The Impact of Southwest Airlines on the Airlines Industry - Case Study Example

A Study of Southwest Airlines Table of Contents A Study of Southwest Airlines Executive Summary 3 Background 4 The Impact of Southwest Airlines on the Airlines Industry 4 Corporate Social Responsibility at Southwest Airlines 5 Ethical Practices at Southwest Airlines 6 Internet and External Environment of Southwest Airlines 7 Conclusion 11 References 11 Executive Summary The report is a discussion about the Southwest Airlines and various aspects related to it. The report starts with a brief overview and history of the organisation. It then goes on to look into the impact brought in by Southwest airlines in the Airlines Industry. The third part focuses into the corporate social responsibility issues of the Southwest Airlines. The next part of the report talk about the ethical conducts of the company with respect to the customers and the employees. The last part of the report is a basic discussion of the internal and external factors of the company which has been done with the help of a SWOT analysis. Background Southwest Airlines has been an aggressive pioneer in the air transport industry since the organizations origin. The firm was initially formed as Air Southwest Co. on March 15, 1967 by representatives Herb Kelleher and Rollin King. In the year 1971, promissory notes were sold by the president, Lamar Muse for around $1.25 million in order to cover the start up expenses and the cost of the aircrafts (Southwest.com, 2014). Without further ado from there on the organization transformed its name to Southwest Airlines Co. (Southwest). The Impact of Southwest Airlines on the Airlines Industry The very idea of low cost airlines was first brought in the airlines industry by Southwest airlines. This idea had a great impact on the overall industry at large. They offer cheap air tickets with nothing more than seats in the aircraft. The tickets can only be found if they are reserved months in advance. During the flight no food or beverages are served and the comfort has also been reduced because of the accommodation of greater number of seats and maximum utilization of passenger cabins. Although there are disadvantages to this kind of setting as they have to land in less frequented airports on order to save on their expenditure. The development of the Low cost carriers (LCCs) is seemingly the absolute most critical element as of now developing the airline industry. The airline industry in constantly evolving and it has the ensuing effect on both fares and the service. To be sure, the effect of LCCs and the focused reactions they bring out from occupant system transporters is liable to be the prevailing topic in the carrier business for a long time to come. Regardless of their tragic effect on the generally speaking aerial shuttle industry, Lccs have appropriated shockingly little consideration in the current trading and lending writing. Different studies (Dresner, Lin, and Windle 1996, Dresner and Windle 1999) have contemplated the course level effect of LCC passage on in-cumbent transporters. All the more as of late, Boguslaski, Ito, and Lee (2002) break down passage designs through-out the 1990s in Southwest Airlines course framework. Few in any studies on the other hand, have straightforwardly endeavored to measure the level of LCC infiltration on the real system bearers or give an evaluation as to the potential for future LCC development. Also, while more level expenses are doubtlessly the essential source behind the accomplishment of LCCs, business choice has likewise assumed an imperative part. This paper intends to fill this crevice in the expositive expression by (a) recording some adapted actualities about the development of LCCs since 1990, (b) assessing probit passage models to distinguish the aspects of city-pair showcases that have been the most powerful in deciding LCC entrance and (c) evaluating the potential for proceeded LCC expansion–in both the short and long term–and surveying what sway this may have on the real system bearers. Corporate Social Responsibility at Southwest Airlines Southwest airlines have been continuously ranked among the top when it comes to customer social responsibility. Created by Boston College Center for Corporate Citizenship and Reputation Institute, the CSRI ranks organizations in seven zones: citizenship, influence, working environment, initiative and execution, products/services, and advancement. Notwithstanding being around the main 50 by and large, Southwest Airlines stacked up around the main 25 in the working environment classification. As the main aerial shuttle on the agenda, were glad to be in the organization of associations regarded for their social obligation. Its a dependable fact that Southwest Airlines has faith in treating their Customers right, making the Best Place to Work for our Employees, lessening our ecological foot shaped impression, and being a trusted group accomplice. Thus, it surely