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Southwest Airlines SWOT Analysis

Following are the Strengths, Weakness, Opportunities and Threats of the Southwest Airline.

Strengths

•Southwest Airlines is known to be one of the major low cost airline leaders and an initiator in being a low cost carrier.

•According to the number of passengers, Southwest has been termed as the largest airline in the world.

•It has quite a diversified management, which makes it more efficient in handling crisis.

•As the initiator for being a low cost carrier, it managed to score a lot of revenue.

•It is known to be the 3rdlargest fleet for carrying passengers in the aircraft industry all over the world.

•By posting a profit for the 36thconsecutive year in January 2009, it known to be one of the most profitable airlines in the industry.

•The Short trips that were without any frills were one of the major reasons for Southwest’s popularity.

•It has a simple fare structure, and it is one of the basic reasons which made this company successful.

•It has a positive organizational culture and encourages a positive and warm employee culture.

•It gives the option to the customer to change reservations without paying any additional costs.

Weaknesses

•It does not have offer any segmented seating i-e there is no business class or 1st class seating arrangement.

•Most of the employees are members of the employee union.

•Carries an insignificant amount of cargo/freight.

•It uses only the Boeing 737 as its aircraft, so it has a single producer.

•A minority of the tickets are purchases through agents.

Opportunities

•There are still many National and International markets that are still not tapped, and Southwest can expand to those markets.

•There are many industrial opportunities for development in the airline industry.

•It can get the latest technology that would give it a further cost effective lead, as well as providing new services/products.

•Hispanic population growth is regarded as a plus point that will make the young generation potential customers for the airline.

•It can haul on longer flights, to cover more expansion.

•It can also tap the business travel option for the business class passengers, and offer private flights.

Threats

•Online ticket reservation system by the competitors.

•Decrease in the air travel demand.

•Fuel price hauls and fluctuations are a major reason for the Southwest for not incurring more profitable operations. (Southwest counters this by strict financial spending on fuel i-e fuel-hedging).

•Terrorism activities make it more of a threat for air travel.

•Annual airline security cost increment.

•Limitations regarding the terms and legal obligations.