Southwest Airlines

Background of Southwest Airlines

Southwest Airlines is the nation's fourth largest carrier in terms of customer boardings. Southwest began Customer Service on June 18, 1971 with three Boeing 737 aircraft serving three Texas cities - Dallas, Houston, and San Antonio. Southwest has grown immensely since then and now operates over 350 Boeing 737 aircraft all over the United States. With the lowest operating cost structure in the domestic airline industry.

Southwest provides primarily short-haul, high frequency, point-to-point, and the lowest and simplest fares. The airline serves 59 airports in 58 cities in 30 states. Southwest also retains one of the best overall Customer Service records. "Southwest's core advantage is that they work more productively, more flexibly and more creatively." 34,000 employees currently work for Southwest, which launches nearly 2,800 flights a day. Southwest Airlines' mission statement is "...dedication to the highest quality of customer service delivered with a sense of warmth, friendliness, individual pride, and company spirit". The main objectives of Southwest's business strategy include focusing on transporting high numbers of passengers on short trips with high frequency, providing low fares, making a strong commitment to its employees and customers, and aggressive marketing

Southwest Airlines' second strategy is to offer their customers low fares. Southwest continues to be the least expensive airline in its market. Southwest offers a ticket-less travel system to trim travel agents' commissions and run its own reservation system. Significant portions of customers make reservations through its Web site. Southwest is one of top airlines that scored the highest on online sales performance. These airlines are best at moving their customers to the online channel.

1. What was the nature of marketing problem facing Southwest Airlines in June 1971?

Southwest Airlines was founded by Rollin W.King in 1967. The two existing airlines, Braniff and Texas International Airlines sued against the Southwest Airlines to prevent it from competing, but the Texas Supreme Court ultimately gave decision in Southwest's favor.

On Janauary 26, 1971 Muse, the former persident of Central Airlines became the persident, treasurer and director of the Southwest Airlines. Optimistic over the outcome of Southwest's legal battles, Muse and King spent many weeks on the West Coast in late 1970 and 1971, prospecting for new aircraft. The airline industry was then in a recession, and aircraft purchasers were courted assiduously.

Marketing problem facing Southwest Airlines in June 1971 was to select an advertising agency. They had an assignment to come up with a complete communication program other than publicity within four months. Muse said that "we've got no hostesses and no uniforms and no airplanes and no design and no money", but "we are going to have an airline flying in 120 days". The campaign for the advertisement began with small teaser ads in the newspapers, containing provocative headlines such as "The 48-minute Love Affair," "At last a $20 Ticket You Won't Mind Getting"and"A Fare." The unsigned ads contained a telephone number for the reader to call and on phoning, a caller in Dallas would hear a taped message.

It was also advertised in newspapers in the three market areas. Daily, full-page newspaper ads appeared for the next two weeks in all markets highlighting the advantages Southwest Airlines offered the traveler- new aircraft, attractive hostesses, low fares, fast ticketing and inexpensive drinks. 30-second spot on Television, and billboards at entrances to all the three airports were used for advertising campaign.

They also used a direct-mail campaign for influential business executives. At the year's end 1971, Southwest's incurred a deficit of $3.75 million.

2. What do customer look for in selecting airline?

In this new commercial environment, consumers have had to take a more active role in choosing their air service by learning to ask a number of questions.

* Am I more concerned with price or with schedule?

* Am I willing to fly at a less convenient time if it means saving $25?

* Will the airline penalize me for changing my reservation?

* Will I have to pay extra for checked bags or for seat assignments?

* What will the airline do for me if it cancels my flight?

 Air Fares

Because of the emphasis on price competition, consumers may choose from a wide variety of air fares. It is easy to compare fares and schedules on the Web, using airline web sites or third-party reservation services. They can also contact a travel agent, another ticket outlet, or the airlines serving the places you want to travel to and can also be alert to newspaper and radio ads, where airlines advertise many of the discounts available in your city. Finally, be alert to new companies serving the market. They may offer lower fares or different services than older established airlines

 Schedule and Tickets

Once you decide when and where you want to go, and which airline you want to use, you will usually have to purchase a ticket in order to hold a confirmed seat. However, many large airlines will hold a reservation for 24 hours or so without payment. Others require payment at the time you make a reservation but will provide a full refund if you cancel in the first day or so. When available, both of these procedures permit you to hold a seat and a fare for a short time while continuing to shop for a better deal. Customer should be aware of on time performance, information regarding tickets and re-check the arrival and departure when selecting a flight and buying a ticket:

 Overbooking

Overbooking is not illegal, and most airlines overbook their scheduled flights to a certain extent in order to compensate for "no-shows." Passengers are sometimes left behind or "bumped" as a result. When an oversale occurs, the Department of Transportation (DOT) requires airlines to ask people who aren't in a hurry to give up their seats voluntarily, in exchange for compensation. Those passengers bumped against their will are, with a few exceptions, entitled to compensation.

 Baggage

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