PPT
Differentiation Strategy
Southwest
Other Airlines
• Focused on shorter routes within 1 hours of travel
• Considered competitor as the car travel and not airlines
• Customer experience is considered the best way to win loyalty by
“Fun-LUVing” attitude for in-flight entertainment
• Culture committee made to guide Southwest in creating the fun loving Aura
• Cashless cabin (credit card only for onboard purchase )
• Minimum turnaround time (10 minutes), 1/5th of competitors
• Point to point service with no first class, no assigned seats no interlining of bags or passengers and no code sharing
• Flights from Airports not served by other airlines , less congested and more easily accessible to business travelers
• Prices set according to private automobiles
• Focused on long route travel
• Competition focus on other airline operators which led to intense competition of prices
• Their customer services was based on giving meals, providing luxuries and more in-flight services and some of them were even complementary
• Adherence to sophisticated travel
• Only cash payment for onboard services
Analyzing the cost leadership strategy of Southwest Airlines
Fuel Hedging
Other factors
Hedging is an investment position intended to offset potential losses/ gains that may be incurred by a companion investment. Single type of aircraft usage from a single vendor
Following a point to point model enabling the various new opportunities nearby once started serving to a new market Maximum 3 cabin crew as compared to average of 6 cabin crews
Using less congested airports for being low turnaround time
No complementary meals
High utilization rate of fleet of aircraft This helped Southwest to accomplish few financial objectives like:
a)Plan towards profitability
b)Plan cash flows
c)Lower overall fuel expenses
Problems Faced
Declined revenues after the September 11,2001 terrorist attack , but still able to maintain the highest values stock of any U.S airline
Problem of
Southwest
Other Airlines
• Focused on shorter routes within 1 hours of travel
• Considered competitor as the car travel and not airlines
• Customer experience is considered the best way to win loyalty by
“Fun-LUVing” attitude for in-flight entertainment
• Culture committee made to guide Southwest in creating the fun loving Aura
• Cashless cabin (credit card only for onboard purchase )
• Minimum turnaround time (10 minutes), 1/5th of competitors
• Point to point service with no first class, no assigned seats no interlining of bags or passengers and no code sharing
• Flights from Airports not served by other airlines , less congested and more easily accessible to business travelers
• Prices set according to private automobiles
• Focused on long route travel
• Competition focus on other airline operators which led to intense competition of prices
• Their customer services was based on giving meals, providing luxuries and more in-flight services and some of them were even complementary
• Adherence to sophisticated travel
• Only cash payment for onboard services
Analyzing the cost leadership strategy of Southwest Airlines
Fuel Hedging
Other factors
Hedging is an investment position intended to offset potential losses/ gains that may be incurred by a companion investment. Single type of aircraft usage from a single vendor
Following a point to point model enabling the various new opportunities nearby once started serving to a new market Maximum 3 cabin crew as compared to average of 6 cabin crews
Using less congested airports for being low turnaround time
No complementary meals
High utilization rate of fleet of aircraft This helped Southwest to accomplish few financial objectives like:
a)Plan towards profitability
b)Plan cash flows
c)Lower overall fuel expenses
Problems Faced
Declined revenues after the September 11,2001 terrorist attack , but still able to maintain the highest values stock of any U.S airline
Problem of