Southwest Airlines was created in March 1967. The idea that resulted in Southwest’s achievement was to get travelers to their destinations on time, at the minimum conceivable Prices, and while also upholding customer loyalty. Southwest Airlines is the major airline, in terms of the number of travelers each year, in the United States. Southwest employs ticketless methods and a recurrent flier program that contrasts with other airlines. Southwest has low operational expenses, high effectiveness, and award-winning help desk. Chairman Kelleher states that Southwest has the lowest expenses and most solid balance sheet in the business.
Labor and fuel charges form the largest part of operating expenses for airlines. Southwest relies on a variety of airports, sustains aircraft operation, boosts programs such as e-tickets, and uses the most appropriate and cheapest flying routes. Southwest has a gain over participants by implementing the efficacy of operations scheme. Labor costs, according to Kelleher, typically constitutes about 37% of the operating expenses. Southwest successfully achieves high labor output and passes the savings on to the customers.
As the fuel is the second largest cost, Southwest only documented 18% of their fuel charges which is expressively less as compared to other airlines. Southwest effectively uses technology to ensure smooth operations. Southwest believes that technology equals output. Southwest was the first to introduce ticketless travel. They went on to establish a gateway that supports travel managers in the reservation of trips. Besides their website, they are continually braced with new technology practices.
Southwest is dedicated to delivering effective operations at low costs which allows the corporation to be so popular (Graham,2013).
Economic growth is expressively being advanced in the air transport business. The airline business assists to generate trillions of dollars in commercial activity and helps yield millions of trades. Economic value is being created by swelling the movement of merchandises, people, capital, technology, and designs to other metropolises and republics.
Southwest faces functional challenges such as competition with online services, government regulation, reduction of leisure travel due to terrorism, fluctuations in fuel prices. Due to the unfortunate events of the past, security has been strengthened and the cost of airlines security is increasing. Southwest suffers from minimum income opportunities, such as packages already adopted by many of its competitors. Southwest introduced international services in 2014 and expanded its international market. They offer services to popular destinations such as Aruba, Cancun, Los Cabos, Nassau, Montego Bay, and San Juan (Muduli & Kaura,2011).
The aviation industry in the United States is very competitive. Southwest competes based on price, customer service, cost, the frequency of schedules and convenience, frequently used benefits, efficiency, and productivity. The two main competitors are American Airways and Delta Airlines. Intensified competition can have a substantial antagonistic impact on the results of operations, the financial position and the liquidity of the company. As an interstate airline, it receives economic jurisdiction, regulation and fitness requirements from the ongoing airline of the Department of Transportation (DOT).
To provide passenger transportation within the United States, domestic airlines must have a “certificate of public convenience” issued by the DOT.As we have seen in recent years, most people cannot afford to fly because the unemployment rate is high and the cost of the essential necessities is increasing. Economic growth is slow and inflation is increasing. This is a big factor that hinders the flight of passengers. Southwest Airlines can maintain competitiveness in the future by using opportunities such as national and international markets, growth, research and development, and new technologies. Southwest prides itself on its excellent customer service and its people-oriented existence. Southwest employs employees who fit the model they intend to maintain and extend support in this regard. To ensure the right candidates, Southwest has a strict recruitment and policy process.
To ensure a pleasant customer experience, Southwest has established several policies that make it easier to fly with airlines. The cancellation policy allows customers to cancel the reservation at least 30 minutes before the departure of the flight. This policy will help customers relieve when booking at Southwest. They make sure that customer satisfaction remains their top priority. This builds brand loyalty and can continue to be successful if Southwest continues to focus on such practices. Southwest must continue to strengthen its image and competitive benefits and differentiate itself from its competitors. Southwest’s business model takes advantage of efficient operation, customer satisfaction, and low-cost flights.
While maintaining a solid strategy, Southwest continues to achieve a competitive advantage to maintain relevance in growing markets. Southwest must continue to improve the compensation program for the needs of consumers. Keeping customers satisfied is the greatest competitive advantage any company can have. Southwest is one of the most successful airlines, but there is always room for improvement. Southwest has a reputation of being forward thinking. If it continues to its up gradation and research it will improve its profitability (Singh & Sushil,2013).
It can be concluded that Southwest Airlines is not just a low-cost air carrier, but also a modernizer in achievement in a saturated market. They deliver an improved package at a lower cost. They also propose manifold bonuses for everyone. Their achievement will endure even through stiff financial times purely for brand allegiance and customer gratification.
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