Comparing Southwest and Continental Airlines Essay

Comparing Southwest and Continental Airlines Essay

Length: 2984 words (8.5 double-spaced pages)

Rating: Strong Essays

Open Document

Essay Preview

Introduction
In order for companies to maximize profits and productivity, it is important that they implement managerial economics on both a day-to-day and strategic basis. This paper will compare and contrast Southwest and Continental Airlines from a managerial economic perspective. The goal of the paper is to critically analyze both companies on their use of managerial economic practices.

The Airline industry is a capitally intensive industry, and because of this companies within the Airline industry focus greatly upon cost, as well as revenue generation. If costs increase beyond control, profitability will soon decrease. Southwest were quick to learn that if they were going to run their company in a profitable manner they had to first establish their market, and then make every effort to keep costs low. In the early 1970’s soon after their inception, Southwest established the ten-minute turn. This was the ability to unload and reload passengers, refill the plane with gasoline, and make all the necessary checks, all within a ten-minute window. They had to keep their planes in the air as much as possible, because of their low price, high frequency market niche. “Part of the great strength they’ve had, is that they have consistently followed a pattern of keeping costs low in every place they have gone.” (Freiberg, 1996, p35)

Continental also looked to keep costs low. In 1994, Continental was renowned as a cost cutting airline. “We were stuck in our mold of being a cost cutting airline, and if you weren’t talking about cutting costs, nobody at the top wanted to hear you” (Bethune, 1998, p10) The problem Continental experienced were that they cut costs to such an extent that it became the culture of the company. When Gordon ...


... middle of paper ...


... in the right direction. Southwest, built on a solid foundation, have developed into a well-managed company that continues to move forward into the future.

My main criticism of the Southwest book, was that is was written from an extremely optimistic viewpoint, the authors obviously being big fans of Southwest. The book was not shy in retelling the many successful ventures of Southwest, but held back on the many problems they have encountered in their history. From Worst to First on the other hand gave information from a negative and positive perspective, although as Gordon Bethune wrote the book, we also might assume some level of bias. Both books were an extremely useful learning tool, a refreshing change from many dry textbooks. They demonstrate that there is no one-way to run a company, even within the same industry, Southwest and Continental being examples.

Need Writing Help?

Get feedback on grammar, clarity, concision and logic instantly.

Check your paper »

Behind The Southwest Airlines Culture Essay

- Southwest airlines began in 1967 as Air Southwest Co. Based in Dallas. They began serving three major cities in Texas, with only three Boeing 737 aircrafts. March 29th, 1971 Air Southwest Co. changed its name to Southwest Airlines Co. The company began service on June 18, 1971 from Love Field in Dallas to Houston and San Antonio. Founders Rollin King and Herb Kelleher were inspired by their location to create an airline that was focused on the people. The LUV airline prides itself with exceptional employees and “no frill” customer service....   [tags: Southwest Airlines Analysis]

Strong Essays
2810 words (8 pages)

Essay on Analysis of Southwest Airlines

- Air transport is a global industry and as such every airline is a likely challenger for every other. It is contrary to expectation that any airline will be able to contest on a large scale without being associated to other carriers. Traffic feed is the industry's lifeblood and stand-alone carriers will be labored to carry low-revenue point-to-point traffic when front with airlines able to offer manifold route alliances. Southwest Airlines is a major carrier to the USA accounting for about 85% of its airfreight tonnage, but it also operates scheduled services to South Africa, Japan and Hong Kong....   [tags: air transport, aviation, airlines]

Strong Essays
807 words (2.3 pages)

History of Southwest Airlines Essay

- More than 32 years ago, Rollin King and Herb Kelleher got together and decided to start a different kind of airline. They began with one simple notion: If you get your passengers to their destinations when they want to get there, on time, at the lowest possible fares, and make darn sure they have a good time doing it, people will fly your airline. And you know what. They were right. What began as a small Texas airline has grown to become one of the largest airlines in America. Today, Southwest Airlines flies more than 65 million passengers a year to 59 great cities (60 airports) all across the country, and they do it more than 2,800 times a day....   [tags: Voices of Southwest Airlines]

