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Currently, although it seems as though Southwest Airlines is at a better position than all other Air carriers, some factors are threatening their position. Not only is the competition from other carriers at its highest, the previously low-cost structure that gave Southwest an advantage over the rest is on the rise. The Airline is facing upstarts such as AirTran and JetBlue, who have adopted Southwest’s model and gone further to add amenities such as free TV and satellite radio at each seat (Singh, 2012). These factors, coupled up with the narrowing gap in costs between them and other major airlines that have employed aggressive cost cutting measures and can make improvements to their strategies. While Southwest faces an already lean cost structure, that’s hard to improve makes it apparent that the reign of the most profitable airlines might be coming to an end. [Need an essay writing service? Find help here.]
Southwest adopted a minimalist approach to its pricing strategy (Hooley et.al, 2014). Southwest’s planes flew from “point-to-point” rather than using the “hub-and-spoke” pattern used by the major airlines in the industry. [“Write my essay for me?” Get help here.]It enabled improved flexibility as planes operate strictly based on demand. Southwest served no meals, only snacks and did not charge passengers a fee to change same-fare tickets had no assigned seats and no electronic entertainment. The airline did not offer a retirement plan; rather, it offered its employees a profit-sharing plan and for years enjoyed fuel prices far below those paid by the rest of the industry through some smartly negotiated fuel-hedging contracts. These strategies reduced costs to levels much lower than that of the competitors and efficiently ensured the airline stuck to its low pricing strategy.[“Write my essay for me?” Get help here.]
Hooley, G. J., Saunders, J. A., & Piercy, N. (2014). Marketing strategy and competitive positioning. Harlow, England: Prentice Hall Financial Times.
Singh, P. D., Copenhagen Business School. CBS., & Handelshøjskolen I København. (2012). The competitive advantage of Southwest Airlines: A resource-based perspective.