weaknesses of southwest airlines

Satisfactory Essays
Southwest Airlines was founded in “1964, when Rollin King purchased a charter airline company called the Wild Goose Flying Service” (Lauer, 2010). The idea of Southwest Airlines began in “1967, between King and Herb Kelleher” (Lauer, 2010). After winning “legal battles against their rival competitors Southwest was ready for operations in 1971” (Lauer, 2010). The CEO of Southwest Airlines is “Gary Kelly, who was hired to work in 1986” (Lauer, 2010) He started by working in the financial department, got promoted to the CFO, and then became the CEO. Gary Kelly’s “total compensation was $4 million” (Forbes, 2013).
Southwest Airlines has been in business for about 50 years, and has been very successful. It is a strong company with a strong leader and has a lot of strengths that have helped it stay in business. It has a firm operating strategy, strong fleet operations, and recognition in the industry. However, with strengths come weaknesses. Weaknesses like heavy dependence passenger revenues, declining operating efficiency, and dependence on one airplane producer can cause complications for Southwest’s business operations.
Southwest has seen a considerable drop in their credit ratings. “Fitch, Moody’s, and Standard & Poor’s have downgraded Southwest’s credit rating from BBB+ to BBB based on lower demand, especially among business travelers, and continued volatility in fuel prices” (Hauck, 2010). The drop in demand and continued volatility in fuel may force Southwest to obtain additional financing to support expansion and operation plans. However, “Southwest has significant contractual obligations and commitment primarily with regard to future purchases of aircraft, payment of debt and lease arrangements” (Hauck, 2010). These high leve...

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...munity, respect, integrity, excellence, personal development and responsible stewardship. Southwest provides their “employees with opportunities for learning and personal growth” (Southwest Airlines official site). The treat their “employees and customers with respect” (Southwest Airlines official site). They provide a “high quality of customer service” (Southwest Airlines official site). This portrays a company that try to be responsible stewards towards their customers. This chows they believe in community. They treat everyone in their business community with respect. They strive to make everything better for their customers and provide them with a good travelling experience. They also try to do a lot of social work to help out the general public. Their values make them a great business, just the same way Saint Leo University’s core values make it a great school.
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