. For instance other than the Dallas Love Field, it operates in other airports like the Chicago Midway, Houston Hobby, Orlando, Phoenix among others. The most served destinations include Chicago-midway which serves 261 departures a day, Las Vegas that serves 218 flights a day and the Baltimore Washington that serves 243 departures a day. In April 2018, the airline started operating brand new routes thus giving her customers more travel options. These new routes include flights from San Francisco to Austin, Sacramento to St. Louis, San Jose to New Orleans, San Diego to Newark among others. For the international travelers, the Southwest Airlines also started new international services in April. These flights include weekly flights from New Orleans and Columbus to Mexico (David 70). In its bid to keep travel costs as low as possible, the Southwest Airlines uses secondary airports instead of the major airports used by other major airlines. This is because secondary airports are more convenient for customers as there is reduced congestion and thus easy boarding as compared to major airports that suffer the problem of congestion and complicated procedures. Among the airports used by Southwest Airlines is the Midway international airport, the Dallas love, William P. airport among others.

Southwest Airlines is not currently partnering with any airline. But this was not the case as it has tried to partner with other airlines in the past. For instance, in the year 1997, Southwest Airlines partnered with the Icelander. This involved mostly marketing agreements that allowed the two airline companies to merge their flight schedules and fares. The partnership also allowed for the transfer of luggage between the two airlines in Baltimore. The partnership lasted several years until it ended in 2007. Another significant partnership that occurred in the past is one with the ATA airlines. This was when Southwest Airlines was changing from its traditional strategy thus going into partnership with ATA. This gave Southwest Airlines the ability to serve the markets held by ATA in Hawaii, New York City, and Washington DC. This partnership ended when ATA filed for bankruptcy in 2008. This allowed Southwest Airlines to acquire the operating certificate and some landing certificates of her partner. WestJet also entered into a partnership with Southwest Airlines in 2008. This gave both the Southwest Airlines and the west jet the opportunity to sell seats in each other’s flights. The partnership was terminated in 2010 after the two airlines agreed to terminate the agreement (Choo, and Tae 63). Finally, Southwest Airlines partnered with AirTran Airways in 2011. The contract ended in 2014 when Southwest Airlines integrated AirTran fully.