is pleasant to have outsider studies demonstrating it! The CSRI study demonstrates how organizations notorieties are influenced by open recognitions of execution identified with citizenship (the group and natures domain), administration (morals and transparency), and work environment polishes. The 2010 effects indicate that numerous organizations are enhancing their socially capable practices and people in general are progressively more cognizant and intrigued by these exertions (Agnew, 2010). As an industry pioneer, it’s significant for Southwest airlines to give extraordinary profits and preparing to their Employees, actualizing proficient operations to decrease outflows, offering once more to their groups, compensating their Employees for their dedication to volunteering, and giving great Customer Service to their Customers. Consistent with the study, CSR-centered organizations proactively empower group development and advancement, and voluntarily kill hones that may hurt the earth. For Southwest, that means the honour for their triple bottom line: "Our People, Our Performance, and Our Planet" (Agnew, 2010). Ethical Practices at Southwest Airlines The Employees of Southwest Airlines convey Legendary Customer Service, with Spirit and LUV, raised with Common Sense and Good Judgment while keeping Safety principal. They are hard working and treat their Customers and one another the way they should be to be dealt with. To guarantee flourishing and employment security for their employees and customers, they try and remain productive. It is their obligation to give a sound come back to the Shareholders. One of their essential competences is their Low Costs empowering them beneficially to charge Low Fares. Southwest Airlines put a high esteem on genuineness, honesty, and moral obligation. Furthermore, different elements and people who perform administrations for Southwest ("business partners") may be liable to this Code by contract or assention. This Code does not however cover all Southwest approaches or all laws. In the event that a law clashes with this Code, they accompany the law. Assuming that a nearby custom or practice clashes with this Code, they accompany this Code. This Code clears up Southwests rights and desires as a boss, yet does not add to or subtract from Employee rights or in any way make any contractual occupation rights for Employees. Internet and External Environment of Southwest Airlines In order to understand the internal and external environments, we have done a SWOT analysis to understand the strengths, weaknesses, their opportunities and threats. Strengths The strengths of a firm are the preferences that the organization holds inside and they help it in achieving the playing point against different organizations (Hosseini-Nasab, Hosseini-Nasab & Milani, 2011). Southwest Airlines has distinctive qualities that empower it to be aggressive and to win more clients, while creating reliability for the existing clients. These qualities incorporate: a) technological assets The organization has had the ability to utilize engineering as a solid focus to will more clients. Through innovation, the organization has had the ability to make the checking process speedier for the clients, which makes a favored aerial shuttle to a lot of people. Innovation has empowered the organization to be capable and to present the paperless tickets. This empowers the clients to print their tickets and move ahead specifically to their entryways without queuing for the tickets. b) human asset Southwest Airlines has exceptionally prepared representatives, whose center is on the profit of the client. They offer the best nature of client mind and keep tabs on fulfilling the necessities of the clients. The client mind authorities in the Southwest Airlines are permitted the likelihood of curving the standards to guarantee client delight in the event that it is the correct thing to do. c) good will The Southwest Airlines is a standout amongst the most respectable airlines in the United States, picking up it notoriety because of its administrations to the clients, and being a minimal effort carrier. This has empowered the Southwest Airlines to be exceptionally great as it gain numerous clients trying to go through it. d) facilities Southwest Airlines has Boeing flies that make treks to diverse areas, guaranteeing clients capacity to venture out to better places. The organization has likewise obtained the Airtran, empowering it to add to the armada of its streams and to serve more areas. This gesture helps in getting clients, who look to visit diverse areas on the planet. Weaknesses The shortcomings of a business are the deficiencies, disservices or limits that decrease the chances of viable execution (Hosseini-Nasab, Hosseini-Nasab & Milani, 2011). Like any other organization, the Southwest Airlines has its shortcomings which reduces the advantages and strengths. Reservation facilities - in a few cases, the Southwest Airlines clients wishes to