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Business analysis & recommendations report:Southwest Airlines Co.

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  1. Company overview.
  2. Business analysis.
  3. The southwest experience.
  4. Fuel Hedging.
  5. Competitors.
  6. Recommendation.
  7. Conclusion.

Southwest Airlines Co. was founded in 1967, but its first scheduled flight was delayed until 1971 due to lawsuits from competitors. The company began as a small, regional carrier with three routes. In its initial public offering in June of 1971, the company reported that the funds raised would be used to begin operations and to offer flights from Dallas-Fort Worth's Love Field to Houston and San Antonio.
After the construction of the Dallas-Fort Worth Airport in 1974, Southwest decided to continue flights from Love Field instead of migrating to the new airport like other airlines. Over the years, this decision has allowed the company to virtually gain a monopoly at Love Field due to restrictions placed on the amount of flights and gates there.
Since 1971, Southwest has expanded from serving three cities in Texas to serve 63 cities in 32 states, and now operates over 3,300 flights daily in the United States. In 2006, it was the 300th largest company and sixth largest airline in America by gross annual revenue.

[...] By implementing the recommendations contained in this report, Southwest can grow by increasing its market share among business travelers, optimizing cargo freight operations, and expanding internationally through code-share agreements and new routes. CONCLUSION Southwest Airlines has developed a great business model, which has proved to be successful over the last 30 years. By keeping ticket prices low and constantly improving its efficiency in operations, it has expanded from a small, regional carrier with three routes to the fourth largest airline in the country. [...]

[...] Traditionally, the most attractive airlines for business travelers have been those with the best frequent flyer programs, last minute flight availability, and luxury amenities. Since Southwest already has a frequent flyer program and its last minute flights are often cheaper than similar flights on competing carriers, the company should focus on providing luxury amenities. As mentioned previously, JetBlue's aircraft feature leather seats. Recent surveys indicate that business travelers consider seating to be one of their top determinants in choosing an airline. [...]

[...] efficiency in operations to increase operating profits by from 2005 to 2006, resulting in an operating profit of $934 million for 2006.[8] BUSINESS ANALYSIS Currently, the company is the leading low-cost airline company in the United States. It ranks first in market share in approximately 90% of its top 100 city pair, and holds 63% of total market share in those locations.[9] Additionally, Southwest also leads the industry in customer satisfaction ratings. Since 1987, when the Department of Transportation began tracking customer complaints for airline companies, Southwest has consistently received the least number of complaints per passengers boarded.[10] The Southwest Experience Booking a flight and flying on Southwest is a unique experience for customers that have not flown with the airline previously. [...]

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