IFE Matrix Key Internal Factors Strengths 1. Largest air carrier in US by number of passengers carried. 2.

Reported profits for 34 consecutive years 3. Low cost structure and fuel hedging contributes to consistent growth Long serving and experienced management team - stayed focus on SW objective as no frills airline for more than 2 decades Good corporate values - employees are treated like customers - ensures work commitment - strong human resource culture Operates on 15% to 25% below its rivals in term of cost per available seat mile Fastest turnaround time of 20 minutes or less Uses same type of plane, Boeing 737, which lowered the company's cost on training, maintenance and inventory. Best customer loyalty program Solid marketing exercise Weight 0.08 0.05 0.10 Rating 4 4 4 Weighted Score 0.32 0.20 0.40

4. 5. 6. 7. 8. 9. 10.

0.04 0.05 0.09 0.08 0.03 0.01 0.02

3 3 3 3 3 3 3

0.12 0.15 0.27 0.24 0.09 0.03 0.06

Weaknesses Net income fell for two consecutive years, 41.7% in 2007 and 8.9% in 1. 2006 Conservative expansion plan - goes to new location if there are 10 to 12 2. flights per day only 3. Do no explore transcontinental operations 4. Avoided the hub and spoke operations Competition from other short haul airlines like JetBlue, Spirit, ATA, 5. Trans Air , Sky West 6. Does not subscribe to any centralised online service 7. No baggage transfer 8. Only flies 737s 9. Very high staff overhead 10. No segmented seating position No proper vision, mission and objective statements - mssion statement 11. does not posses all 9 elements of a good mission statement 12. Employees is more important than customers. Total

0.02 0.08 0.07 0.01 0.04 0.03 0.02 0.03 0.09 0.03

1 2 2 2 1 2 1 1 2 1

0.02 0.16 0.14 0.02 0.04 0.06 0.02 0.03 0.18 0.03

0.02 0.01 1.00

2 2

0.04 0.02 2.64

IFE Matrix Key Internal Factors Strengths 1. Largest air carrier in US by number of passengers carried. 2. Reported profits for 34 consecutive years Low cost structure and fuel hedging contributes to consistent 3. growth 5. Operating income in 2006 increased by 13.9% 6. Revenue passengers carried increased by 7.9% in 2006 7. Experienced management team Good corporate values - employees are treated like customers 8. ensures work commitment Operates on 15% to 25% below its rivals in term of cost per 9. available seat mile 10. Fastest turnaround time of 20 minutes or less Not affected by new security measures with the implementation of new automated systems and technologies to streamlined check11. in process Uses same type of plane, Boeing 737, which lowered the 12. company's cost on training, maintenance and inventory. 13. Best customer loyalty program

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Weaknesses 1. 2. 3. 4. 5. Net income declined 41.7% in 2007 Net income fell 8.9% ($49 million) in 2006 Stockholders' equity drops by 3.4% Conservative expansion plan - goes to new location if there are 10 to 12 flights per day only Do no explore transcontinental operations

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Southwest Competitive Profile Matrix Southwest Weighted Score Rating

Critical Success Factors Global expansion Market share Price competitiveness Financial position Consumer loyalty Management Customer service Employee productivity Innovation

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