We need to understand what is at the core of such a phenomenal profitability irr

Question

We need to understand what is at the core of such a phenomenal profitability irrespective of the tide of the economy. Clearly there are 2 factors

As they themselves say and is very well accepted that the operations factors can be copied but the character of the management, camaraderie of the employees and the joy of the customers cannot be copied. Also these factors come together to create a swirling effect of comfort to every touchpoint (customers, employees, shareholders, suppliers, regulators etc). Hence the charisma, aura of such a beautiful and fulfilling workplace, ecosystem cannot be copied.

Still to mention the operational factors as mentioned below are critical to such a low cost but profitable airline.

And the cultural factors:

Any other airline that wishes to copy them will have to work on all the factors and also create a synergy among all factors to achieve the overall effectiveness of the model (copying a few factors will never result in the desired effects)

As true with any business model Southwest does faces many risks and would have to be always vigilant and focused to mitigate them.

Yes SouthWest can survive in tough times also. In fact it has a better chance in tough conditions due to their ability to do so regularly. The saying “When the tide is low, we get to know who is swimming naked” aptly summarizes it.

Explanation / Answer

hopes to double ebay 27, 2013, p B.1Jelf Himmelman, "eBay's December 19, 2013 www.abay.com Strategy for G of mobile devices, Donahoe active-user count to more than 200 million by 2015 and ncrease revenue from $14 bilion to $23 illion Marketing Excel management substitute aircraft, reschedule flight crB and transfer mechanics quickly and effortlessy >>Southwest Airlines One of Southwest's biggest cost sa s its strategy of purchasing fuel options years in advance Southwest Airlines debuted in 1971 with Iittle money but Jet fuel is an airline's largest expense and now cours lots of personality. Marketing itself as the LUV airline, the for 35 percent of operating costs versus 13 percent just company featured a bright red heart logo and relied on little more than a decade ago. Many of Southwest's long outrageous antics to generate word of mouth and new term contracts allowed the airine to purchase fuel at business. Flight attendants in red-orange hot pants served per barrel, a significant savings especially during the 1990 Love Bites (peanuts) and Love Potions (drinks). Today, it and 2000s when oil spiked past $100 per barrel. Analysts s Fortune's seventh-most admired company in the world. estimate it has saved more than $2 bilion this How did a small-budget airline accomplish so much? Southwest also improves its fuel efficiency by consumers. The company uses a point-to-point routing in bathrooms, and seats have been replaced with ligh per plane than any other airline. Each aircraft averages adds up. Southwest's business model is based on streamlining its ing its planes lighter. Crew members power-wash the jet operations, which results in low fares and satisfied, loyal engines each night to remove dirt, planes carry less water system, flying thousands of shuttle trips between different models. Because the airline consumes approximately 1.5 pairs of airports or "points" and carrying more passengers billion gallons of jet fuel each year, every minor chang 6.25 fights a day, flying for almost 12 hours. Southwest Southwest has expanded by entering new markets can accomplish such a feat because it avoids the tra- other airlines overprice and underserve. These usualy ditional hub-and-spoke system and has extremely fast include secondary cities with smaller airports, whose turnaround. its early years, it turned planes around in lower gate fees and reduced congestion promote faster ess than 10 minutes. Today it averages 30 minutes-half turnaround and lower fares. The company believes it can reduce fares by one-third to one-half whenever it enters Southwest's unique boarding process also helps a new market, and it expands every market it serves by expedite departure. Instead of getting assigned seating, making flying affordable for more people. Southwest ac passengers are put in one of three groups (A, B, C) and quired Air Tran in 2011 for $1.4 billion, expanding its con given a number when they check in. Group A boards first sumer base and adding new destinations like Richmond and in numerical order (for example, A1-A30) Once on Memphis, and cities in Mexico and Puerto Rico, its first board, passengers may sit anywhere they like. international locations. Southwest also saves by flying only Boeing 737- Southwest has 700s and 737-800s. This simplifies the training process programs such as same-day freight for pilots, flight attendants, and mechanics and lets counts, Fun Fares, and Ticketless Travel. The airline pioneered unique services and pricng service, senior dis

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