MARKETING 500
February 16, 2016
MARKETING PLAN
Submitted by Team 1
Badritdinova, Roza
Baisetova, Elmira
Barnett, Kelli
Wang, Yi
TABLE OF CONTENTS:
1. EXECUTIVE SUMMARY ................................................................................... 2
2. U.S. AIRLINE INDUSTRY ANALYSIS............................................................. 3
2.1. Industry Definition ........................................................................................ 3
2.2. Industry Size and Growth ............................................................................. 3
2.3. Industry SWOT Analysis............................................................................... 4
2.4. Current Trends in U.S. Airline Industry ..................................................... 5
3. SOUTHWEST AIRLINE ..................................................................................... 6
3.1. SWA Brief History ........................................................................................ 6
3.2. SWA Today’s Facts ........................................................................................ 6
3.3. SWA Marketing Mix ...................................................................................... 7
3.4. SWOT Analysis .............................................................................................. 8
4. ENVIRONMENTAL ANALYSIS ....................................................................... 11
5. COMPETITOR ANALYSIS ................................................................................ 12
5.1. AirTran Airways ............................................................................................ 12
5.2. JetBlue Airways .............................................................................................. 13
5.3. Continental Airlines ....................................................................................... 14
5.4. SWA’s Competitive Advantages and Disadvantages .................................. 15
5.5. Egg Diagram ................................................................................................... 16
6. CONSUMER ANALYSIS .................................................................................... 17
6.1. Who Flies SWA?............................................................................................. 17
6.2. Why Do They Choose to Fly SWA? .............................................................. 17
6.3. Perceptual Maps ............................................................................................. 18
7. STRATEGIC VALUES ........................................................................................ 19
8. CONCLUSION ...................................................................................................... 20
1
1. EXECUTIVE SUMMARY
Fortune magazine calls Southwest Airlines "the most successful airline... It provides great
examples and keys elements to running a successful company.”
Southwest Airlines (SWA)
recorded its 34th year of profitability in 2006, a feat unmatched in the airline industry. Annual
profits were up 40% that year despite high fuel costs, terrorist threats in London, and more
restrictive carry-on regulations. How has SWA differed from other major airlines in its ability to
remain profitable in this notoriously unprofitable industry?
This paper is an analysis of the
company and its marketing strategy. It examines the airline industry, Southwest’s place in this
industry, the influences of environmental forces, the four elements of the marketing mix, and the
SWOT analysis of the company. It also looks at Southwest’s biggest competitors and its consumers.
The paper will examine why SWA is the most successful airline in the industry today.
2
2. U.S. AIRLINE INDUSTRY ANALYSIS
2.1. Industry Definition
An airline provides air transport services for passengers or freight, generally with a recognized
operating certificate or license. Airlines lease or own their aircrafts with which to supply these
services and may form partnerships or alliances with other airlines for mutual benefit.
The U.S.
airline industry starts its history with Tony Jannus in St. Petersburg, who conducted the United
State’s first scheduled commercial flight on January 1st 1914. By the 1980s, almost half of all
flying in the world took place in the U.S.
2.2. Industry Size and Growth
U.S. Airline Industry facts according to 2006 Economic Report prepared by Air Transport
Association (ATA), the nation’s oldest and largest airline trade association:

141 Airlines: 20 – Revenue above $1 Billion, 32 – Revenue between $100 Million and $1
Billion, 89 – Revenue below $100 Million

Passenger Enplaned - 744.1 Million

Average passenger load factor – 79.2%

Operating Revenues - $163.824 Million including $101.208 Million passenger revenue

Employment – 544.540 (8.8% of total U.S. employment)

