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Southwest Airlines Executive Summary

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Southwest Airlines ranked #2 by the American Customer Satisfaction Index (ASCI) for 2017 (Vasel, 2017) and #1 in its segment according to the J.D. Power 2017 North American Airline Satisfaction Study (J.D. Power, 2017). In 2015, Southwest Airlines finished the year with a net income of $2.2 billion (Southwest Airlines, 2016). By analyzing the market and business data, we will explain the impact microeconomic principles have on the company’s sustainability. We will review the supply and demand for airline services examine price elasticity and production costs, and explore the overall market of the airline industry. Upon completing this review, we will make recommendations for Southwest Airlines to implement to continue its success and maintain, …show more content…

taking its first flight on June 18, 1971. The company originally serviced only three Texas cities – Houston, Dallas, and San Antonio. By the end of 1971, Southwest had flown 6,051 trips carrying 108,554 passengers on its four aircraft. (Southwest, 2017a). The company made their first quarterly profit in the history of the company in 1973 (Southwest, 2017b). By 1989 they were considered a major airline after surpassing the billion-dollar mark in revenue. Southwest has continued to be a pioneer of innovations in the airline industry. In 1972, Lamar Muse, President of Southwest, introduced a two-tier fare structure creating the “Pleasure Class,” which is one of the most important innovations in airline history (Southwest, 2017b). Southwest became the first major airline to offer Ticketless Travel in 1995 and to launch a website in 1996 (Southwest, 2017c). In 2009, Southwest became the first airline to utilize sky to satellite wi-fi connections. Beginning in 2013, passengers aboard Southwest flights can view on demand movies and tv shows as well as select live television channels. They were the first carrier to offer gate-to-gate connectivity. Southwest started service to a destination outside of the 48 contiguous U.S. states by providing service to Puerto Rico in 2013. Flights to the Bahamas, Jamaica, and Aruba in 2014 allowed Southwest to become an international airline. They recently launched a new airplane as well, the Boeing 737 MAX 8 (Southwest,

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Southwest Airlines is a major airline company that provides air transportation in the United States and nearby international markets. Founded in 1967 by Rolling King and Herb Kelleher and commenced service on June 18, 1971, with three aircrafts and 25 employees with flights as low as $20 one-way fares to Dallas, Houston, and San Antonio. Southwest has been ranked #8 in Fortune’s list of World’s Most Admired Companies for 23rd consecutive years. In its 47th year of service, Southwest Airlines continues to provide exceptional customer service delivered by more than 55,000 employees topping 115 million passengers annually. Southwest Airlines serves 100 destinations in the United States and operates international flights to Mexico, Latin America, and the Caribbean.

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The Airline Deregulation Act has significantly changed the airline industry for the better when it stopped allowing the government have control over it. Southwest Accidents In the last 18 years, there has been a total of two accidents involving an aircraft operated by Southwest

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The aviation industry is no stranger to Tech Innovations and Globalization having an effect on them. When Southwest began, it had to fight off various forms of these innovations in order to remain afloat without sacrificing the simplicity of design that the company valued. This company made an effort to remain true to itself despite outside influences raising questions of how it operated. When companies like American West showed up and reached the $1 billion revenue mark years before Southwest, the company didn’t change and stayed true to it’s niche and has remained profitable since by avoiding the debts associated with rapid expansion (Freiberg & Freiberg, 1996). Rather than having a complex computer ticketing system like many other carriers,

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Pay at Southwest is also enticing, with starting salary around 75k, and the ability to make more than 200k a year towards the end of your career. The schedule Southwest can provide would allow for a desirable work life balance, which also factors into the decision. Southwest has posted pilot minimums of 2,500 hours of total flight time, with at least 1,000 hours of flight time acting as the pilot in command of a turbine aircraft. You must also have a high school degree, first

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Key behind accomplishment of southwest is to accomplish low turnaround time

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