Southwest Airlines

1. Main Issues Analysed

Should Southwest airline acquire the slots and gates vacated at La Guardia terminal in New York City? This problem should be analyses in three different dimensions:

a. The Company culture/Values

One of Southwest airlines strengths was their low-fares, costumer oriented politic and fun employees. In Kelly words: “outstanding, passionate, caring, customer service combined with an efficient, simple, low-fare costumer experience provide with reliability and operating expertise.”” The service should be memorable and inexpensive to deliver”. They recruited people with “personality” for the airline. Employees capable of using good judgment to implement southwest´s policy. To captivated employees they gave good pay waves and the opportunity to participate in the company´s success through profit-sharing and stock ownership programs. According to the article “the organization was imbued with a sense of ownership.”

To keep such good staff the southwest airlines need to keep growing. But moving to an airport like La Guardia they could not be able to guaranty the same experience especial due to delays and this alone could harm the brand.

b. Uncertain demand/Competition

With 9/11 the demand was affected and the completion increase as legacy airlines adapt to the new to new reality and internet made easier for customers to compare fare and new low-cost carriers that have lower labour rates enter the market.

The Market is evolving and demanding more at a lower price. The southwest airlines already prove that the company can adapt and compromised some of its core values. This happened with “bags fly free” policy that became one of the biggest competitive advantages. So when fly to a new airport with different features than those where they normally fly they can evolve into a new and more sustainable company.

c. Fuel Cost

As fuel cost increase make more economical to park an aircraft than to operate it. Underutilization of aircraft is a...