Rapid Rewards at Southwest Airlines

Topics: Airline, Southwest Airlines, Low-cost carrier Pages: 5 (1834 words) Published: September 19, 2010
1.In my opinion, Southwest should not save low-numbered boarding cards for its most frequent fliers. First of all, that would go against the idea of having simplicity in its operations systems. If Southwest reserved their low number boarding cards for its most frequent fliers, the airline would run into complications with customer seating preferences or disagreements. This would cause the established simple system of Southwest to be ineffective if certain exceptions would be made for frequent fliers. Not only does Southwest stand for simplicity but also egalitarianism. It would be contradictory for Southwest Airlines to stand for equality while at the same time offering preferential treatment to its most frequent fliers. In order to continue to be “the best short-haul, no-nonsense, low-fills utilitarian airline” Southwest should not implement saving low-numbered boarding cards for their frequent fliers. A tradeoff for this egalitarian mentality is the loss of those frequent fliers who feel that their loyalty should be rewarded for preferential treatment. Airlines that offer first-class and business class seats have the potential to lure away customers who feel that an important requirement to them remaining loyal is to be given first priority in seats. Many customers would rather pay extra in order to get better treatment in compensation for the money they invest in flying frequently. If Southwest begins to reserve low numbers for their frequent fliers, they might end up not only experiencing a decrease in efficiency when it comes to boarding, but complaints from customers who chose Southwest strictly due to their “first come first serve policy”.

2.In my opinion, Southwest should allow frequent fliers to take the next available flight with an empty seat versus having these customers wait for the next available flight within the same fare class. My decision is based upon the fact that an empty seat is already a sunk cost, and that way frequent fliers could be rewarded for their loyalty without having to go against their egalitarian mindset. It would also be more efficient in the sense that a flight has to depart despite the fact that not all their seats have been sold. Lastly, customers who had missed their flight would not have to wait extra for an appropriate flight which matches their fare, which could in-turn reduce the amount of complaints the airline experiences about restricted fares preventing them in reusing their ticket. If Southwest begins to allow their frequent fliers to go sit in an empty seat, they could gain a competitive advantage against those airlines that impose service charges on top of letting passengers use their ticket on a later flight.

3.Southwest Airlines have a vast amount of sources, which contribute to their competitive advantage. Firstly, Southwest is more affordable because they brand themselves as a short-haul airline. By only offering short-duration flight times, Southwest Airlines are able to cut many of their service costs, an example being the absence of meals. Southwest chooses to fly to locations with smaller airports, giving them the competitive advantage of reduced congestion, reduced traffic delays and an increased convenience for customers who needed to fly to smaller towns remote from big international airports. All these factors allow Southwest to have the competitive advantage of having the lowest operating expenses per available seat miles. By flying one type of aircraft, Southwest is able to lower training costs for maintenance and flight crews. This gives the airline the competitive advantage of developing an increased knowledge about the technical difficulties that may occur with this specific model of aircraft, along with being able to maximize the utilization of the aircraft. By flying point-to –point as opposed to hubs, Southwest is able to minimize the issue of constantly connecting their flights. This gives the airline the competitive advantage of needing the...

Cited: Discher, Steve. “Not All Customers Are Equal: The Case for Differentiated Service”. Customer Insight/Business Intelligence. insurancetech.com. Insurance and Technology. 22 May 2009. Web. 23 Jan 2010.
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