The Southwest Airlines

Brief Background

The U.S department of transport 1995 classified its passenger airlines into three categories based on the annual revenue generated. These are a "major carrier" airline that could generate up to $1 billion annually, a "national carrier" that could range between $ 100 million and $1 billion annually, and a "regional and commuter airline" that could generate less than $100 million annually (Pg, 480). Before this, the Civil Aeronautics Board (CAB) board was responsible for regulating fare, routes, and company mergers, and before any change was made, CAB approval was required. However, the CAB operated on biasedness in that they awarded highly profitable and semi-exclusive routes to individual airlines and then left the remaining to the public interests. It suppressed the price competition, and some airlines increased their fare because they were the only ones operating on those routes. However, in 1978 a new airline deregulation act was passed, allowing airlines to set their fare and enter any route they wished without CAB approval (Pg, 481). It led to the dissolving of CAB in 1985. It led to a significant career turning their attention to serving nonstop on the long-haul, densely populated routes.

Besides, there were numerous challenges. Among the other major careers, only Southwest Airlines proved to be effective in navigating through the harsh economic air travel and avoiding the financial calamity in the 1990s. The major thing that made them thrive in the market was that they had a lower operational cost than other careers. Also, unlike other airlines, they have opted to keep their business model simply because they do not fly everywhere. Their operating system is point-to-point, and they have the simplest pricing structure. Besides, they chose to use only one type of plane: the Boeing 737, which is easy to maintain, and the cost of training is also reduced and increases efficiency in crews and flight schedules. This lower operational cost made them attract a high number of customers. From 1990 to 1994, they doubled their operational revenues, making them expand further, and other airlines were triggered to adapt their strategy (Pg 486).

Furthermore, their corporate mission statement states, "The mission of Southwest Airlines is a dedication to the highest quality of Customer Service delivered with a sense of warmth, friendliness, individual pride, and Company Spirit." In addition to their vision, "to become the world's most loved, most flown, and most profitable airline." It reflects their customer friendliness and branding to their competitors (EVANS, 2019). It has reflected their long-term strategic plan for global operation, making them withstand the harsh financial calamities.

Problem Statement

Since its establishment in 1967 as a low-cost carrier operator, Southwest Airlines has been the largest domestic carrier by volume. As the firm continues to grow and the ongoing integration of AirTran operations, they need to maintain the low-cost structure to continue being profitable and competitive. Despite adding the larger and more crowded destination to the Southwest airlines route, they need to retain their customer satisfaction needs to retain their market shares. To remain profitable, they have to convert AirTran to a point-to-point strategy because that adds unnecessary complexity to their operation...…of AirTran was enacted, it allowed the Southwest airline to move to more congested and more expensive airports. They will have to increase their prices or carrying capacity to remain profitable. This will work better because the crowded airports have a fixed cost regardless of the plain size; if they start operating on larger aircraft will make them more profitable if the demand can sustain it. The only risk they will be facing is filling the larger planes to help them remain sustainable.

Besides, because larger airplanes allow flexibility and flow on the routes over water, they can add other international destinations. This will guarantee them a low-cost structure enabling them to grow. Furthermore, AirTran already has some access to these markets, giving Southwest airlines a competitive advantage. On the other side, since fuel has been a significant contributor to their operational costs, they could reduce their dependence on fuel. They could look for more fuel-efficient airplanes like the Boeing 737 MAX and the Next-Generation 737. Using these planes will make them get rid of the Boeing 717s, which are essentially unnecessary based on their operating system. When they continue investing in their flights, they will remain at the forefront of this development.

In conclusion, Southwest Airlines needs to integrate AirTran into its operational method to create more room for growth now and in the coming years. Furthermore, with the rapid development and innovation of technology, adopting new fuel-efficient technologies will help them increase the capacity of some long-haul flights. It will enable Southwest Airlines to continue to lead the airline industry even in…