Passenger Airline Industry – Southwest Airlines, American Airlines

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Index

Industry Overview…………………………….1
Southwest Airlines…………………………….1
4Cs marketing mix…………………….2
American Airlines……………………………..3
4Cs marketing mix…………………….4
Primary data collection and analysis.......……..4
Consumer perception of the brands…………...7
Southwest Airlines.................................7
American Airlines..................................9
Effective brand in terms of communication….11
Recommendations to American Airlines..…....12
References……….…………………………....13
Appendix...........................................................14

Airline Industry Overview
Passenger airline industry is a competitive service industry. Several corporations in this service industry provide scheduled air transportation from source to destination. The industry was heavily impacted by the global recession. Many major Airline companies faced heavy revenue losses and a hand full of airlines merged in the post-recession era to handle the situation of decreasing demand in air travel. As stated in the article “Airfares Are Chasing Oil Prices Higher” published in New York Times(2011), sky rocketing air fuel price and environmental regulation is one of the major challenges faced in the passenger airline industry. About 11 percent of the overall greenhouse emission in U.S. is from the Airline industry. Aircraft makers such as Boeing recommend the use of bio-fuel which could reduce the emissions by 80 percent. In response, the several airline companies are taking initiative to choose alternate fuel for their flight operations. The switching cost involved in this migration is adding up as a burden to the already unsteady industry. Southwest Airlines Background

Southwest Airlines (SWA) positions itself as a low cost airline which operates in domestic routes. SWA recently acquired AirTran Airways, and is trying to integrate the two airlines. The company’s low cost structure enables it to offer low price to its customers. Based on the number of passengers transported, Southwest Airlines is the largest airline company in the U.S. Southwest prides itself on consecutive years of profitability. As stated in the company’s website, SWA’s net income increased from $200 million in 2009 to $459 million in 2010, with a 17% growth of revenue from $10.35 billion to $12.10 billion. SWA is a cost efficient airlines company that consistently offers the lowest airfares and the highest quality of customer service to air travelers. The company’s growth depends on its dedication to reach the customer core values that define the company’s spirit, and to establish an effective and innovative workforce in a stable work environment. Southwest Airlines 4Cs

Consumer Benefit: SWA offers low fare flight tickets and unorthodox boarding services. SWA’s distinctive products and services, such as “all leather seats”, “no assigned seats”, “no change fees”,, “WiFi onboard” bring great benefits to consumers and make it different from other US airlines. In airports and air, SWA provides high quality services to little kids, children travelling alone, customers with disabilities, and pets. Moreover, SWA cooperates with various partners to provide many other features including hotel reservation, car rental, dinning, retail, and travel guide, connecting consumers all over their time in air and on ground. SWA’s sub-products includes rewards credit card from Chase, Southwest gift card, GetAway Finder, social network communities, etc. Cost to the Consumer: SWA charges passengers flexibly in three levels of board, while overall in low cost. Most one-way offers are under $350 and some are less than $75. Additional government fees and taxes are clearly stated and no other extra fees will be posed. The fares of Business class of SWA which is also known as ‘Business Select’ is slightly high priced for the extra benefits given to the passenger. Economy class passengers pay less and have only very few differences...
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