Domestic traffic – 73.4%, Atlantic – 12.0%, Pacific – 7.7% and Latin – 6.7%

U.S. Fleet include 7626 aircrafts including 6629 passenger aircrafts

59% of the 164.6 million domestic person-trips by airplane in 2005 were taken primarily for
leisure purposes, versus 41% for business/convention travel or combined business/pleasure.
During the last 50 years, the airline industry has varied from reasonably profitable to
devastatingly depressed. As the first major market to be deregulated in 1978, the U.S. airline
industry has experienced more turbulence than almost any other industry. The deregulated U.S.
airline industry has never matched the profitability of even the average U.S. corporation.
Profitability in the good years is generally low, in the range of 2-3% net profit after interest and tax.
In bad times losses can be dramatically worse (see Figure 1). The airline industry is believed to be
one of the most difficult industries to manage.
3
Figure 1. U.S. Airline Industry Financial Results 1996-2006 ($ Millions)
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0
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1996
1997
1998
1999
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Revenue
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2005
2006
Profit
The industry is cyclical and is greatly influenced by economic activities. It was also influenced
by the tragedy of 9/11 in the following ways:

Product demand decreased

Product supply decreased, but less than demand

Costs (security, delays, labor) increased significantly

Revenues and profits decreased precipitously
2.3. Industry SWOT Analysis
According to the information on airline industry performance, one of the most important
strengths is its effective cost management, which is important because of the industry’s low
profitability. Another strength of the industry is effective capacity management and its emphasis on
safety. Among the weaknesses are seasonality of business, which influences price level and
therefore revenues, and inconsistency of service quality.
The industry is highly influenced by external factors both favorable and unfavorable for
business development. The U.S. airline industry has opportunities for further growth because of
lifestyle and value changes, growth in demand for services, growth in consumer income, and global
alliances with foreign airlines. However, the analysis shows that the industry has more threats than
opportunities. It is very sensitive to such uncontrollable factors as fuel prices and tax regimes,
economy recessions and exogenous shocks, and competition is high.
4
2.4. Current Trends in U.S. Airline Industry

After five consecutive years of net losses, totaling in $35.1 billion, U.S. passenger and cargo
airlines recorded their first profitable year of the millennium in 2006. The industry posted
$3.0 billion on $163.8 billion in revenues, yielding a profit margin of 1.9 percent.

While conditions have improved and the overall financial outlook is guardedly optimistic,
debt levels remain high, leaving the airlines vulnerable to fuel spikes, recession or
exogenous shocks (e.g., terrorism, pandemics, natural disasters), let alone ill-advised public
policy decisions.

Airlines continue to simplify their operations, in part by reducing the number of aircraft
types. They have disposed of hundreds of older airplanes to curb not only fuel and labor
expenses, but also maintenance costs and fuel-related emissions.

At key hubs, airlines continue to streamline schedules while simultaneously increasing their
global presence both through their own flights and via expanded worldwide alliance
arrangements.
5
3. SOUTHWEST AIRLINES
Mission Statement: The mission of SWA is dedication to the highest quality of customer service
delivered with a sense of warmth, friendliness, individual pride, and company spirit.
Toward the end of the 20th century, a new style of low cost airline emerged, offering a no-frills
product at a lower price. Southwest Airlines (SWA) became the ultimate example of such an airline
and continues to be successful after 36 year of operation.
3.1. SWA Brief History
1967 SWA was founded by Texas businessman Rollin King and lawyer Herb Kelleher
1971 SWA was incorporated in Texas and started service on June 18th with three Boeing 737
aircrafts serving three Texas cities – Houston, Dallas and San Antonio
1973 The first profitable year
1979 Self-ticketing machines are introduced in ten cities
1989 SWA reaches the billion dollar revenue level and becomes a "Major" airline
1994 SWA introduces Ticketless Travel in four cities
1995 SWA opens its website – the first among the airlines
2001 The September 11 terrorist attacks decimate the airline industry, but Southwest maintains
full employment and even opens Norfolk on October 8
2007 SWA operates more than 500 aircrafts between 63 cities
3.2. SWA Today’s Facts

Yearend results for 2006 marked Southwest’s 34th consecutive year of profitability.

SWA is the United States’ most successful low-fare, high frequency, point-to-point carrier.

SWA operates more than 3,300 flights a day coast to coast between 64 cities, making it the
largest U.S. carrier based on domestic departures.

SWA pioneered Senior Fares, a same-day air freight delivery service, and Ticketless Travel.

SWA’s average passenger airfare is $105.68 and the average passenger trip length is about
809 miles.

