Case Study - Southwest Airlines: Price-Value Equation
Module 7 Case Study
Embry Riddle Aeronautical University
Southwest Airlines has been a model of admiration for the airline industry and businesses from around the world combined. Southwest Airlines is a rag to riches story that has had to fight for everything it has become. Before Southwest was able to take on its first passengers, they had to fight competitors in the court system for nearly three and a half years.
Southwest did not make its maiden voyage until 1971 – from a napkin to the airways with their runway in the Court system. When Texas Aeronautics Commission authorized Southwest to fly, their competitors ...view middle of the document...
Southwest also has a very good baggage services and policies.
2) Based on the article and your own knowledge has Southwest done a better job than competitors of meeting the needs of air travelers?
Each customer normally wants something different from each airline. Business travelers generally do not care as much about price and value convenience, the type of aircraft flown, the ease with which tickets can be changed, a great frequent flier program that has huge perks, a lush first class cabin and assigned seating, a sumptuous airline lounge with free drinks, and the assurance of on time arrivals. On the other hand, leisure travelers prefer low pricing, on time arrivals and of course no additional fees. Rather than fly from hub to spoke as its competition does, Southwest flies a bus route. Continually cycling planes through the route of carefully selected, high profit cities and using smaller less crowded airports within these cities when possible has not only contributed to its pricing success but has won the loyalty of leisure travelers who are not on a schedule and are not required to be highly productive during the airplane ride. In addition, the leisure traveler is less likely to mind being flown to a smaller airport farther outside of the destination city than a business traveler is. On time performance, enjoyed by both classes of travelers, is easily achieved by Southwest due in part to an internal policy. This policy...