Rough Road Ahead: Marketing and Economy Southwest Airlines

David Salinas

6/29/13

Rough Road Ahead: Marketing and Economy

Southwest Airlines

Researching Southwest airlines the same word kept coming up to describe them: Scrappy. Two definitions came up for the word: made up of odds and ends, and fond of fighting or competing. That sounds like the perfect way to describe them actually. It is hard to imagine how this little company, starting with just four planes flying to three Texas cities, could become this impressively modern company flying 544 planes to 69 cities! (Mouawad, 2010) They became the model of study at every major business college in America. Unfortunately for them, the 9/11 tragedy caused consumers to cut back on spending. Southwest has to come up with unique tactics and strategies to boost their dwindling profits without raising prices.

Southwest has tried many different innovations to boost sales. To keep costs low there is no international flights, no first class seating or V.I.P. clubs, no assigned seating, and no snacks or beverage services. (Reed, 2006) They have added things to their flights they never had before and are hoping will pay off. For example, CEO Gary Kelly outlines a few changes:

Other fronts where Southwest seems to be morphing into a more conventional carrier:

•Amenities. Notoriously bare-bones Southwest is considering adding some type of in-flight entertainment technology, Kelly has said.

•Code sharing. It is moving quickly to develop its fledging partnership with ATA Airlines, which it helped rescue from Chapter 11 bankruptcy. Now, Southwest frequent fliers can claim free trips to places the airline itself doesn't go, such as Hawaii and New York City.

•Fleet diversification. Southwest's efficiency is built largely on its all-Boeing 737 fleet. Kelly says that he's "intrigued" by the possibility of flying 100-seat jets in markets with too little demand to support 737 service. He says nothing is currently in the works.

•International flying. In 2008, when the new computer...