Free Essays
1181 words (3.4 pages)

Essay on The History of Southwest Airlines

- The History of Southwest Airlines Southwest Airlines (SWA) begins in June 18, 1971, when SWA first operated a first airline consul between Houston, Dallas and San Antonio. Rollin King and Herb Kelleher are the founders of the company. The end of 1971 SWA immediately began to expand. In 1972 all Houston service is transferred to Houston's Hobby Airport form Houston Intercontinental, that is make more convenient for people to fly. During the first year of operations the customers were the Southwest's first priority....   [tags: Southwest Airlines Aviation Airplanes Essays]

Strong Essays
3808 words (10.9 pages)

Southwest Airlines' Sustainability and Future Essay

- Southwest Airlines’ Sustainability and Future “The mission of Southwest Airlines is dedication to the highest quality of customer service delivered with a sense of warmth, friendliness, individual pride, and company spirit (Southwest Airlines, 2009).” Since its conception in 1971 by founders Rollin King and Herb Kelleher, Southwest Airlines has stood by their mission statement. The simplistic belief of "If you get your passengers to their destinations when they want to get there, on time, at the lowest possible fares, and make darn sure they have a good time doing it, people will fly your airline (Southwest Airlines, 2009)” has served Southwest in becoming a major competitor in the airlin...   [tags: Southwest Airline Industry Case Study]

Strong Essays
2038 words (5.8 pages)

The Archetypical Low-Cost Air Carrier: Southwest Airlines Essay

- Abstract The seventh largest major domestic airline in the United States (US), Southwest Airlines, is commonly known or referred to as a low-cost carrier. Southwest Airlines is the only major airline that provides short-haul, point-to-point service in the United States. In fact it was the first airline of its type ever started; it has become the archetypical low-cost airline. The idea has proven itself so well, that other start-up airlines have based their company strategies upon the basics of Southwest....   [tags: Aviation Southwest Airlines Flying Essays]

Free Essays
3920 words (11.2 pages)

Continental Airlines Essay

- 1.     Continental Airlines, like other companies in the airline industry, is a volatile organization. However, Continental has many strengths that have allowed it to prevail through tough times and avoid complete ruin. The CEO of Continental Airlines played an important role in reviving the company. His “Go Forward Plan” vocalized the strategy of the company and focused on every aspect of the organization. Continental has a well-defined target market, providing services to upper-class and business travelers....   [tags: Economics Finance Business]

Strong Essays
861 words (2.5 pages)

Southwest Airlines Essay

- Southwest Airlines, Key Facts: Niche strategy. Concept: • Concentrate in underutilized airports • 1 type of aircraft – fuel-efficient 737 (1994 – more that 200 planes) • Frequent, on-time departures • Low cost fares, only 2 types of fares per root • No seats assigned, no meals • Point-to-point roots • Higher equipment initialization, shorter turn-around times Competitive advantage: • Cost structure • "The workforce is dedicated to the company. They're Moonies basically. That's the way they operate." Issue: New Competition....   [tags: Company Business Analysis Management]

Strong Essays
1737 words (5 pages)

Essay on Southwest Airlines

- This is the historic background of an American Airline company called the Southwest Airlines Co. based in Dallas which still exists and operates with great success between 57 cities in 26 states of the US, by over 300 airplanes , providing primarily short-haul, high frequency, point to point, low fare service . Through this essay we will see an analysis of the company’s advantages and disadvantages through a SWOT Analysis. We will try to localize the problems of the company at the time and in the case of a future expansion, and we will try to give a number of alternative solutions and chose one of them....   [tags: essays research papers fc]

Strong Essays
2969 words (8.5 pages)

Southwest Airlines Essay

- I. Current Situation Following the Deregulation in 1978, a competitive price war ensued among the airline industry as a direct result of the new freedom for airlines to set their own fares as well as route entry and exits. This gave rise to the operating structure of the airlines as it exists today, consisting of the point-to-point system and the hub and spoke system. With this came the change of focus for major airlines to non-stop, cross-country routes in densely populated cities, which, in a regulated environment, would be profitable....   [tags: essays research papers fc]

Strong Essays
6548 words (18.7 pages)