Southwest Airlines :: essays research papers

Southwest Airlines1.)Many changes have occurred and are occurring in the air duct industry, which pose a potential threat to Southwest Airlines. The airline industry has traditionally had many airlines receive annual loses on their income statements. This course of action is still continuing today as many airlines stand in financial trouble. Some of these financial troubles arise from changes brought upon them from the ever-changing g everyplacenmental regulations. The close recent change in governmental regulations that pull up stakes have the largest force-out on Southwest Airlines is the change in the federal ticket assess in 1997 on flight routes that are one jet accession miles. This new tax system replaces a percentage tax with a tax that includes a flat segment fee that will make water conflict with the low-fare carriers. This is causing Southwest to make some changes in their scheme, which will cause them to lose some of their appeal advantage. Their largest cost a dvantage over their current rivals is in the flights, which are five hundred miles (59% cost advantage). Their cost advantage is much smaller for the larger flights, which are one thousand five hundred miles (35% cost advantage). This already has caused Southwest to change their strategy by making their nonstop flights protracted with over 16% of their flights longer than one thousand miles.Another threat that Southwest Airlines is facing is the take-off by other airlines. Other airlines are copying Southwests strategy in order to enter the low-fare, short-haul market. Delta Airlines has built a low-fare regional carrier service and has acquired a minority stake in trio regional airlines. unify Airlines is also making a serious debut into the same market. United is doing this with United Express, which will feed passengers from regional carriers into the United system, and United Shuttle, which provides over 450 short-haul flights in the western states. The opportunity for expa nsion is limitless for Southwest Airlines.