Southwest Airlines

This is the historic background of an American Airline company called the Southwest Airlines Co. based in Dallas which still exists and operates with great success between 57 cities in 26 states of the US, by over 300 airplanes , providing primarily short-haul, high frequency, point to point, low fare service . Through this essay we will see an analysis of the company's advantages and disadvantages through a SWOT Analysis. We will try to localize the problems of the company at the time and in the case of a future expansion, and we will try to give a number of alternative solutions and chose one of them. The Southwest Airlines is a company that has done its first movements in the airline world in 1971 after many efforts for its opening through legal battles with competitors that did not believe that there was any particular reason why the another airline company should exist among all the others already existing. The different things that the new airline company provided were many and very interesting. The idea started from two friends Rolling King, and investment advisor, and Herb Kelleher, his lawyer, who met in order to discuss the idea of Rolling King for a low-fare, no- frills airline to fly between three major cities in Texas. The outcome of this discussion was in reality the decision of the two men to go for something that they believed would work, even though they were not positive about that. After all the legal battles between the two men and the airline companies of Texas at the time who believed it was not necessary for another airline company to enter the market, battles that prevented the operation of the company for three whole years, Southwest Airlines Co. had become a reality. Other legal battles followed in the future that justified the Southwest Airlines but left the company broke, while during the first year of its operations made losses and the earnings for the next half a year were balancing with costs. Gladly the recovery came soon and by 1978 Southwest Airlines was one of the most profitable in the country. Later on, Southwest Airlines Co. managed to provide airline transportation in eight more cities in Texas and dominated the Texas market, with low prices and frequent departures. Today the Southwest Airlines Co. is a very big domestic airline company, the fourth in the US. We will now have a small analysis of the company's environmental situation and then we will try to have an Analysis in order to underline any kind of problems that the company may have and see all the alternative solutions that may occur. Our final movement will be the choice of one of the alternative solutions for the benefit of the company in the future.

The Internal Environment of the Southwest Airlines Co. consists of all the people that work in the company. The most important ones are the establishers of the company, Rollin King, the investment advisor and Herb Kelleher who later became the manager of the company. The internal environment of the Southwest Airlines Co. also consists of other dramatically important, as it seems, people, who are the employees. The importance of those people can be noted by several ways. From the fact that all the people working for the company have never been dismissed, from the fact that they operate and work like a family, for instance pilots do the work of flight attendants in order to help them when emergency arises, which is not considered as an unusual phenomenon. Also from the fact that for 24 years only 3 people have been laid off but immediately were hired back. This kind of dealing situations within the limits of the company shows that the managers of this particular company operate with a first priority the people working with them, the employees, and have figured out that by keeping their employees satisfied in their working environment they will manage in a much better and efficient way to satisfy their customers, upon which the existence and the operation of the company depends . One of the most important movements that characterize the company is the fact that there have been used all the brand new ideas concerning the establishment and expansion of the company in its beginning and much later. For instance a completely different tactic was used for the routes that the company would cover. Meaning there were smaller airports used for the transportation of the people, airports which were not so crowded and the customers surely preferred it in order to finish much sooner all the things they should do during departure and during arrival. Moves such as this on from the side of the Southwest Airlines Co. give a competitive advantage to the company among all others.

One of the major external factors that helped Southwest Airlines in it's expansion in during the latest years, is the fact that the managers of the company took advantage on the decrease in fuel costs in 1998. Travel demand increased in 1998 and the Southwest Airlines among most of the other airline companies reported operating profits. The match of those two parameters, low oil prices and increase in traveling demand had a superior outcome for the company. On the other hand fuel may be an enemy for the Southwest Airlines in the future. Oil prices are surely not predictable and there is no safety provided for any downturns or upturns in the demand and correspondingly the price of it in the near or far future.

The competitors of Southwest Airlines were many. From the first day its establishers met problems in making their vision a reality and to achieve the goals they had in mind. The problems started from the carriers Braniff, Texas International, and Continental, which blocked approval with a temporary restraining order, with the excuse that Texas did not need any more another carrier. After this first battle the Southwest Airlines had very much difficult in recovering the damages done from the delays of the opening of the company. Other competitors followed during the first years concerning the opening of the new airport in Dallas in 1974. Other competitors are considered all the other companies that compete with the Southwest today. Those companies are mainly three, and each one has its competitive advantage against the other one. For instance Continental Airlines later is competing with Southwest because of its much better performance at the moment and seems to reach Southwest. United Airlines is the world's largest airline and has a global system when Southwest does not. United because of its relationships with other shipping companies has managed to decrease its cost coming from travel agents. And finally, Delta, which is the largest air carrier in the US in terms of passengers, freight and mail service. The suppliers of Southwest Airlines do not seem to be as many as the other companies, but only the ones immediately needed for the work to be done. Southwest Airlines does not provide meals during the flight, but only