| Group 1 |
| Section 4
Southwest airlines 2008 |
Case analysis for Southwest Airlines by Group 1, Section 4 |
1. Problem Statement
Should Southwest Airlines expand operations into new markets?
* Low entry barriers due to Open Skies agreement with European countries
* Successive wars and acts of terrorism resulting in low passenger preference to air travel
* High fixed cost industry with low net profit margin
* Passing of Airline deregulation act of 1978 helped reduce fares and allowed many more airlines to enter US market
* Economic slowdown resulting in job cuts and thus reduced passenger traffic
* Airline industry debt ...view middle of the document...
* High passenger demand for air travel increasing airport congestion and reducing operational efficiency
a) Ticket fares
b) Fuel Costs
d) Demand for air travel
e) Customer service
g) Industry rivalry
i) Operational efficiency
j) Labour union
5. Analysis of Critical Factors
l) Ticket fares – Low fares were possible due to operational efficiencies which raised the demand for SWA tickets.
m) Customer service – Southwest Spirit created a significant POD in gaining and retaining a large customer base.
n) Wages – They gave highest salaries to employees which ensured commitment from employees towards Southwest goals.
o) Leadership – Kelleher still plays a dominant role in the decision making and a clear succession plan should be established.
p) Operational efficiency – Lowest turnaround time ensured more flights per day reducing idle time of aircrafts and...