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Southwest Airlines started its operations on March 15, 1967, with the registration of Air Southwest Co. by Rollin King and Herb Kelleher which was to operate within the state of Texas. Kelleher intended that by restricting to Texas, the airline might elude federal by-law. Three of its competitors (Braniff, Trans-Texas, and Continental Airlines) initiated court proceedings which were not decided until three years. Air Southwest succeeded in 1970 after the Texas Supreme Court maintained Air Southwest’s plea to operating within Texas.
Southwest Airlines sought to transform that! It instigated with a humble idea—take your travelers to their last stop when they want to get there, on time, at the lowest imaginable charges, and ensure they experience an unparalleled service.
To make it a reality, Southwest’s decision to go for short-haul routes where the prices were competitive with a road journey. In these short-haul fairs, swiftness and suitability would be vital to dominate the market.
At the start of 2014, Southwest Airlines comprised of 44,831 personnel.
Gary C. Kelly served as the president and chief executive of the airline. Kelly took place of the first CEO Jim Parker on July 15, 2004, and later on took over the position of the ‘President’ on July 15, 2008, substituting previous President Colleen Barrett.
Like many other industries of U.S, the airline business is deeply competitive and extremely volatile. There are various factors which can make or break profitability. One main ambiguity now affecting the industry is fuel charges. Airlines depend on fuel to function and are strictly squeezed by variations in jet fuel charges.
This conglomerate had considerable fuel-hedging opportunities until 2013, however, the corporation lingers to vigorously accomplish its fuel hedge portfolio to give a solution to unstable fuel costs. Opponents never fail to pinch at Southwest’s wings. JetBlue and Spirit Airlines, in particular, are robust, advanced, and low cost (Muduli, & Kaura, 2011).
Southwest Airline’s strength lies in the fact that it has a noteworthy cost benefit as opposed to other conventional carriers, and low functioning costs remain to be one of its competitive strengths. The significant component is its use of one kind of aircraft—the Boeing 737—that makes way for easy scheduling, procedures, conservation, and training. The business also has prepared its fleet with fuel-efficient, performance-boosting unified wings. These winglets outspread flight variety, consume less fuel and decrease apparatus repairs expanses and departure sound (Martin, 2011).
In the face of ever-increasing competition Southwest delivers the quality to the customers they look for—an unparalleled package at minimum possible charges. As stated by the U.S Department of transportation numbers this airline is not only winning a huge number of passenger’s, it’s the major local air carrier in the whole country. Southwest Airlines is known to be the country’s cheap, most customer-oriented airline. It deals mainly short- and medium frequency courses with single-class package besieged at commercial and other passengers. Southwest owes its success primarily to its ethos and its personnel. It is known to have one of the most distinctive cultures among leading U.S conglomerates.
Among many performance milestone’s that Southwest has achieved since its inception there are few things which not only stain its corporate image but can result in events that no successful corporation aspires, therefore they can be termed as weaknesses of the said airline. Once an airliner of Southwest missed maintenance after the deadline, and the jet kept flying 8 days, more than 1400 flights missions. According to the federal aviation administration, it is this violation of Southwest airlines due to which it face hefty fines. Later on, repair and maintenance personnel discovered crashes in the fuselage of an airliner. The establishment fails to work in line with the official procedure to guard the wellbeing of travelers and aircrew.
With the age of monetary globalization and integration of technology in every aspect of the business, Southwest has become a global aviation enterprise. The company added the far-flung routes, augmented the industry keenness and monopolistic research was undertaken. In addition, subcontracting of value-added services, such as online business was also done.
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 (Dobruszkes,2013).
In my opinion, South-west has a very clear long-term competitive advantage over other market players owing to its employee-oriented policies and its dedication to profit maximization through minimizing costs which makes it a perfect employer in eyes of its employees and increases its goodwill in the aviation industry.
In order to maintain the future viability of the airline, Southwest airline should invest more in research and development to discover new ways to cut the costs and bring innovation in its operations, it will not only enable the airline to maximize its profits but it will also make way for increasing spending on its workforce which is the backbone of their operations.
In light of above arguments, it can be concluded that to survive and flourish in airline industry Southwest has to maintain the quality of its customer service, which can be done only if Southwest focuses all of its efforts on improving its operations, employee motivation and its financial health.
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