Southwest AirlinesSouthwest Airlines

Submitted by: Ravi Bhagwat (11030141092)

Sahil Chopra (11030141085)

LUV

Timeline… June 18, 1971

Began airline service, HQs in Dallas, Texas Flights to Houston, Dallas, and San Antonio

1977 SW stock listed on NYSE as "LUV"

1982 Appointed Herbert D. Kelleher President, CEO, & Chairman of the Board

1984 #1 in customer satisfaction (4th year in a row)

1990 Announced billion dollar revenue mark Officially declared a "Major" airline!

May 2003 Top ranked domestic passenger airliner

2006 Southwest’s 34th consecutive year of profitability

Facts / Milestones…

Low-fare, high frequency

Point-to-point carrier

Largest domestic U.S. carrier

Largest airline in America

More than 34,000 Employees

More than 3,200 flights a day

Top competitors:

AMR Corp.

Continental Airlines

JetBlue

Fly more than 64 million

passengers a year

58 destination cities (59

airports)

One Plane fits all

Point to Point flying

Simple In-flight service

No frills, No fees

Strong Management

A relatively happy workforce

Aggressive fuel hedging

Secrets of SuccessSecrets of Success

• Fuel hedging • Purchased fuel options for years in advance to

smooth out fluctuations in fuel costs• Substantially increased its hedging in 2001 in

response to projections of increased crude oil prices

• Operated only one model of aircraft• Boeing 737, medium range-narrow body

commercial passenger jet aircraft• Easy to replace parts and ground support

equipment

Basis for profitability

Business Segment

Service in markets with of frequent, conveniently timed flights and low fares.

Business travelers who more time-sensitive than price-sensitive and wanted weekday flights at times suitable for conducting business.

Price-sensitive leisure travelers who wanted lower fares and had more flexibility about when to fly.

ACQUISTIONS

MUSE AIRLINES/TRANSTAR AIRLINES in 1985

MORRIS AIR in 1993

ATA AIRLINES in 2008

AIRTRAN AIRWAYS in 2011

SWOT Analysis ...SWOT Analysis ...

Strengths♥ Low price tickets ♥ Low operating costs♥ Good customer service♥ High frequency service ♥ Productive pilots & ground crew

Opportunities♥ Ability to add scheduled flights ♥ Low prices enable market share

growth

Threatso Big companies emulate

Southwest's low cost modelo Difficulty securing new gates

at existing airports

Weaknesso Doesn’t serve international

flightso One type of airplane

Market Share ...Market Share ...

Year 2006 : Market Share

ConclusionConclusion ... ...

♥ "Its part of our culture. We’ve always said we'll do whatever we can to take care of our people. Thats what we’ve tried to do.“

♥ Southwest Airlines was able to operate their business relatively undisturbed. It was only in the poor economic conditions that suddenly Southwest Airlines' method of operation became the ideal model for its competitors.