Swot Analysis Southwest Airlines

SWOT Analysis of Southwest Airlines

Kayamisha Esteves

Upper Iowa University

Brief History of SouthWest Airlines

Herb Kelleher and Rollin King founded the Southwest Airlines, which sometimes began in 1971, serving San Antonio, Houston, and Dallas. Initially, Southwest Airlines was incorporated to serve three cities in Texas on March 15, 1967. Notably, it was the first airline during the mid-1980’s to offer special services, ‘frequent miles’ program’. Ideally, this service enabled passengers to bank traveled air miles. Additionally, Southwest Airlines were the first to introduce the fun packs, fun fares, and senior discounts. In 1984, Southwest Airlines was ranked first in customer service for four consecutive years (Boguslaski, 2004, p. 11).

        Initially, Southwest Airlines Co was called Air Southwest Co. Southwest Airlines, inaugurated service between Houston and San Antonio. Towards the end of 1971, Southwest Airlines offered hourly flights between Houston and Dallas and owned four aircraft thereby completing the last stage of a triangular route. Ideally, was a bold move because the airline had to get more from less. They made a calculated move and purchased similar models of planes hence saving a lot of cash, particularly for maintenance. The founder, Herb Kelleher used most of the company’s ideas to integrate the corporate culture at Southwest (Smith, 2004). In 1985, Muse was on the verge of collapsing, but Southwest Airlines intervened by paying sixty million dollars in cash and stock.

        In 1990, Southwest Airlines moved into their present headquarters that was built in 1990 at a cost of fifteen dollars. However, the airline announced the acquisition sometime in 2010 where it received absolute approvals in 2011 from the United States Department of Justice (Heskett, 2015). The airline has tremendously grown to a reputable airline in the US.

Global Position of Southwest Airlines

Southwest airline is a major United States airline and the biggest carrier with low costs that is headquartered in Dallas, Texas. Southwest was established in 1967 and acquired the name in 1971. The company has almost 46000 employees as of December 2014 and operated at least 3400 flights in a day.

Southwest airline received its annual award winning integrated report to highlights how it’s moved to achieve its vision to becoming the world’s most moved, most flown and profitable airline. The 2013 southwest airlines report uses a triple bottom line approach that considers the carrier’s performance and productivity, it is commitment and efficiency, and the importance of its people and the communities it serves. Southwest already operates international reservation systems. The airline achieved record revenues of $17.7 billion in 2013. The company has met its global goals to improve its cost performance.

The airline has used Boeing 737, except for some years in the 1970s and 1980s. As of August 2012, the airline has been the largest operator of the 737 worldwide with more than 650 in service with each having an average of six flights in a day.  The company operates in many countries over the world. The company is planning to expand its operations in as many countries over the world. This will enhance maximization of revenues in the branches over the countries. The airline is determined to become the best and beat its competitors over the world. Currently, the airline is using online operations which enhance convenient booking of flights from customers in different parts of the world. In the next decade, the airline is focused on making maximum profits and operate in every country over the world (Pettus, 2003).

Southwest Airlines are one of the airlines in the US that have gained a substantial market share in the vast US market. Being a middle-aged airline, the Southwest airline has gained a reputation as one of the best airlines. Despite its huge customer base and good reputation, the airline also has some challenges. This paper lays an explicit focus on the SWOT analysis of the airline.

Strengths

The Southwest airline enjoys an enormous financial base. The airline has been reporting profits and due to its consistent growing profits and a strong balance sheet, the company has been able to gain financial standing that can enable it to make massive investments. It is due to its massive financial strength that the airline was able to acquire the position of the sole US airline to attain the investment grade until 2014 (Centre For Aviation, 2014).

Another strength of the airline is that it has a very popular brand. Southwest is one of the most popular brands in the US. Its brand consistently features in most of the special events as well as in the social media. The airline is the top travel the brand in the US (Liu, 2012).  The

strong brand provides an excellent differentiation between the services of the company and other competitors (Centre For Aviation, 2014). Another key strength of the airline is that it has continuously maintained a robust domestic market share and it is continually reporting a growth in the passenger number.

Weaknesses

One of the major weaknesses of the airline is that it does not offer international flights. Failure to offer international flights reduces the revenue resources of the company. Additionally, the company does not offer a lot of cargo flights, and this also places it at a lower edge when compared to its competitors who continuously engage in cargo and passenger flights (Strengths of Southwest Airlines Swot Analysis, 2015).

Southwest also have planes that do not offer enough space for the passengers and the cargo. The small planes place the company at a disadvantage since the company does not earn enough revenue as it could be earning if it had planes with larger space (Liu, 2012).