SOUTHWEST

AIRLINES
Group 11
AAKASH FATNANI
AKSHIT AHUJA
ANMOL BAIJAL
KESHAV SINGH
SWAPNIL VARSHNEY
VISHWENDRA SINGH
 5C ANALYSIS
COMPANY : CONTEXT :
• Follows Low cost / Differentiation strategy
• Did its own ticketing • Airline Industry was one of the
• COMPANY
Mostly flew nonstop from origin to Largest growing in 90s
destination • Retaliation in Industry from
• Did not follow hub and spoke model current players in late 60s
CUSTOMER :
• Labor relations were excellent • Due to high fixed costs, rivalry
• Luv Culture
• They could switch easily to was high between airlines
• Savings were due to reduced taxi time,
another airline
fewer gate holds, less in-air waiting
• Loved the hospitality of SW
COLLABORATOR :
employees
• Word of mouth helped SW
• Boeing
COMPETITION : • Airport Staff
Airlines competed for high traffic routes, hubs, • Fuel Vendors
airports • US Department of
• American Airlines Transportation
• United Airlines
• USAir
• Northwest
DECISION PROBLEM STATEMENT
• How to continue to be low cost leader in the Industry and be sustainable in the long run
• Find the best expansion strategy amongst three options

ALTERNATIVES
•Expand within the system, add a new flights between Detroit and Phoenix
•Grow in Chicago by adding a route from Chicago to Dayton
•Establish base in east coast- kick off service from Baltimore
 EVALUATION OF ALTERNATIVE
Detroit and Phoenix
Baltimore

S
W W
High Business S
Connection Landing fees Luv Culture
will be slightly Flight timing of cannot be
Lot of Retired Chicago to Dayton more than 3 retained
higher hours results in
Individuals Fuel Saving Avg Flight
Distance is more
O W
T S
Easier to draw Cost could
customer on Operational Low Airport Fees increase and time O T
this route Inefficiency Uncongested saving would not Establish Base in Bad weather
be much East Coast conditions could
Passengers could Airport
stopping in High Population result in delay
increase due
Phoenix to high traffic
O
T
Room for
expansion in Chance of loss in
Future worst case
scenario
Growth in Chicago
 RECOMMENDED ACTION
We would recommend to add a new flights between Detroit and Phoenix
• Many customers have written to SW to introduce a new Detroit – Phoenix Flight
•Customers would be easily drawn to this route
•They would be able to keep their “Luv Culture” and thus serve their customers better
• Less risky option as compared to Baltimore
•For Dayton Route, in the worse case scenario, company would have to sustain losses
• This Strategy thus would help them with controlled expansion
 NEGATIVES OF NOT CHOOSING OTHER
ALTERNATIVES
•Southwest could earn higher profits for Dayton Route and Baltimore Route
•Could establish base in East Coast with Baltimore Route and thus expand over the
next few years resulting in higher revenue
•Chicago-Dayton resonates with their strategy of using Uncongested Airports, thus
making them familiar even in this new area
•Number of Passengers would be high in these routes as compared to the Detroit and
Phoenix one