Southwest Airlines - Case Study Example

Southwest Airlines Case Questions Follow the instructions provided in your assignment when responding to the following questions To what do you attribute the success of Southwest Airlines? The success of Southwest Airline can be credited to the innovation and strategic services that the company initiated in the market. With the market crowded with major carriers mainly interested in hub-to spoke destinations due customer densities and in taking advantage of large scale of economies (Yilmaz 2010), Southwest airlines embarked on a different service aimed at serving short routes with many number of trips.

Another factor was the strategy to ensure its fleet was fully utilized by ensuring no plane was grounded for more than 10 minutes in servicing. In addition, the company viewed offering the air service as an innovative and environmentally responsible industry driving at economic and social progress (Rochat, 2007). The fun campaign led by Keller and involving crews and all employees was an innovative way of making their flights a fun to all customers. Another factor behind the success was the cost cutting strategies which included contracting fleet maintenance and fuel supplies, fewer than average operators and crews in all its services, and the no frill policy was a different approach that ensured the company minimized its costs.

Morrison (2001) elaborates how the low cost Carriers had to adopt some of the strategies used by Southwest to cut costs. Making employees as part of a larger family of Southwestern Airlines was perhaps the largest asset that the company utilized to succeed in the market. 2. How significant is the 10 to 15 minutes turnaround time of Southwest’s aircraft in terms of savings in investment and utilization of its aircraft compared to competitors? Brueckner, Lee & Singer (2012) elaborate one of the main characteristics of LCC as cutting costs while still charging very low fares compared to major airlines.

The 10 to 15 turnaround therefore ensured Southwestern airline maximum usage of its fleet while carrying a below average or average number of customers per trip. In addition, the high turnaround ensured the business class customers could effectively use the company due to reliability, speed and effectiveness of reaching these destinations, including the ability to acquire a ticket in the airline’s gates and board the next flight to their destination. The high turnaround therefore translated to more customers due to reliability, and effectively utilizing the fleet, which increased the company’s profits.3. What challenges is Southwestern facing in the future and how should they meet those challenges?

One of the challenges faced is flooding of other low cost carriers in the market with better services, the threat of terrorism rapidly increasing in air transportation making the turnaround required difficult to maintain, and rising fuel costs that may increase its operating costs in addition to the tantrums in global economy. According to Stanford University (2008), airline companies that have to remain relevant in the market have to drastically implement changes according to the market demands.

The company has to be more technologically advanced to offer superior services to customers at a lower cost, which is the strategy being used in Virgin Atlantic Airlines (German Aerospace Centre, 2008)4. What should their business and operations strategy be for the future? One strategy in Southwestern Airlines should be to venture in regional markets, such as in Canada and South American States, to expand its market away from the crowded LCC services. Due to competition, the company has to strategically ensure airlines optimization, react quickly to market changes, improve its capacity and services, network planning, improved crew management, and price and revenue management through its expansion plans (Lufthansa Systems, 2008).5. Will Gary Kelly, the new CEO, be able to maintain the profitability of Southwest Airlines while insuring the continuation of their unique culture?

Kelly will be able to maintain the profitability of Southwestern Airlines through continuation of the culture in ensuring employees have a share of ownership in the company, while at the same time ensuring the culture of offering services in a unique and hilarious way as led by Keller is continued. However, more innovations have to be done on these to make them unique in the market. This is because; currently, many leading companies are taking significant steps to improve their sustainability performance and improving their identity through innovation (Grayson et al, 2008).

ReferencesBrueckner, J.K, Lee D., & Singer, S. E., (2012). Airline Competition and Domestic U.S. Airfares: A Comprehensive Reappraisal. http://www.socsci.uci.edu/~jkbrueck/price%20effects.pdfGerman Aerospace Center (2008). Analysis of the European Air Transport Market. Document Control Information. http://ec.europa.eu/transport/air/doc/abm_report_2008.pdfGrayson, D., Zhouying J., Mark L., Miguel A. R., Sarah S., Simon T.,(2008) A New Mindset for Corporate Responsibility. http://www.biggerthinking.

com/docs/en/a_new_mindset_white_paper.pdf,Lufthansa Systems (2008). Airline Management Solutions http://www.lhsystems.com/topic3/topic32/,Morrison, S., (2001). Actual, adjacent, and potential competition: Estimating the full effect of Southwest Airlines. Journal of Transport Economics and Policy 32, 239-256Rochat, P., (2007). Air transport – a global approach to sustainability, http://www.airportint. com/categories/environment/air-transport-a-global-approach-to-sustainability.asp. .Stanford University (2008).

The Airline Industry, http://adg.stanford.edu/aa241/intro/airlineindustry.html. Yilmaz, K.A., (2008). The Corporate Sustainability Model for Airline Business. European Journal of Scientific Research 22(3), .304-317