One of the best-paid, highly-unionized (87%) airlines; “put employees first”; 34, 000
employees who own 80% of stock

Due to crew efficiency, use of the same aircraft, and lack of assigned seating, the turnaround
time for a flight is 26 minutes, half of all other airlines.
6
Even though the last six years were financially difficult for the airline industry, SWA remained
profitable during the years followed after 9/11 (see Figure 3).
Figure 3. Southwest Airline Financial Results 1996-2006 (US$ millions)
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0
1996
1997
1998
1999
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2001
Revenue
2002
2003
2004
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2006
Profit
3.3. Southwest Airline Marketing Mix
Product: passenger service (lots of short flights; complimentary coffee, soft drinks and small
snacks served, meals are not served; no reserved or assigned seats, seating is “open” and available
on a first-come, first-served basis) and cargo career services
Price:

main strategy is to offer the lowest possible fares

For vacationers, the “wanna get away” fares are lowest but also the most restrictive.

For business travelers, the business fares are more expensive, but offer more flexibility.

For the more selective business travelers, SWA recently announced “business select” fares
that reward buyers with additional frequent flier credits, as well as guaranteed early
boarding and free drinks.

special fares available to seniors, military personnel, children and groups of 10 and more.
7
Promotion:

SWA award-winning website

Rapid Rewards frequent flyers program based on trips flown rather than on mileage (one
credit for each flight and after 16 credits you get “Award Ticket” for one free round trip
valid during the next 24 months)

DING program brings you even deeper discounts directly to your desktop. Choose up to 10
airports of your choice and get live updates from your cities.

”Click ‘N Save” send emails to people (6million signed up)

Television (especially sports programming) and printed advertising use humor to attract
customers. (“Wanna Get Away”)

SWA partnered with NBC Weather Plus to offer weather updates and forecasts on their
website for cities they service.

Partnerships with Ronald McDonald’s House, Parkland Burn Camp, & Adopt-a-Pilot

Sponsorship of professional football, hockey and baseball teams

Free publicity
Place:

SWA websites: www.southwest.com, www.iflyswa.com (70% of revenue)

Telephone sales

Automated ticket vending machines (ATVM) at the airports

Airport ticket counter
3.4. Southwest Airline SWOT analysis
The airline industry is highly competitive in fares, frequent flyer benefits, routes, and
service. SWA is one of the most successful companies in this market and the key of its success is its
positioning as a low-fare, short-haul, high-frequency carrier that is fun to fly. SWA uses point-topoint route system, which compared to hub-and-spoke, provides for more direct nonstop routings
for customers. It, therefore, minimizes connections, delays, and total trip time. Other important
keys of SWA’s success are efficient cost management and internal marketing system. SWA keeps
its operations simple: offers a single class, open seating, and no meals; uses one type aircraft fleet
(Boeing 737) to minimize training and maintenance costs; and offers a ticketless travel system to
avoid paying travel agents’ commissions.
8
SWA has some weaknesses compared to its main competitors. SWA does not provide some
in-flight amenities, like full meals or in-flight entertainment. Instead of assigning seats, SWA
assigns each passenger a boarding section based on the “first come, first serve” theory at time of
purchase. This type of “open seating” can be considered both a weakness and a strength. Other
airlines have larger fleets, wider name recognition, and stronger code-sharing alliances with each
other.
Current and future success of SWA depends on many external factors. Favorable factors for
future development include the travel culture of the U.S., the growth of consumer income, and
possibilities for new destinations in regions not yet covered by SWA. However, there are also many
threats which are uncontrollable and heavily influence SWA’s future success, such as fuel prices
and tax regimes, weather and natural disasters, political situations, and high competition both from
air and ground transportations.
Figure 4 shows the internal and external factors affecting the market opportunities for SWA.
Figure 4. Southwest Airline SWOT analysis
Strengths
Weaknesses

Low fares and low operating costs
 Does not serve meals

Innovative and highly productive personnel
 Does not assign seats

Frequency of flights
 No business class

Point-to point route system (more non-stop  No in-flight entertainment
routings, minimum connections and delays,  Domestic flights only
total trip time is shorter)

Serves many conveniently located secondary
or downtown airport

Operates only one aircraft type

Codeshare arrangement with ATA Airlines

On-time performance (99% of service)

