Since 1987, Southwest has had the lowest ratio of complaints per passenger boarded.Дў3 History continued Southwest led the way with Internet innovations. It began in Texas flying between the triangle: Dallas, San Antonio, and Houston. Southwest Airlines began in 1971 by Herb Kelleher and Rollin King. Low airline carrier buying power Consumers Supplier Power Labor Jet Fuel Aircraft Manufacturers Telecommunications Business Travelers NetJetsДў1 Buyer/Supplier Power Buyer Power Supplier Power These threats come from outside the Airline Industry Automobiles Trains Buses Other factors to consider Cost Time Convenience High Startup costs Brand Name Recognition Frequent Flyer Miles Post-Entry Competition Southwest charging for internet useДЎ1 Competitive Factors Entry and Exit of Major Changes Competition SizeД®ntry into the market requires high capital Compete on small margins Growth rate that is seen as good is 2-3% Competition Size The largest seven airlines in US have more than 80% of market share 11 major airlinesД¬ompetitive Edge Fly as cheaply and quickly as possible with no mistakes Price of Plane Tickets No layovers and prefer point to point No lost luggage Discounts or specials Good Customer Service Market Segments Locate in cities that have steady flow of traffic Convenience of locationД©/11 Attacks devastated the airline industry Restrict air travel for the next four days String of layoffs started to occur 140,000 announced layoffs would take place Made Airlines restructure their business model $15 billion dollar bailout was approvedДЄttracting and Maintaining customers Satisfying new and potential passengers Managing its fleet Airplanes being fully utilized Managing its people Employees are happy and union is pleased Handling its finances Enough money is coming in from planesДЎ7 Industry Rivalry Competition High Deregulation Price Profits LowДЎ8 Threat of New Entrants Regional Carrier startups Barriers to Entry: Work and Business attitudes Labor UnionsДЄbout 80-85% of workers are part of union Several different ones: Pilots, Flight Attendants, and Machinists Cause high labor costs for airlinesДЇuel Efficient aircraft and fuels are being developed Technology development for lighter aircraft and fuel efficient engines Air Traffic Control System NextGen Updated tracking and better routesДЄirlines Forecasting and Algorithms Algorithms more accurate can have huge cost savings for companies Better forecasting allows customers to receive better price Life Cycle of an Aircraft Average for Top 6 airlines is 13 years Broadband to create Revenue Market to grow to $986 million dollars Ex.

Short Booms & Long Busts Investment Capital intensive Employment Largest Expense High VolumeДҐ Political Factors Government Regulation Deregulation SouthwestД¬ivil Aeronautics Act, 1938 Federal Aviation Act, 1958 Deregulation Airline Deregulation Act, 1978 Southwest Wright AmendmentД¦ Geographical Factors Location Size Tactical Dallas Large AreaД§ Social Factors Pollution caused by the airline industryДЄirline industry contributes an estimated two-three percent of global greenhouse gas emissions Emissions are released in a higher level of the atmosphere Getting the Green Light for Aviation Reduce and eliminate aviation impact on the environment Aircraft is 60% more fuel efficient than 30 years agoДЁ Social Factors Cont. Political Geographical Social Technological Competitive Porters 5 ForcesД¤ Economic Factors Business Cycle Investment Employment Service Industry Air Transportation Perishable Available Seat Miles (ASMs) Four Airline Categories: International National Regional Cargo/Air FreightДЈ Industry Analysis Environmental Scan Porters 5 Forces Economic Group 5: Meghan Davidson Berklye Dominguez Justin Pickard Michael Simpson Andrew Vargas 1 Industry and Competitive analysis: Southwest Airlines

Southwest airlines competitors