Essays on Business Description and Aspects of Southwest Airlines Case Study

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The paper "Business Description and Aspects of Southwest Airlines" is a perfect example of a business case study. This report presents the findings of research about Southwest Airlines. The report contains details about various aspects of the company and data that summarises the financial performance of the company in the recent past. The report is divided into several sections that cover the following information: history, services and the management structure of the company. Also contained in the report is information about the financial performance of the company. Summary Business Description of Southwest Airlines History of Southwest Airlines Southwest Airlines started operating back in 1971 as a small airline that had a small fleet of only three Boeing 737 aircraft (Southwest Airlines Co.

2017, p. 1). The company started its operations by serving the following three cities in Texas: Dallas, San Antonio and Texas (Avstop. com, 2015). Since its inception, the company has managed to grow and attain leadership status in the industry in which it operates. For example, Southwest Airlines was the first carrier to offer the miles programme (Avstop. com, 2015). The company used the miles programme to reward its frequent customers with points.

The customers would then redeem the points at later dates in the form of reduced prices or even free tickets. Currently, the company has 723 aircraft and serves 101 destinations that are in 40 different states (Southwest Airlines Co. 2017, p. 1). Summary of performance The company has managed to overcome industry-wide challenges and post profits on several occasions (Hill & Jones 2009, p. 105). For example, in the wake of the 11 September 2001 attacks, the global aviation industry was affected by a slump in demand for travel services (Hill & Jones 2009, p.

105). Many airlines posted losses in their annual financial reports for the years that followed (Hill & Jones 2009, p. 105). However, it is observed that Southwest Airlines managed to post profits between 2002 and 2005 (Hill & Jones 2009, p. 105). In this period, the company posted an accumulated Return on Invested Capital (ROIC) of 5.8% when many other airlines in the industry posted losses and relatively fewer returns on invested capital (Hill & Jones 2009, p.

105). Use of the low-cost carrier model Southwest Airlines is one of the pioneers of the low-cost carrier (LCC) model (Wang 2005, p. 16). The company was founded on the principle that if it could charge its customers up to 30% less in fares and keep its costs of operations down, it could break even and remain profitable (Lauer 2009, p. 14). Currently, the company still operates on the LCC model by using a fleet that is composed of Boeing 737 planes only, not offering in-flight meals and speeding up the time that its planes take while at airports (Lauer 2009, p.

17). The company uses these strategies to optimise its operations, reduce its overheads and maximise the demand for its services (Cento 2008, p. ix). Summary of Business Aspects of Southwest Airlines Products Southwest Airlines operates short- and long-haul domestic flights between various cities in the United States by relying on the point-to-point model as opposed to the hub-and-spoke model of operations (Southwest Airlines Co. 2017, p. 3). In 2014, the company started international flight services (Southwest Airlines Co. 2017, p. 3).

Its international flight services now cover three destinations: Mexico, Liberia and Costa Rica. The company operates direct flights to these countries from Los Angeles. The international service of the company has been growing considerably. For example, about USD 226 million of the revenue of the company back in 2014 was derived from its international service (Southwest Airlines Co. 2017, p. 3). The revenue from international service grew to USD 287 million in 2015 and to USD 338 million in 2016 (Southwest Airlines Co. 2017, p. 3).

References

Avstop.com 2015, ‘History of Southwest Airlines,’ viewed 14 June 2017, .

Cento, A 2008, The airline industry: Challenges in the 21st century, Springer, Heidelberg.

Gallo, Carmine 2014, ‘Southwest Airlines motivates its employees with a purpose bigger than a pay check,’ Forbes, 21 January, viewed 14th June 2017, .

Hill, C & Jones, G 2009, Strategic management theory: an integrated approach, Cengage, Mason.

Lauer, C 2010, Southwest Airlines, ABC-CLIO, New York.

Southwest Airlines 2017, Southwest airlines executives and leadership, viewed 14 June 2017, .

Southwest Airlines Co. 2017, 2016 annual report to shareholders, viewed 14 June 2017, .

Wang, C 2005, The effect of a low-cost carrier in the airline industry (Master’s thesis, North-western University, Evanston, Illinois), viewed 14 June 2017, .

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