problems in case study of southwest airlines in 2008

1. Presented By:
 Mahesh Sharma(11410466)
 Amit Sharma(11405089)
 Nikhil Allhar(11403096)
 Manpreet Kaur(11404239)
 Rimaljeet Kaur(11402049)

2.  How did Southwest Airlines gained competitive edge and been
consistently profitable?
 Due to number of crisis rising up in the Airline Industry and
downward sloping Economy of US, will southwest Airline be able to
maintain its profitability?
 With rising number of imitators , Is Southwest’s competitive edge
strategy secure?
 Can Southwest Airlines expand internationally with same strategy?
 How is Southwest Airlines going to maintain its low cost strategy with
fluctuating oil prices?
 As company has lowest turnover time of 15 minutes, does this adds to
cost of maintenance of air-planes(more frequent use adds to more
wear and tear of airplanes)?

3.  Faster than average gate turnarounds to yield higher utilization
rates.
 Low fares
 One class of seating.
 One type of airplane – Boeing 737.
 Point-to-Point flight routes.
 High employee productivity.

4.  A very successful fuel hedging program.
 Serves relatively less-congested airports to achieve high asset
utilization and reliable on-time performance
 Vision of CEO HERB KELLEHER and work culture provided
 Positively Outrageously Service( Southwest name of
Customer Service)

5. Southwest Airlines has operated profitably even in the recession of 2008
through its forward looking strategies:
 Pets onboard
 Unaccompanied minor service charges
 Early Bird-check in
 Aggressive television advertising campaign - Bags fly free only on
southwest
 Conservative strategy of modest number of daily departures
 Future plans for development of next generation Rapid Rewards
frequent flyer program

6.  Southwest Airlines had standardized its fleet by Boeing 737 aircrafts. Its
Cost Leadership is one factor which makes it market leaders.
 Southwest Airlines follows a Point-to-Point transit system while most of its
competitors follows a Hub and Spoke transit mechanism; and changing
from the latter to the former is not recommended now.
 Southwest Airlines has highly selective hiring process which ensures that
its workforce has the requisite motivation at par with the spirit of the
Airlines. This cannot be as easily applied by its rivals which are mostly
very hierarchical and formal.

7.  Southwest Airlines has been able to sustain a Differentiation
Leadership. No other carrier can practically think of depending too much
on its on-board staff in absence of any kind of in-flight entertainment.
 Southwest Airlines innovated the
strategy of fuel hedging for a long
time, something which its rival
cannot start.

8. Southwest airlines need to partner as their own airlines is not enough to
expand internationally
 2008- partnership with West jet Airlines to synchronize flights between
Canada and USA
 2011-May, Southwest acquired Airtran to operate multicraft fleet service
for flights to Caribbean and Mexico
 2014-added a daily non-stop flight from Baltimore/Washington to San
Jose, Costa Rica
 2015-airline is currently constructing its first international terminal at the
Hobby Airport in Houston. The airline has invested $156 million in the
construction of this five-gate terminal
 2015- March The carrier launched a seasonal weekly flight between Aruba
and Houston

9.  Fuel price hedging contract lasted till 2008
 After 2008, Southwest Airlines have to pay market
rates for fuel

11.  Southwest Airlines has strong presence in domestic market,
they should form optimum strategies to expand internationally
at big level , as markets in Asia and Latin America have lots
of potential
 Such a strong work culture should be preserved and this
legacy of Herb Kelleher should be carried forward
 Southwest Airlines should formulate strategies to maintain
low operational cost as rising operational cost could be a
challenge.

12.  Southwest Airlines had been consistently profitable since its inception
 Work culture of putting employees over customers has actually lead
airlines to success because happy and satisfied employees will make
customers happy and help retain them.
 Airlines have actually convinced customers that low price is just not their
introductory strategy but their main business model
 Low cost flights has increased number of airline travelers by significant
number
 Airlines had strong domestic presence and hence they are expanding
profitable at international platforms.