their employees will treat customers right”. This has been a very powerful competitive weapon for Southwest airline.
Technology: Southwest was the first major airline to introduce ticketless travel (eliminating the need to print and process paper tickets); by 2007 ticketless travel accounted for more than 95 percent of all ticket sales (Thompson, 2016).
Weaknesses:
Baggage transfer: Southwest did not provide passengers with bagged transfer services to other carrier’s passengers with checked baggage who were connecting to other carriers to reach their destination. Customer connecting to flights are responsible for picking up their luggage at Southwest’s baggage claim and then getting it to the check in facilities of the connecting carriers
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It will help Southwest airline to increase its customer base and profits.
Improve Customer Satiation: By offering first class section and keeping low fare policy, Southwest airline should have an opportunity to increase revenue and sissify customer need and wants.
Technology: Southwest airline must invest in technology and new software to decrease the time require to generate optimal crew schedules and help improve on time performance to attract more customers.
Threats:
Competition: Competition within the airline industry is intense and highly unpredictable. Southwest compete with other airlines on prices, routes, customer service and schedule. Furthermore, Southwest top competitors are Spirit airline, American airlines, Delta air and United airlines. Finally, in 2016 Southwest was regarded as the best operator among U.S. airlines compared with its domestic rivals. (Thompson, 2016).
Fuel price: The cost of fuel can be extremely and unpredictable, and even a small change in market fuel prices can significantly affect profitability (Investor Southwest.com). According to Southwest annual report, jet fuel and oil represented approximately 22 percent of the company’s operating expenses for
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Current ratio formula = current assets /current liabilities (Thompson, 2016). For instance, the current ratio shows we if the company has enough liquidity to pay what it owes. For example, higher current ratios tend to be better than low current ratios.
Analysis: According to the table # 1, Southwest current ratio is under 1 for the last 4 years. Southwest must increase its working capital to eliminate any liquidity issues. Quik Ratio: is an indicator of a company’s short-term liquidity. The quick ratio measures a company’s ability to meet its short term obligations with its most liquid assets.
Quick ratio formula = current assets – Inventories / current liabilities
Analysis: According to table # 1, Quick ratio for the last 4 years of Southwest airline is under 1. This low quick ratio is an indicator of Southwest is over leverage ? struggling to maintain or grow sales and collecting receivables too