Does not assign seats (turn airplanes quicker at
the gate and serve more routes every day)

High level of customer service (fewest
customer complaints)

Number of gates and cities serviced
9

Warm labor relations

High level of brand recognition
Opportunities
 Good economic conditions
 Cultural U.S. background
Threats
 High level of competition both direct and
indirect (automobiles, buses)
 Technological advancements
 Availability and price of aircraft fuel
 Regions not yet covered
 Weather and natural disasters
 Changes in consumer perceptions and
preferences,
spending
pattern
and
system
and
demographic trends
 Economic conditions
 Failure
of
automated
technology
 Political situation
 Tax regulation changes
 Increases in airport rates and charges
 Limitation on airport gate capacity
10
4. ENVIRONMENTAL ANALYSIS
Economic: The economic stability of the country greatly influences the viability of the airline
industry through discretionary income levels and production costs. After the 9/11 attacks, the
airline industry suffered on two levels: renewing trust of customers and battling high costs of fuel.
Fortunately, the incomes of the US have steadily increased and air travel has become less of a
luxury. The labor talks currently in progress with pilots will have a profound impact on the future
business of SWA.
Regulatory: In 1978, deregulation opened the door for many new airlines but had little effect on
already-profitable SWA. Currently the FAA regulates and oversees all aspects of civil aviation. Its
roles include regulation of commercial space transportation, development of new aviation
technology, programs to control noise pollution and environmental effects, and with the dept of
homeland security, development of programs that address safety and security issues.
Social: In the 21st century, lifestyle and values (i.e. time and price sensitivity, family) influence how
people choose to travel. SWA offers less expensive options than leading competitors and have the
best on-time statistics. They were the first airline to offer families with young children the option of
boarding first. The recent elimination of “family first” boarding and “cattle call” boarding may
affect customers perceptions of the company.
Experts predict that given their value and
convenience, there will be little fall-out from the first and little gain from the latter.
Competitive: The airline industry is currently considered an oligopoly. It has stable number of
familiar competitors and the barriers to entry are high. SWA has been the most profitable of all
airlines, mainly due to their consistency and cost control. See competitors section.
Technologic: SWA took advantaged of the increased use of the internet over the past 10 years by
becoming the first airline to have an online website and the first to offer ticket-less travel and online
boarding passes. This allows customers to avoid long ticket lines and keeps company cost low.
The website was the most visited website on the internet in 2000 and includes email notifications of
airfare sales. They continue to use advancements in technology to increase customer convenience
and safety.
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5. COMPETITOR ANALYSIS
Generally airlines compete on the basis of price, service offered, markets served, schedule
(frequency and flight times), amenities, and frequent flier programs. As show in Figure 4, SWA is
second in market share behind American Airlines, but ahead of other bigger and more established
airline companies, like United and Delta. The basic criterion to differentiate among competitors of
SWA is a low cost structure. Other low cost competitors to the airline industry include ground
transportation (i.e. bus, train, and car) but these competitors fall short in their time efficiency. The
three main competitors in the airline industry based on low fares include Air Tran Airways, Jet Blue
Airways, and Continental Airlines. Between them, SWA has the biggest market share at 12%,
compared to Continental Airlines at 8%, Jet Blue at 4%, and Air Tran Airways at 3%.
Figure 4. Airline Domestic Market Share August 2006 – July 2007 (Revenue Passenger Miles)
4%
4%
5%
3%
19%
7%
8%
11%
15%
12%
12%
American
Southwest
United
Delta
Continental
Northwest
US Airways
JetBlue
AmericaWest
AirTran Corp.
Other
5.1. AirTran Airways (founded in 1993)
Product:

Passenger and cargo carrier services: 56 destinations, 750 daily flights throughout the
eastern USA and the Midwest with a few international flights

Fleet consists of Boeing 717 – 200 (87 planes), Boeing 737 – 700 (50 ) with the average
fleet age 4.4 years

Business class service on every flight
12

Advance seat assignment

Special amenities: on-demand XM Satellite Radio (100 channels)

Complimentary Coca-Cola drinks and snacks

Only accepts credit and debit cards for onboard purchases

One way ticket only
Price:

