Continental vs. Southwest Airlines: Full-Service vs. Low-Cost
This paper examines the marketing strategy of Continental Airlines as a full-service carrier in contrast to low-fare discount carriers such as Southwest Airlines. It provides a company overview of Continental, including its pending merger with United Airlines, and identifies the airline's primary target market and competitive differentiators. The paper analyzes Continental's competitors — both full-service carriers like American Airlines and Delta, and low-cost carriers like Southwest, JetBlue, and AirTran — before describing the airline's products, marketing budget, pricing strategy, and a proposed mobile-based marketing campaign targeting Hispanic consumers in the New York and Houston metro areas.
- Introduction: Full-service vs. discount airline travel overview
- Company Overview: Continental Airlines history, hubs, and merger
- Target Market and Competitive Differentiators: Full-service perks targeting the flying public
- Competitors and Market Position: Full-service and low-cost airline rivals analyzed
- Product and Service Offerings: Passenger reviews and service quality described
- Marketing Budget and Mobile Campaign Strategy: Mobile ads five to ten times more effective than online
- Pricing Strategy and Implementation Plan: Buy-one-get-one campaign targeting Hispanic travelers
✍️ How to write this paper — guide, tools & examples ▾
What makes this paper effective
- Integrates primary source material — including SEC filings, corporate Web sites, and consumer forum quotes — to ground marketing claims in real evidence.
- Structures the analysis around a standard marketing plan framework (target market, competitors, product, budget, location, pricing), making the argument easy to follow.
- Uses a concrete case study (the "Volver por un rato" mobile campaign) to quantify the effectiveness of an unconventional marketing channel with specific comparative metrics.
Key academic technique demonstrated
The paper demonstrates applied comparative analysis by placing Continental's full-service value proposition alongside the low-cost model of competitors. Rather than describing each airline in isolation, it consistently returns to the contrast between service differentiation and price competition, showing how strategic positioning drives marketing decisions. This technique — using a single competitor as a foil to clarify strategic identity — is an effective method in business and marketing case analyses.
Structure breakdown
The paper opens with a broad framing of transportation choices before narrowing to air travel and the full-service vs. discount dichotomy. It then moves through eight numbered sections that mirror a formal marketing plan: company background, executive summary, target market, competitors, product description, budget, location, and pricing. A concluding implementation section ties the plan together. An appendix supplies supporting fleet and partner data.
Introduction
Today, people have a wide range of transportation alternatives available to them, including personal conveyances, buses, trains, and airplanes. Within these different modes of transportation, a further array of choices exists — such as a luxury automobile versus a compact car, or first-class accommodations on trains compared to coach. With respect to air travel, passengers also face these types of choices, as well as the decision of whether to fly on a full-service airline or a discount fare carrier.
To determine what types of passengers are targeted by marketers at a full-service airline, this paper provides a review of the relevant literature concerning flying on Continental Airlines — a full-service airline — as opposed to a low-fare discount carrier such as Southwest Airlines. The paper concludes with a summary and implementation section.
Company Overview
Continental Airlines (hereinafter alternatively "Continental" or "the company") was operating as an independent airline while in the process of merging with United Airlines, a process expected to be completed within approximately 12 to 18 months pending regulatory approval. According to the company's corporate website, the merger "brings together two of the world's best airlines to create the new United Airlines. Continental and United are working to align key customer services, marketing activities and airport processes, and we expect to complete our merger integration within 12 to 18 months" (About us, 2011, para. 2).
The company maintained headquarters in Chicago and was established in 1934 (About us, 2011). Continental is a global air carrier with hubs in Chicago, Cleveland, Denver, Guam, Houston, Los Angeles, New York, San Francisco, Tokyo, and Washington, D.C., completing almost 6,000 flights every day to more than 370 destinations around the world (About us, 2011). In addition, Continental — along with its merger partner, United — is a member of the Star Alliance, which offers passengers extensive connecting flights to other international destinations (About us, 2011). The company employed almost 87,000 people, broken down as follows: Airport Operations and Cargo (25,057), Food Services/Chelsea (2,043), Continental Micronesia (1,224), Customer Contact Centers (3,475), Flight Operations (9,784), Inflight (21,024), International (3,616), Management/Admin (11,963), and Technical Operations (8,601), for a total of 86,787 employees (About us, 2011).
