Southwest Airlines has high growth and high profitability. However, its cost advantage is not as big as in prior years. * Scenario:
Southwest Airlines based in Dallas was founded in 1967 by Rollin King and Herb Kelleher. It is one of the major domestic airliners which provides carrier and transportation service. Southwest primarily provides short haul, high frequency, point- to point, low fare service.
* Fuel crisis and fuel price become threats to Southwest Airlines Company * The expected growth of oil is suspected to increase 4.3% from now until 2017. With this elastic demand, consumers will stop traveling by planes and find other ways of transportation. Airlines have seen more profit than others during the oil crisis, particularly those airlines with strong fuel-hedging strategies, such as Southwest Airlines. * Opportunities:
* There are opportunities for growth markets share, and expansion to new markets 1. More than 100 new cities have encouraged Southwest to offer flight service (2003) 2. There is an increased demand for international travel
3. Increased demand for cities that are currently (by 2009) without Southwest airline flights such as New York, Atlanta 4. With an increase of nearly 3 million people in the US there is an expansion of developing cities across the United States 5. Increased amount of upper level business travelers has led to greater demand for better seats. * Technological competency and its popularity of Southwest 6. First airline on the web
7. Booked online 13.6% more than American Airlines (in 2004) 8. Top-ranked web site in customer satisfaction among travel sites (by 2004) 9. Increase popularity of internet leads to an expected rise of 22 percent from 2006 in flight booked online. * There are barriers to entry for other competitors in the airline industry, the bankruptcy, and decline....