Southwest Airlines: A Comprehensive Business Analysis Report

This report provides a comprehensive analysis of Southwest Airlines, a major U.S. airline known for its low-cost carrier model. The report begins with an executive summary, then delves into the company's description, products and services, and the benefits offered to users, such as early bird check-in and mobile check-in. It explores customer acceptance, management qualifications, and major accomplishments, including being named Airline of the Year. The report examines the company's uses for capital, investor benefits, market size, growth rate, and market niche, highlighting its focus on low-cost services and point-to-point destinations. The strategic focus and plan, missions, core competency, and sustainable advantages are thoroughly discussed. The report also includes financial and non-financial goals, such as expanding operations and achieving specific return on investment targets. References are provided to support the findings and analysis.

Running head: SOUTHWEST AIRLINES
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Name of the Student
Name of the University
Author Note

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Executive Summary
The report is based on the Southwest Airlines Company. The company is a major airline brand in
the United States with its headquarters in Dallas, Texas. The airline is quite popular for being a
low cost carrier. The airline was established in 1967 by Herb Kelleher. The airline has more than
57000 employees as of 2018. The airlines currently serves more than 99 destinations in the
United States and ten additional countries. It has planned to start its functions in Hawaii in 2018
or 2018 and the routes will be decided at a later stage. The company operates on Boeing 737
jetliner models and has become the biggest user of the given airline aircrafts.
The company has won the best company to work in for several years and has created a
low fire opportunity for the different customers which has increased its market share extensively
and also enabled the company to earn its revenue base.
The following Projections can be stated for the company:
 Entering into new markets- The airline company can enter into the South East Asian
markets which reflect potential growth opportunities.
 To become the world’s most profitable airlines by increasing the area of its operations.
 To ensure that it becomes the best place to work in by engaging in suitable employee
practices.

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Table of Contents
Company description.......................................................................................................................4
Products/services.........................................................................................................................4
The user benefits..........................................................................................................................4
Evidence of their acceptance by customers.................................................................................4
Management qualifications..........................................................................................................5
Major accomplishments...............................................................................................................5
Uses for capital required..............................................................................................................6
Investor benefits...........................................................................................................................6
Market size...................................................................................................................................6
Growth rate..................................................................................................................................7
Company's market niche..............................................................................................................7
Recent history & successes..........................................................................................................8
Strategic focus and plan...................................................................................................................8
Missions.......................................................................................................................................8
Core competency and Sustainable advantage..............................................................................8
References......................................................................................................................................10

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Company description
Products/services
The primary product as offered by the Southwest Airline Company is air transportation to
the passengers in the United States (Southwest Airlines – Airline Tickets, Flights, and Airfares,
2018). The company has begun operations outside the domain of the United States as well. The
company offers low cost airline packages and the main services provided along with the flight
are snack packs, soft drinks and Wi-Fi connectivity.
The user benefits
The following benefits are provided to the different users:
 Early Bird checking- The different passengers can conduct in an early bird check in
which will allow the different customers to check in at their convenience.
 Business Select- The business select option will allow the different customers to select
the business compartment as per their convenience and need.
 Mobile check in- The customers and passengers can log in through the mobile check in as
well.
 Self-tagging- The customers can avail the option of self-tagging through which they can
tag their own baggage (Hill, Jones & Schilling, 2014).
 Express baggage- The airlines also provides express delivery options.

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Evidence of their acceptance by customers
According to Southwest Airlines Reviews and Flights - TripAdvisor. (2018), the
customers are greatly fond of the given airlines company. The reviews reflect that the airlines
provides optimum services even at a low cost. The customers have praised the staff, the leg
space, and the timings of the flights, reliability, boarding management and the choice of seating.
Hence, the airlines have received huge acceptance from the customers with regard to the
different customers.
Management qualifications
The qualification of the different board of directors should be that they must have the
possession of high professional ethics, integrity and values (Hitt & Duane Ireland, 2017). They
must have practical wisdom, mature judgment and be committed to the long term interests of the
different stakeholders like the employees, customers and the shareholders.
The directors need to be able to devote enough time and serve the organization for a
longer time frame (Rothaermel, 2015). They need to provide long term advice to the Chairman
so that suitable decisions are made for the long term welfare of the organization. The decisions
taken them need to ensure sound judgment and investment for the sustainable future of the
organization.
Major accomplishments
The Southwest Airlines Company was labelled as the 2015 airline of the year which was
awarded to it by the Air Transport World which is a Penton company. The main reason the
company won the given award was due to its extraordinary and consistent service standards,