Low-cost carrier

Extra charges include $7.50 to guarantee an aisle or window seat and $20 to book a roomier
emergency exit row seat
Promotion:

A+ Rewards program

A2B corporate travel program

AirTran U student travel program

Partnership with Frontier Airlines which allows to use Frontier’s Early Returns frequent
flyer program

Used Elton John’s image as a promotional tool for new services
Place:

Internet (58% in 2006)

Buy-Pass airport self-service kiosk

Telephone
5.2. JetBlue Airways (founded in 1999)
Product:

Passenger and cargo carrier services, 56 destinations in 6 countries

Fleet consists of Airbus 320A (104 planes), Embraer 190 (30) with the average fleet age 3.1
years

One-class service with leather seats, Live TV (36 channels of live DirectTV satellite TV
programming at every seat), 100 channels of XM Satellite Radio, Fox TV programs + 20th
Century Fox, The New York Times in the form of an in-flight video magazine

Food: popular brands like Dunkin Donuts, Terra, Best Cellars Vine and many other

Gives passengers more legroom than any other coach carrier: 36 inches (91 cm)
13
Price:

Low-cost airline
Promotion:

“Bill Me later”: no payment up to 90 days

”True Blue” program: 100 Points = One Free Round-trip Flight (Short, Medium and Long
flight each from 2 to 6 points). Members get double points for booking online

Advance notice to loyal customers about special promotions

“Letter ads” style

Partnership with 20th Century Fox's film "The Simpsons Movie" to become the "Official
Airline of Springfield"

Codeshare agreement with Cape Air

Shop Blue: sell different products (clothes) under the brand name
Place:

Internet (approximately 80%)

Telephone (20%)
5.3. Continental Airlines (founded in 1934) – Eastern and Central part of USA
Product:

151 domestic airports, 120 international, more than 3000 daily departures

Fleet consists of Boeing 737-300 (48 planes), 737-500 (63), 737-700 (36), 737-800 (96),
737-900 (12), 757-200 (41)

In-Flight entertainment. This year Continental features docking capability for Apple
Computer’s iPod portable music and video player. This will enable the IFE system to play
music, television shows, or movies stored on the iPod, as well as function as a control
system

Two-class layout: First/BusinessFirst and Economy Class

Food service on all flights including domestic economy cabin, headsets are available for $5
Price:

Was rebranded as a low-cost carrier in 1983
14
Promotion:

Member of a SkyTeam Alliance, along with Delta Airlines, Norhwest Airlines and KLM

Codeshare arrangement with Amtrak rail services to some cities in the northeastern

In March 2008, a new Open Sky Agreement with the EU takes effect

OnePass frequent flyer program allows passengers to accumulate miles on two major
airlines, namely Continental and Eastern, in one frequent flyer program

Frequent flyer partnership with more than 12 airlines and 9 car rental companies

The President Club: discounted membership for its airport lounge
Place:

Internet (about 99 % of customers use electronic ticketing: eTicket)
5.4. SWA’s Competitive Advantages and Disadvantages
When comparing SWA to its main competitors, we emphasize the following advantages and
disadvantages:
Advantages:
Disadvantages:

First introduced as low-fare, therefore

No in-flight amenities
known as low-fare leader

No assigned seats
A lot of short distance flights, more

No full meals
nonstop routings

No business class

High frequency (flights/day)

Only domestic flights

Low turn-around time at gate

Fewer strategic alliances with other

Open seating

No paper tickets

Rapid Rewards program based on trip

larger airlines
number not mileage

Offers more low fares than competitors
15
5.5 Egg Diagram
All Airlines
Automobile
Punctuality
All Airlines
Convenience
Automobile
Bus, Train
All Airlines Short Haul
SWA
Email
Notification
Automobile
Bus, Train
AirTran
JetBlue
Price Continental
Friendly Service
All Airlines
Direct Market
All Airlines
All Airlines
Because of the nature of the airline industry (i.e. oligopoly, one similar product, etc.), the
elements that make one company successful are used by all other companies in that industry.
Southwest prides itself on its low prices, convenience, friendly service, and punctuality. It was also
a pioneer in using the internet to establish a direct connection to the consumer via online sales and
email notification. Since this revolutionary change, other airline companies have followed suit. All
companies offer similar services with only slight differences. It is these differences between which
the consumer must decide when choosing an airline.
16
6. CONSUMER ANALYSIS
In 2006, SWA carried approximately 84 million customers, a 12.4 percent increase from the
previous year, and consistently had the Highest Customer Satisfaction ranking of all major airlines.
According to the Department of Transportation’s Air Travel Consumer Report, SWA has had the
fewest number of customer complaints since 1987. Who are these customers and what makes them
choose and continue to choose SWA as their preferred airline?
6.1. Who Flies SWA?

