Comparison of Performance of Southwest Airlines and JetBlue Airways

This paper compares the performance of Southwest Airlines and JetBlue Airways with each other and the industry as a whole based on monthly data collected between 2006 and 2012. The statistical results obtained are commented upon.

BUSINESS RESEARCH METHODOLOGY
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Introduction
The objective of this paper is to compare the performance of two US airline carriers namely
South west Airlines and JetBlue Airways with each other and also the industry as a whole and
thereby comment on the statistical results obtained in this regards. In order to facilitate the
same, monthly data has been collected for the two airlines and the US carrier industry for the
period between 2006 and 2012.
Comparison of Performance
Monthly Load Factors
The load factor is a critical variable for any airline carrier and tends to determine the financial
and operational performance to a large extent. This is because it refers to the extent the
seating capacity of a flight is utilised by the company and hence it makes sense that it should
as high as possible owing to limited variable costs per passenger. Based on the given data, it
is apparent that monthly load factor for the population data corresponding to the Southwest
Airlines would lie between 74.78 and 77.32 with a 95% underlying probability (Flick, 2015).
With regards to JetBlue Airways, the monthly load factor for the population data would lie
between 80.77 and 82.45 with a 95% underlying probability. Based on the above two
confidence intervals, it is apparent that the performance of JetBlue Airways is superior to
Southwest Airlines with regards to monthly load factor as there is no overlapping of the two
intervals determined above (Hillier, 2016). The industry average in this regards is about 81.
Using the one sample t test based hypothesis testing, it can be concluded that while JetBlue
Airways performance is comparable to the industry average but the same cannot be said
about Southwest Airlines which has an inferior performance owing to a lower monthly load
factor in comparison with the industry average (Hair, Wolfinbarger, Money, Samouel &
Page, 2015). As a result, it is imperative that Southwest Airlines needs to show improvement
in this regards.
Monthly Revenue Passenger Miles
Another performance parameter to compare the two airlines and their performance with the
industry is monthly revenue passenger miles. A higher value would be considered better in
this regards. Based on the given data, it is apparent that monthly revenue passenger miles for
the population data corresponding to the Southwest Airlines would lie between 6,200,763 and
6,548,240 with a 95% underlying probability. With regards to JetBlue Airways, the monthly

revenue passenger miles for the population data would lie between 2,006,537 and 2,115,558
with a 95% underlying probability (Hillier, 2016). Based on the above two confidence
intervals, it is apparent that the performance of JetBlue Airways is different from Southwest
Airlines with regards to monthly revenue passenger miles as there is no overlapping of the
two intervals determined above. However, the above data needs to be interpreted in the light
of the difference in market shares for the two airlines exhibited by the following graph.
Source: https://www.statista.com/statistics/250577/domestic-market-share-of-leading-us-airlines/
It is apparent that the market share of Southwest Airlines is more than three times the JetBlue
Airways market share. As a result, it is on expected lines that the passenger miles of
Southwest Airlines are also thrice. In comparison to the industry average, both airlines tend to
show significant variation in terms of monthly revenue passenger miles but this is owing to
the market share of Southwest Airlines being greater than the average size and JetBlue
Airways being lower than the average airlines market share and fleet size (Hair,
Wolfinbarger, Money, Samouel & Page, 2015).
Monthly Available Seat Miles
The monthly available seat miles would also be contingent on the fleet size available which
would be linked to the market share. As a result, the computed confidence interval for the two
airlines is significantly different which is on expected lines owing to the huge difference in
market shares which would imply that available seat miles on a monthly basis for Southwest

Airlines would be more than JetBlue Airways. Also, when compared with the industry
average also, there is significant difference in terms of the given parameter for each of the
two airlines as Southwest offers significantly higher number of flights than an average player
while JetBlue tends to err on the lower end (Eriksson & Kovalainen, 2015). This is clearly in
line with the difference in their respective market shares.
Conclusion
Based on the above analysis, it would be fair to conclude that the monthly load factor for
Southwest Airlines is worse than the industry average which is rather unexpected considering
that the fact that it has a significant market share and therefore would be expected to have a
higher efficiency. However, JetBlue Airways had a monthly load factor which was
comparable with the industry average. With regards to the other two performance parameters
i.e. monthly passenger miles and monthly seat miles, a comparison between the chosen
airlines and also their comparison with the industry is not fair owing to the large difference in
the respective market shares. As a result of this, the respective performance in respect to
these parameters was higher for Southwest Airlines compared to the industry and lower for
JetBlue Airways compared to the industry. However, these results were on expected lines and
are of not much significance.

References
Eriksson, P. & Kovalainen, A. (2015). Quantitative methods in business research London:
Sage Publications.
Flick, U. (2015). Introducing research methodology: A beginner's guide to doing a research
project New York: Sage Publications.
Hair, J. F., Wolfinbarger, M., Money, A. H., Samouel, P., & Page, M. J. (2015). Essentials of
business research methods New York: Routledge.
Hillier, F. (2016). Introduction to Operations Research.New York: McGraw Hill
Publications.