External Audit of Southwest Airlines Co.
Opportunities of Southwest Airlines Co
1. There is an expected world tourism growth of up to 4.3% on an annual scale hence the airline must take advantage of this opportunity for growth as well.
2. The accessibility of the Mexico, Cancun and the Caribbean region following the AirTrans merger bring the international opportunities that Southwest Airline can take advantage of.
3. The ATA domestic code-sharing treaty also breaks down barriers and bureaucracies for ease of trade.
4. The repeal of the Wright Amendment also works for the good of the airline in its operations.
5. With the down cycle of the economy since 2009, there has increased the potential for profit for this airline since people have become more cost sensitive than before.
6. The lower interest rates in the economy than before also works for the advantage of the airline
7. There has been a rise in the passenger revenues by 7.3% from 2010 hence presenting a vibrant market for the airline.
8. There has been an oil price drop from $150 a barrel to less than $100 a barrel hence lowering the cost of operations.
9. The regional jets have changed significantly the short distance markets that were left by the major airlines...
There has been generally an improved customer satisfaction and value in the industry (Moran D, 2018).
Threats to Southwest Airlines Co
1. There has been an increased government regulation due to security reasons hence expensive to operate in this industry.
2. There has been persistent failure to meet the expectations of the stakeholders.
3. The global security threats like the terrorism has shrunk some routes and cost the airline money invested in curbing insecurity.
4. The competition has been stiff in this market.
5. The price of petroleum is very volatile and depends on the political atmosphere in various regions.
6. The high inflation and high rates of unemployment has left many unable to travel or to fly.
7. The several joint ventures have dented the image of the airlines.
8. There has been a growing trend of labor cost hence increase in operational costs.
9. The Southwest airline also moved their flights from non-profitable routes to profitable routes hence diminishing their brand presence in those routes.
10. Competitors have targeted the airline by introducing lower pricing (CAPA, 2014).
Porter’s…
