Taking A Look At Southwest Airlines

Southwest Airlines began flight operations with three Boeing 737 aircraft in Texas in 1971 providing affordable flights between major Texas cities. When those routes became popular the airline realized that they could compete with legacy carriers by being an affordable alternative to ground travel. This focus led them to continue growing a network of short point to point routes. What they discovered was that by offering short shuttle type service between cities they could gain a competitive advantage by maximizing fleet utilization through short turnaround times on the ground rather than by flying longer routes (Gwynne, 2010).

In order to speedily turn aircraft around at the airports in their network, Southwest leveraged another advantage to

It all hinged on keeping down costs. Flying only one airframe has led to multiple efficiencies that directly contribute to the low cost structure. Maintenance, training, and infrastructure costs were kept at a minimum. Next the airline maximized the utilization of assets by scheduling short, point to point, routes and turning the aircraft around in a hurry. Southwest then filled those short flights as many times as possible creating a low price high volume structure that made them exceptionally competitive in the regional travel markets (Gwynne,

Many carriers including Southwest Airlines have adopted fuel hedging practices to varying degrees of success. Many of the airlines’ efforts, and of the aircraft manufacturers’, have been in the area of fuel efficiency of the aircraft. Winglets on the wingtips created aerodynamic efficiencies. New engines and composite materials have made newer aircraft lighter and more fuel efficient. Southwest also has modernized its fleet while still maintaining their commitment to the 737 airframe. According to planespotters.net the Southwest fleet currently consists of seven hundred thirteen 737s with the latest additions having been the 737-8 MAX version from Boeing. These planes offer greater efficiency and capacity without forcing Southwest to abandon the proven single airframe strategy. They also increase Southwest’s potential range making possible international flights or even longer domestic routes (DeCarlo, 2006). Another of Southwest’s strategies has been in merger and acquisition. A merger with AirTran in 2010 increased revenue and capacity. It also led to thirty-seven new destinations for Southwest and a foothold in Atlanta’s airport. AirTran had also been a low cost carrier in the image of Southwest which had been able to operate at lower costs than Southwest. Southwest’s years of success and growth mean that now it can defeat competitors through price wars or by simply buying them