visit places, some, which are not served by the organization. Southwest expects to keep on devoting critical innovation assets to suit another reservation framework that will permit the organization to include global objectives, enhance income administration, and client administration functionality. Opportunities Opportunities are the circumstances in which the organization profits from utilizing the arrangement (Coman & Ronen, 2009). Hence, Southwest Airlines has numerous chances that can be utilised to empower profit and future development of the business. The opportunities for Southwest airlines are: a) innovation Southwest Airlines has been on the cutting edge with enhancement, looking to unit new method of serving the clients better. The organization has been giving immediate flights to explorers coming to southwest with a specific end goal to decrease travel time. The aerial shuttle is additionally one of the few airlines that offer excursion bundles that permit explorers to buy lodging, flight, and rental autos. Among the most exceptional notoriety of the Southwest Airlines is, no doubt the first carrier to advance client relationship. b) technology Use of innovation exhibits a significant chance to the Southwest Airlines, as it has been utilizing engineering to give quicker checking and paperless tickets. With the utilization of engineering, the organization will have the ability to impart the planes plans through web to clients, empower speedier methodology of tickets, and appropriate more reservation through sites. Threats Threats are the external factors that will put the survival of the arrangement at danger. Dangers to business exhibit a test to the organization administration to verify that key methods are actualized to guarantee that the organization secures its future survival (Kay, 1993). Like any viable organization, Southwest Airlines faces distinctive dangers, which the administration necessities to pay special mind to. These incorporate a) Competition Among the real dangers confronted by the organization, rivalry from significant airlines is the focal one. The organization confronts hardened rivalry from organizations, for example, the Jetblue, which are real players in the business sector. However with great techniques and execution arrangement of movement, the organization has the ability to prevail over rivalry and secure its future survival. b) Changing requirements of the clients The requirements of the clients are knows to dependably be changing, and in the event that they dont adjust to transforms, they could lose business. Then again, with continuous improvement, innovative work, Southwest Airlines has the capacity to give the required administrations to the clients. Along these lines, the client will guarantee that the customers are enchanted and guarantee that it upholds the future of the business. Conclusion After discussing all the issues about Southwest Airlines, we can understand that they have had a very good history in terms of all the above aspects. They have been the market leaders from the time they came in business. The whole idea of low cost airlines was introduced by Southwest airlines which made a huge impact on the airlines industry as a whole new segment was created by them. Their strong corporate social responsibility ensures they have constant market of customers. They have clear issues laid down when it comes to their ethical conduct and that ensures them to maintain strong ethical value towards their service and customers. They need to look into their weaknesses and threats by building on their strengths and utilizing their opportunities effectively in order maintain their respect and name in the industry. References Dresner, M., J.-S. C. Lin, and R. Windle (1996). “The Impact of Low-Cost Carriers on Airport and Route Competition,” Journal of Transport Economics and Policy, 30, 309–328. Dresner, M., and R. Windle (1999): “Competitive Responses to low cost carrier entry,” Trans-portation Research E, 35, 59–75. Lee, D., and M. Luengo Prado (2002). “The Impact of Passenger Mix on Reported Hub Premiums in the U.S. Airline Industry,” Unpublished Manuscript, Cambridge, MA.  Agnew, M. (2010). The corporate social responsibility index and southwest airlines - nuts about southwest. Retrieved from: http://www.blogsouthwest.com/corporate-social-responsibility-index-and-southwest-airlines/ Southwest.com. (2014). About southwest - southwest airlines. Retrieved from: https://www.southwest.com/html/about-southwest/ Hosseini-Nasab, H., Hosseini-Nasab, A., & Milani, A. (2011). Coping with Imprecision in Strategic Planning: A Case Study Using Fuzzy SWOT Analysis. I-Business. Vol. 3. No.1. pp. 23-29. Business Source Complete, EBSCOhost, viewed 14 October 2011. Coman, A., & Ronen, B. (2009). Focused SWOT: diagnosing critical strengths and weaknesses. International Journal of Production Research. Vol. 47. No. 20. pp. 5677-5689. Business Source Complete, EBSCOhost, viewed 14 October 2011. Read More