Sw Airlines

Southwest Airlines Case Study

Problem – Southwest Airlines main competition Braniff, is giving a 60 day half price sale (50% off to $13) on Southwest’s biggest money making route: Dallas to Hobby.

Issues:

How does Southwest respond to this half price shift by Braniff?

How can Southwest create a package affordable for both the customer and Southwest?

Brandiff had 51.5% (443 passengers daily), TI 7.3% (62 passengers daily) and Southwest 41.2 %( 354 passengers daily) in regards to the Dallas to Houston market.

Analysis of the 4 P’s:

Product(Service):

1) Southwest Airlines is a Texas based airline flying the following routes: Dallas Ft. Worth Airport, to Hobby Airport in Houston, and from Dallas Ft. Worth Airport to San Antonio. Southwest owned three planes and used two of them for the Dallas-Ft. Worth to Houston’s Hobby Airport run, and one for the Dallas Ft. Worth San Antonio run.

2) SW airline service is not expensive, easier to schedule and more enticing because you’re being catered by attractive, young stewardesses (also with the highest FAA test scores). It’s exactly what business men want; to save money, something that’s not a pain in neck to schedule and the prospect of flirting with beautiful women on business trips. Even if the business men don’t schedule it themselves and the company pays for the trip, the “young, fun, sexy, love-affair” will still attract them to find a way to travel with SW.

To become a part of the airline industry, a company needs to have large capital reserves. Potential entrants are the major airline and regional airline market segment. Southwest Airlines chose regional airline market segment at that time

Price:

1) Southwest can afford a low price to customers because it is a low-cost carrier. In order to maintain this, Southwest airlines use only one aircraft type, the Boeing 737. This minimized costs for the airline by simplifying training, automating repairs and maintenance and improving ground...