Target Market and Competitive Differentiators
The general target market for Continental is the entire flying public, as well as mail services, with relatively competitive pricing. However, the company has primarily focused on differentiating itself as a full-service carrier that provides travelers with far more than they can expect from budget carriers. In its promotional material concerning the pending merger with United, Continental emphasized that "the new United will offer customers an enhanced travel experience, combining the best products and services each carrier has to offer. The airline will be focused on being the airline customers want to fly, the airline employees want to work for, and the airline shareholders want to invest in" (The world's leading airline, 2011, para. 3).
Key attributes distinguishing Continental's full service from low-cost providers include the following:
A. The world's most comprehensive global route network, including world-class international gateways to Asia, Europe, Latin America, Africa, and the Middle East, with non-stop or one-stop service from virtually anywhere in the United States.
B. The most modern and fuel-efficient fleet (when adjusted for cabin size) and the best new aircraft order book among U.S. network carriers.
C. An industry-leading frequent flyer program providing more opportunities to earn and redeem miles worldwide.
D. Optimal hub locations in ten cities, including hubs in the four largest cities in the United States (The world's leading airline, 2011).
In addition, Continental continued to provide preferred customers with perquisites such as its "Member Lounges" and United's "Red Carpet Club," where guests receive free Wi-Fi service as well as free snacks and alcoholic and non-alcoholic beverages. The company was also revamping its frequent flyer program to combine both airlines' offerings as a further draw (The world's leading airline, 2011). Elite customers were to receive reciprocal seating and upgrade benefits beginning in October 2010 (The world's leading airline, 2011, para. 5).
References
About us. (2011). Continental Airlines. Retrieved from
Butcher, D. (2009, October 28). Mobile Marketer. Retrieved from
Continental advertising. (2011). Continental Airlines. Retrieved from
Flouris, T. & Walker, T. J. (2005, March). Financial performance of low-cost and full-service airlines in times of crisis. Canadian Journal of Administrative Sciences, 22(1), 3–21.
The world's leading airline. (2011). Continental Airlines. Retrieved from
Company profile. (2011). Yahoo! Finance. Retrieved from
Form 10-Q quarterly report. (2010, October 21). EDGAR Online. Retrieved from
Appendix A: Key Statistics
Frequent Flyer Programs: Mileage Plus (United) and OnePass (Continental).
United Mainline Fleet: Total operating mainline fleet of 359 aircraft, including narrow-body Airbus A320 family (152) and Boeing 757-200 (96), and wide-body Boeing 747-400 (24), Boeing 767-300 (35), and Boeing 777-200 (52). Total operating United Express regional fleet of 295 aircraft, including Canadair CRJ 200/700 (194), Embraer 145/170 (92), and Embraer EMB-120 turboprops (9) — includes only aircraft operated under capacity purchase agreements.
Continental Mainline Fleet: Total operating fleet of 348 aircraft, including narrow-body Boeing 737 (500/700/800/900) series (238) and Boeing 757 (200/300) (62), and wide-body Boeing 767 (200/400) (26) and Boeing 777-200ER (22). Total operating Continental regional fleet of 252 aircraft, including Embraer 145 regional jets (221), Bombardier Q400 turboprops (15), and Bombardier Q200 turboprops (16) — includes only aircraft operated under capacity purchase agreements.
Wholly Owned Subsidiary: Continental Micronesia, Inc. (CMI).
United Operating Brands: United Express®, p.s.℠, United Cargo℠, United Services.
Continental Operating Brands: Continental Express, Continental Connection, Continental Cargo.
Other Partners: Aer Lingus, Emirates, Gulfstream International Airlines, Hawaiian Airlines, Island Air, Jet Airways, Qatar Airways, TACA Group (United); Aeromar, Amtrak, Cape Air, Copa Airlines, Copa Airlines Colombia, Emirates, EVA Air, Hawaiian Airlines, Island Air, Kingfisher, Virgin Atlantic (Continental).
United Express Contracted Regional Carriers: Atlantic Southeast Airlines, Colgan Air, ExpressJet Airlines, GoJet Airlines, Mesa Airlines, Shuttle America, SkyWest Airlines, Trans States Airlines.
Continental Express: ExpressJet, Chautauqua Airlines.
Continental Connection: Cape Air, Colgan Air, CommutAir, Gulfstream International Airlines.
Always verify citation format against your institution’s current style guide requirements.