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Southwest Airlines Evaluation

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Southwest Airlines Evaluation
Introduction
Southwest Airlines is a unique short-haul airline operating in United States with its headquarters in Dallas, Texas. It was started nearly three decades ago, and it has been considered as model as a model for the industry. It was started in 1967, but started flying in 1971 following successful court battle from competitors who argued against its entry into the market (Doganis 124). Southwest airlines have come along way as low-fair airline managing to compete fairly with its larger competitors. The airline has managed to survive three decades of cut-throat competition by concentrating on offering short sectors. This sector targets at offering low unrestricted fares, excellent online departure, and high point-to-point frequencies. Its strategies targeted at diverting passengers from ground transport to air transport. This paper will evaluate the success of Southwest airlines in relation to its financial control, financial planning, management of costs and effectiveness of its decision making process.
Evaluation of Southwest Airlines Success Factors
Right from its inception into the airline market, Southwest airlines have been very keen on its financial planning especially with regard to operating at costs that are consistently below its revenues. Despite the fact that its unit revenues are not below those of its competitors, it has managed to operate at cost levels that are 25-40 % lower (Doganis 132). The airline focuses on planning its expenses to ensure they always remain way below the revenue generated. This has been achieved through point-to-point flying, simple-in-flight service, strong management, ‘no, frill, no fee’, motivated workforce, aggressive fuel hedging and one ‘plane fits all’ strategies.
One of the factors that have ensured a continued success of Southwest…...

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