With high debt ratios riding the balance sheets of many companies, the downturn of passenger travel has many of even the major airlines scrambling for survival. That is why it is so important to have a strategy for the upcoming problems. After the airlines deregulated, they let Southwest fly outside Texas, which led to gradual expansion into domestic markets. Southwest Airlines also has one of the better in the industry. The company is in the process of replacing customer service back-office equipment at airports including at its headquarters in Dallas.
It sees the potential market for low cost airline. Southwest Airlines has a track record for being very forward thinking, boosted by a flexible business model that supports rapid change. Jet Blue Airways Corporation is a low-fare, low-cost passenger airline that serves point-to-point routes between 22 destinations in 11 states and Puerto Rico. This is unique within the industry and among all large companies. History: Southwest started in 1971, after going through court battles caused by competitors that.
The base was the attractiveness of the price of tickets. Differentiation exists in customer service and the locations in which an airline flies. Customers — Customers include mostly individual travelers and organizations. This has allowed airlines to bypass travel agent commissions, nearly eliminate wasteful paperwork, and reduce airline staffs. Labor is the key to these companies as their costs are accounted for on average of 40% going to labor. Founded in 1971, the mission of the company was simple — make it less expensive to fly than to drive between two points. For starters, there is no assigned seating; check-in is on a first come first serve basis.
Southwest Airlines began its service in 1971. These weaknesses make Southwest competitively vulnerable in that the competition satisfies everyone of the needs air passengers are lacking with Southwest. Airlines need to offer routes between markets that are desired and utilized by customers. Nearly all of the former Big 6 major airlines have filed for bankruptcy or looked for government assistance. Southwest is the only company to ever hold the Triple Crown for annual performance.
To be attractive for most equity investors, an airline must grow its equity over time. The key is in proper strategic management of their assets, cash flow, labor, and scheduling. As of February 2004, Jet Blue operates 108 weekday flights between the Northeast and Florida, 66 weekday flights between the East Coast and western United States and 48 weekday short-haul flights. They achieved this by making jokes, playing games in the terminals, and offering free alcoholic beverages. What should their business and operations strategy be for the future? But Southwest is also innovative and nimble, and willing to go against the grain. There are many new technology initiatives being undertaken currently and some are in the pipeline.
Key success factors include safe deliveries and an excellent reputation. Southwest also bucks the traditional hub-and-spoke system and offers only point-to-point service; it chooses to fly to smaller airports that have lower gate fees and less congestion, which speeds aircraft turnaround. Then you can allow Employees to be themselves and make decisions about Customer service based on common sense and their natural inclinations. The table below shows that even though Southwest is the most heavily unionized airline, at approximately 80%, that contract negotiations between the unions and Southwest are much shorter in duration than of the other major carriers. Keeping the end in mind, Southwest recently AirTran, which has and expand its services. Conduct a strategic planning analysis of Kulula.
Labor-management relations including strikes and threatened strikes are one example of a driver of these effects. Over time Southwest has managed to keep to these simple key success factors and has seen sustained growth over its 45-year history. Morale is measured using proxies since the original morale model is complex and requires information not currently available for the airlines being examined. Establishing and maintaining the function of control is crucial. Southwest has always been able to quickly seize any strategic opportunities whenever they arise.
The company could penetrate certain domestic markets where it is lacking a presence. Consolidation of the industry often follows. Airtran is another up and coming low cost airline that is looking to be yet another competitive force in the near future. Customers who use credit cards are eligible for online transactions, and today Southwest. Following 911, it has been the only airline to report profits every quarter, and one of the few airlines that has had no layoffs amid a travel slump created by slow economy and the threat of terrorism. However, something else may be involved. They choose to have those disadvantages, which will either make them or break them in the fight for competitive edge.
The challenge is to overcome this impediment so that the station can accommodate additional growth as planned. Most of its flights are short hauls averaging about 590 miles. Customer Service The Mission of Southwest Airlines The mission of Southwest Airlines is dedication to the highest quality of Customer Service delivered with a sense of warmth, friendliness, individual pride, and Company Spirit. Airline, Earnings before interest and taxes, Financial ratio 1680 Words 5 Pages 1. What challenges is Southwest facing in the future and how should they meet those challenges? To facilitate international growth, U.
The challenge is doing that without conceding the customer touch. Southwest Airlines started out as Air Southwest Co in 1967; serving only three local airport hubs in Texas. Despite the extreme success the 1990's brought to the airline industry, many companies have entered into a downward spiral. The airline plans to expand operations there, rapidly. People are not going to want to travel Southwest for long trips due to the huge baggage inconvenience. Also, the capital-intensive, labor-intensive, and energy-intensive nature of the industry can cause difficulties for new entrants.