Southwest Strategy Analysis

Since the day established, Southwest has been sticking to its strategy “Low cost, low fare, no frills”. The choice to be the overall low-cost provider enables Southwest to compete with rivals yet raises the mission to minimize the cost. Southwest has then given birth to certain objectives so as to achieve the stated mission.

The very first move of Southwest is the employment of Boeing 737s solely. This action helps simplify the maintenance training as well as boost the speed and proficiency of maintaining routines. Furthermore, a favorable price of [number] is offered for Southwest being the first to launch this product line.

Starting from 2001, Southwest alters all cloth seats into leathers seats according to an investigation’s conclusion about the durable and easier-to-maintain features despite the high initial cost.

Moreover, the advance in aircrafts by attaching vertical winglets on the wing tips of the majority of Southwest planes thereby produces the fall of lift drag, the steeper climbing, also the quicker higher-flight-level reaching. The longevity of those jets is prolonged, the maintenance cost is lessened. So is the fuel burn. The table below notices that the lowest maintenance cost of 1.22 in 2000 belongs to Southwest. Yet from 2005 onwards, Southwest has lost this position for Delta Airlines and the surprising new entry JetBlue Airways.

| Costs of maintenance incurred per Revenue Mile (in cents) |

| 2000 | 2005 | 2008 | 2009 |

American airlines | 1.90 | 1.42 | 1.72 | 1.88 |

Continental airlines | 1.42 | 1.18 | 1.26 | 1.37 |

Delta airlines | 1.41 | 1.10 | 1.08 | 1.28 |

JetBlue airways | | 0.68 | 0.86 | 0.98 |

Northwest airlines | 1.55 | 1.54 | 1.30 | 1.28 |

Southwest airlines | 1.22 | 1.17 | 1.45 | 1.43 |

United airline | 1.84 | 1.60 | 1.88 | 1.87 |

US airways | 2.30 | 1.50 | 1.94 | 1.90 |

Aiming to diminish the fuel cost, Southwest being the first mover in the engagement of fuel hedging plus derivative contracts to...