Mountain
Southwest Airlines
Southwest started its operations in 1971 in Dallas-Houston, Dallas-San Antonio & San Antonio-Houston our operations were delayed by lawsuits filed against us by our competitors. Braniff and Texas International (TI) were the two major Airlines played a very distinctive role in these routes & our competitors. Customers were not happy with service provided by both, this when Southwest entered with new prices and quality services. The two giants maintained their fares $27 & $28 but Southwest started with $20 fare. When we started off with operations it was calculated that we would need 39 passengers per flight for breakeven but we were averaging 13.1 and 12.9 passengers per flight. Reopening of William P. Hobby airport because of customer preference which led to increase in transportation revenues & our passenger loads went from 18.4 to 26.7 passengers per flight. Southwest came up with a discount flight of $10 on Friday evenings after 9.00pm, seeing the response to this in May it was started on daily basis with half-fare flights after 8 PM, also Saturday flights were reintroduced with the same half-price. To improve sales in Dallas-San Antonio market, a limited period offer was made, flights were to be half priced for this route. If it showed positive responses we were considering making it a permanent price. This strategy was countered by Braniff’s “Get Acquainted Sale” which now offered half fare flights in our Dallas-Houston Hobby route which is our most profitable route.
Problem
How to retain a market share in Dallas-Houston Hobby route. To protect our market share in the Dallas-Houston Hobby route from Braniff. In a longer term problem we can say that they may adopt this pricing strategy in the other markets
Causes
Braniff adopting similar pricing & servicing strategy of Southwest: - Braniff has organised a "Get Acquainted Sale" adopting a similar pricing strategy from our Dallas-San Antonio route. Giving also a 1st
Southwest started its operations in 1971 in Dallas-Houston, Dallas-San Antonio & San Antonio-Houston our operations were delayed by lawsuits filed against us by our competitors. Braniff and Texas International (TI) were the two major Airlines played a very distinctive role in these routes & our competitors. Customers were not happy with service provided by both, this when Southwest entered with new prices and quality services. The two giants maintained their fares $27 & $28 but Southwest started with $20 fare. When we started off with operations it was calculated that we would need 39 passengers per flight for breakeven but we were averaging 13.1 and 12.9 passengers per flight. Reopening of William P. Hobby airport because of customer preference which led to increase in transportation revenues & our passenger loads went from 18.4 to 26.7 passengers per flight. Southwest came up with a discount flight of $10 on Friday evenings after 9.00pm, seeing the response to this in May it was started on daily basis with half-fare flights after 8 PM, also Saturday flights were reintroduced with the same half-price. To improve sales in Dallas-San Antonio market, a limited period offer was made, flights were to be half priced for this route. If it showed positive responses we were considering making it a permanent price. This strategy was countered by Braniff’s “Get Acquainted Sale” which now offered half fare flights in our Dallas-Houston Hobby route which is our most profitable route.
Problem
How to retain a market share in Dallas-Houston Hobby route. To protect our market share in the Dallas-Houston Hobby route from Braniff. In a longer term problem we can say that they may adopt this pricing strategy in the other markets
Causes
Braniff adopting similar pricing & servicing strategy of Southwest: - Braniff has organised a "Get Acquainted Sale" adopting a similar pricing strategy from our Dallas-San Antonio route. Giving also a 1st