Airlines Analysis: Southwest Air Cooperation

Southwest Airlines Co.
Name
Institutional Affiliation
Southwest Airlines Co.
Introduction
Southwest Air cooperation (SWA) was started in 1966 by a group of Texas investors and incorporated in 1967. SWA was started as Air Southwest Company after Lamar Muse, Herbert Kelleher, and Rollin King came together to contribute an initial capital of $560,000. In 1971, Air Southwest launched its first that connected in Houston, San Antonio, and Dallas (SWA, 2018). In February 1968, SWA asked for permission to operate in some specific routes but even after Texas Aeronautics Commission (TAC) granted them their wish, three major competitors opposed the move by filing a suit. In December 1970, the U.S. Supreme Court ruled the case in favor of Air Southwest after Kelleher took it there. In 1973, the company posted its first profit and began RUSH cargo service. In 1975, Air Southwest went public as its shares started selling on the American Stock Exchange. In 1976, Air Southwest was renamed Southwest Airlines Co. The company’s shares migrated to the New York Stock Exchange in 1977.
The Airline Deregulation Act enacted by the Congress in 1978 led to significant changes in the nature of America’s airline industry. By this time, SWA was free to expand its operations. Instead, Southwest planned conservative growth because of the high risks of large debts. It became started offering no-frills and low-cost services (Field, 2015). This airline also offers free meals and passengers can sit where they want. The company operates in major cities and minor airports as a way of avoiding congestion. SWA uses the low-cost structure through non-union labor. They focus on attracting leisure and business passengers from competing airlines by charging lower fares. SWA has entered new markets from time to time (SWA, 2018). They also shunned the baggage fee used by other top companies to increase revenue. The company has almost 400 among the newest jets in America, whose average age is 9.6 years. This research paper provides an analysis of Southwest Air’s economic, structural, and competitive characteristics during the pre-and post-deregulation period.
Various Route Structure and Products
Currently, SWA operates seven customer support and services centers across major cities such as Houston, San Antonio, Albuquerque, Oklahoma, Atlanta, Phoenix, and Chicago (SWA, 2018). However, Southwest’s main routes are major cities within Texas State. The company’s customer representatives book an average of 69,380 reservations per day, 487,000 per week and 2.1 million in a monthly (SWA, 2018). In 2017, the company enplaned around 158 million clients or an average of 13 million onboard passengers per month. They also moved more than 166 million pounds of cargo. Nonetheless, the company operates over 4,000 flights per day during peak seasons.
Since de-regulation, low-cost SWA has been acutely tied to the leisure traffic than most of the companies in the industry. Many visiting families and of tourists have always taken advantage of Southwest’s low fares. However, after mid 2000ws, SWA made a sharp turn(Bhaskara, 2014). The company evolved its simple no-frills model of business that targeted leisure customers as well as independ...