Southwest Airlines And The Deregulation Of The Airline Industry

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Southwest Airlines got started as Air Southwest in 1967 by a couple businessmen looking for a better way to fly. The new airline grounded for its first three years due a lawsuit filed by some of the prominent air carriers during that time. After the lawsuit was over the airline was ready so they changed their name to Southwest Airlines and took to the air. Southwest Airlines was founded on several principles of business; “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”. They understood there was a potential for airline travel to be used by everyone, not just for business travel. Since day one, Southwest’s approach profited from its accepting that in the airline industry customers’ decisions were typically motivated by prices. In the early years Southwest Airlines could be seen as the pioneers that led to the deregulation of the airline industry. The company’s economical business model tested an industry that the government heavily regulated and that was historically controlled by a few big players. Southwest was to transform the airline industry and this was something that started when they first were created. They began with short flights with minimal destinations within Texas operating only with a few aircraft. It was a quick and relatively cheap fare which became the typical flight. Southwest’s purposes were to provide their customers with an alternative way to travel, not to go toe to toe with the bigger airlines. This was one of the reasons that Southwest has continued operating in smaller, regional airports which are closer to their customers. Being able to maintain th... ... middle of paper ... ...ng sales from the parent airline. Many airlines have attempted to emulate Southwest but Southwest has developed a niche. The key company elements that have allowed Southwest to succeed in the airline industry will be difficult for rival airlines to adopt individually to increase productivity; Southwest has taken its entire history to cultivate those key elements. To begin, Southwest has only Boeing 737s in its fleet. Working a single type of aircraft increased the experience of employees which in turn means that its employees are extremely efficient in the maintenance, piloting, and general use of the Boeing 737.Increased efficiency along with a culture of positive employee participation results in significant cost reductions. This type of culture and infrastructure for an efficiently run low cost, point to point carrier requires time to be copied by other airlines.

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