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financial performance and safety ensured (Robson, 2015). The environmental and corporate
responsibility is also well provided by the firm and it was able to receive its return on invested
capital which was 15%. Out of the different years the firm has operated in, it has achieved
approximately 41 consecutive years of profitability
Uses for capital required
The company can make use of the capital required in the following manner:
 Expand its operations in the emerging markets of the South east Asian companies
 Improve the standard of operations (Epstein, 2018).
 Provide an engaging environment for the different customers.
Investor benefits
The investors shall benefit in the following manner:
 Greater amount of profits due to the increased revenue
 Greater goodwill and return for investment
 Better involvement due to transparent operations
Market size
The passenger and air transportation market is a thriving industry and among the different
companies operating in the given industry, American Airlines is the largest one based on sales
which has reached more than 40 billion United States Dollars. The different players present in
the given industry are the Delta Airlines, United Airlines, American Airlines and the Southwest
Airlines.

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Figure 1: The market share of Southwest Airlines (Source: 2018*, 2018).
Growth rate
The company has been growing considerably and has achieved a tremendous rate of
1.25% with respect to the revenue and a rate of 4.38% as over the period of 5 years. The
company has reported continuous profits throughout the years and this has been an area of
consideration with respect to the awards being received by it.
Company's market niche
The primary niche segment of the company can be stated to be the low cost services that
the company it offers to the different customers. The airline operates on a no frill concept

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whereby its main motive is to provide the different customers with an on time and standardized
services.
Recent history & successes.
The airline began its operations in 1967 when founded by Herbert Kelleher and
incorporated as Air Southwest Company. It has maintained considerable service throughout the
years and has been named one of the best airlines around the globe.
Strategic focus and plan
Missions
Non-financial
 To expand the operations of the company in other emerging markets like that of South
East Asia,
 To ensure the incorporation of sustainable business practices
 To ensure proper employee engagement
Financial
 To achieve a Return on Investment of 18% in 2018
 To achieve a net income of 4000$ in millions in the year 2018 (Annual Reports, 2018).
Core competency and Sustainable advantage
Leveraging a single plan

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The company does not offer a wide range of service and flight options and instead just
makes use of a single plane which saves maintenance costs and hence, the low price solutions to
the different consumers becomes possible.
Point to Point
Most of the destinations of the chosen airline brand tend to provide the customer with a
direct destination without any stoppages. The company has achieved a 78% on time performance
policy.
Customer service
The airlines offers a single coach cabin which is quite roomier than the other airlines
present. The company does offer snacks and complimentary drinks but this less clutter allows
them to clean and stock the plane easily.
No hidden charges
Southwest Airlines has kept the costs down with efficient fuel management system and
minimal ticket pricing.
Satisfied Employees
The employees of the company are completely satisfied and their management team is
quite efficient and strong.

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References
2018*, D. (2018). U.S. domestic market share of leading airlines 2018 | Statistic. [online]
Statista. Available at: https://www.statista.com/statistics/250577/domestic-market-share-
of-leading-us-airlines/ [Accessed 2 Jul. 2018].
Annual Reports. (2018). Retrieved from http://investors.southwest.com/financials/company-
reports/annual-reports
Epstein, M. J. (2018). Making sustainability work: Best practices in managing and measuring
corporate social, environmental and economic impacts. Routledge.
Hill, C. W., Jones, G. R., & Schilling, M. A. (2014). Strategic management: theory: an integrated
approach. Cengage Learning.
Hitt, M., & Duane Ireland, R. (2017). The intersection of entrepreneurship and strategic
management research. The Blackwell handbook of entrepreneurship, 45-63.
Robson, W. (2015). Strategic management and information systems. Pearson Higher Ed.
Rothaermel, F. T. (2015). Strategic management. McGraw-Hill Education.
Southwest Airlines – Airline Tickets, Flights, and Airfares. (2018). Retrieved from
https://www.southwest.com/
Southwest Airlines Reviews and Flights - TripAdvisor. (2018). Retrieved from
https://www.tripadvisor.in/Airline_Review-d8729156-Reviews-Southwest-Airlines