The company’s three general fare options are aimed at three target markets: vacation
travelers, business travelers, and elite business customers.

Forty percent of SWA passengers are traveling for business. Only 25% of them pay a full
fare. SWA is hopeful the added benefits for elite business customers will result in higher
sales of full fare tickets.

Half of the business passengers are male and SWA reaches this target audience by
advertising during televised sporting events.

SWA advertising emphasizes the number of short, non-stop flights between major cities.
This availability appeals to business fliers who want to get to their destination and get back
home fast.

Vacationers include men, women, families, and seniors. They are usually looking for the
best value for their money and SWA offers them great deals on vacation packages and
senior discounts.

SWA has a 70% market share in intra-California flights.

WA’s capacity in 2006 included East 30%, Midwest, 17%, Heartland 10%, California 17%,
and the remaining West 26%. In 2006 and 2007, expansions in Chicago, Dallas, Denver,
Washington, and San Francisco helped boost customer numbers and revenues.
6.2. Why Do They Choose to Fly SWA?”
SWA advertises as the “low-fare leader”, but they also emphasize customer service and
convenience.
A survey of passengers over the Thanksgiving weekend confirmed that these
perceptions have effectively reached SWA customers.
17

“I love Southwest, never fly anything else. They are efficient and on-time, and they never
lose my luggage.”

“SWA offered a direct route from Nashville to Chicago at a good time.”

“We fly Southwest because of the great service; the crew is friendly and helpful. Cost is not
really an issue; I’d pay more at another airline if the service here was different.”

“I like the family-friendly seating. We get to board early which allows us time to settle in
with our child. We were also pleased to get a direct route from Los Angeles to Nashville.”

“Don’t forget about the Senior Fares!”

