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Pages 5 (1255 words)
Southwest Airlines Summary In the year 1992, the Southwest Airlines lost almost $2 billion and combined with the loss till 1991, the airlines lost almost $8 billion TWA, Continental and America West were three carriers which faced severe financial crisis and were called bankruptcy during this time.
At the beginning this airlines started to fly to different cities of Texas at lower rates compared to its competitors. Although for small firms it is very difficult to survive after the having a price war, but Southwest airlines somehow survived in the competition. During this time the airlines company not only successfully survived this intense price competition, but also gained significant market share because of the cost-saving nature of its operation. Even larger airline companies could not achieve this level of cost efficiency during this time. But questions have been raised that how long this airline will survive? In the early years of its operations the airlines faced several legal cases. The famous of these cases was the case where the policy of flying from Love Field and cities of Texas have been criticized by the rival airline companies. Eventually, a negotiation between Southwest Airlines and rival companies has been met with the introduction of the Wright Amendment. This amendment provided Southwest Airlines greater success in later periods (Hartley, 2010, pp. 283-285). After these victories in respect to intense price competition and also in regard to legal cases, the airlines company started to face significant growth in the business. ...
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