“Their website is simple, very easy to use.”
6.3. Perceptual Maps
An essential component of a successful positioning strategy is gaining a better
understanding of customers’ perceptions of quality of services provided by airlines. We examined
airlines’ price level versus convenience (Figure A) and level of comfort versus punctuality (Figure
B). Convenience is measure by frequency of flights, variety of destinations, possibility to fly nonstop. Punctuality or “on-time performance” is defined by departure within 15 min of the scheduled
time. Level of comfort is measured by such characteristics such as in-flight amenities, availability
of business class, and overall comfort of aircraft used.
A. Price Level versus Convenience of Service
B. Level of Comfort versus Punctuality
Very convenient
Punctual
SW
SW
UA
DEL
CON
NW
AA
AT
JB
JB
US
DEL
CON
Low price
High price
UA
AT
Low comfort
High comfort
AA
NW
US
Not convenient
Not punctual
Note: AA=American Airlines; CON=Continental Airlines; DEL=Delta Airlines; NW=Northwest Airlines; SW=Southwest Airlines;
UA=United Airlines; S=US Airways; JB=Jet Blue Airways; and AT=Air Tran Airways.
18
According to the data above SWA’s image among its customers is one of low-price and
limited comfort with high punctuality and high convenience.
7. STRATEGIC VALUES
In this paper, we examined why Southwest Airlines is considered the most successful airline
in business today. Success is defined as having a favorable outcome or having obtained something
desired or intended.
SWA is successful in terms of profitability, employee satisfaction, and
customer satisfaction.
The first goal of most businesses is to make a profit. Southwest has been profitable 34 of its
36 years in business. It has done so by offering a product that is easy to access, is targeted to
specific demographics, and is affordable.
But low fares are not the only strategy. A low-cost
business model, including using a single type of jet, operating an efficient point-to-point route
system, and using assets in a highly efficient manner, was crucial to early and continued success.
The other major airlines compete by adding benefits and luxury, resulting in added costs. Their
proposition has been, and still is, 'We have something more over what other airlines are offering.'
SWA was able to think outside the box: they identified consumers interested in service and
convenience, not additional frills. The company further lowers cost and increases profitability with
direct marketing through their award-winning website, low turn-around time facilitated by efficient
employees and an open-seating policy, and the best fuel hedge program in the industry.
Southwest’s model business plan is preserved by its employees and the company
emphasizes putting employees first. The airline’s chairman states, “You put your employees first
and if you take care of them, then they will take good care of you. Then your customers will come
back, and your shareholders will like that.” Because of this commitment, there is trust and respect
that is not found in the competitors hallways. The pilots earn the highest salaries in the industry and
there has never been a salary cut or layoff. In return, the employees exhibit a dedication to the
highest quality of customer service delivered with a sense of warmth, friendliness, individual pride,
and Company Spirit, which is the company’s mission statement.
The company’s symbol of freedom is not just an advertising phrase. It symbolizes the
company’s effort to provide customers with friendly, frequent, convenient, point-to-point, punctual,
and low cost flights. As a result, the company has the lowest customer complaint rating and the
highest profit margin, making it the most successful airline in the industry.
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8. CONCLUSION
Southwest Airline’s low-priced fares are a brand equity, which it "owns" in the
mathematical sense of being the only major airline with a strong score on this attribute based on
consumer research. However, it cannot survive on the basis of price competition alone, especially
with the competition from airlines like JetBlue and AirTran.
Fortunately, while focusing on
competitive prices, it also emphasizes other factors, such as frequency and convenience of
scheduling, facilities, transportation safety and security procedures, customer service, and cost
controlling. This gives the company a strong competitive advantage. The future is unpredictable.
Even with forecasting and hedging, it is difficult to predict which airline will continue to be
successful.
success.
Continuous environment scanning and adaptation will be a key factor for future
With the current success of Southwest Airline’s business plan and marketing strategy,
their future success is certain and will make them a company worth watching and emulating.
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REFERENCES:
1) Annual reports of the U.S. Airline Industry. Years 2006 and 1996 – Air Transport Association http://www.airlines.org/economics/review_and_outlook/annual+reports.htm
2) U.S. Airlines operating revenues http://www.airlines.org/economics/specialtopics/Airline+Categories.htm
3) Domestic airlines market share US Department of Transportation / Research and Innovative
Technology Association - http://www.transtats.bts.gov/
4) Statistics by US Department of Transportation / Research and Innovative Technology
Association
http://www.transtats.bts.gov/databases.asp?Mode_ID=1&Mode_Desc=Aviation&Subject_ID2=0
5) The U.S. airlines relative positioning based on attributes of service quality
6) Southwest Airlines official website www.Southwest.com
7) Southwest Airlines Company Annual Report 2006
8) Southwest Airlines Wikipedia http://en.wikipedia.org/wiki/Southwest_Airlines
9) www.cbsnews.com/stories: “Something Special About Southwest Airlines”, Sept 2, 2007.
10) www.star-telegram.com/business: “Southwest pilot talks proceed quietly.”, Nov 1, 2007.
11) http://ethical-employment-standards.suite101.com :”Southwest Airlines: LUV in the Air”, Aug
12, 2007.
12) www.usatoday.com/travel :”Southwest Airlines ends ‘family first’ boarding”, Sept 19, 2007.
13) http://money.cnn.com/news :”Southwest Airlines and NBC Weather Plus Have Their Eyes on
the Skies for You”, Oct 22, 2007.
14) Glittell, J.H. The Southwest Airlines Way: Using the Power of Relationships to Achieve High
Performance. Fortune Magazine
15) Barlow, Southwest – A model for robust business. The Houston Chronicle, 2002.
16) Jet Blue Airways official website www.jetblue.com
17) Air Tran Airways official website www.airtran.com
18) Continental Airlines official website http://www.continental.com
19) http://www.lowfares.com/airfare
20) http://en.wikipedia.org
21) www.bts.gov/programs/airline_information
22) www.faa.gov
23) www.expedia.com
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