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South West Airlines - Admission/Application Essay Example

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In the present report, “South West Airlines” the environmental factors affecting the overall performance of the airlines has been discussed. The various environmental issues are analyzed and strategic solutions are provided to overcome these issues…
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South West Airlines

At present, Southwest Airlines owns nearly 400 Boeing aircraft and operates in almost 59 cities across the United States. In the present report, the environmental factors affecting the overall performance of the airlines have been discussed. The various environmental issues are analyzed and strategic solutions are provided to overcome these issues and provide a sustainable solution for the long-term growth and development of the airline company. PESTEL Analysis Political Political trends are not much influential in stable governments, as compared to those countries which are highly unstable. Yet political factors do have some influence on business operations, even in stable governments. The airline deregulation act was passed in the year 1978 by the US Congress. According to this law, interstate flights were permitted. This gave a boost to the revenues generated by the airlines. Presently the laws related to the airline sector are not very stringent and time taking and this helps in smooth functioning as well as the establishment of brand and line extensions. The major political issues which have made the airline sector unstable is the rise in terrorist attacks in the past few years. A major break down was the terrorist attack on the Pentagon, which highly alerted the airline sector as a whole. Demand for air services reduced drastically after the incident and since then, security is one of the prime importance of airline operations. The cost for security and other advanced technological acquisitions have increased. Even though there has not been any attack after that, the political conditions remain unstable in the country which throws a question on the long-term strategic plans of the airline organization. Economical The economy of US is well developed and established. However, there has been a significant change after the economic recession. Consumer spending has decreased, due to difficult credit conditions, and oil prices have increased drastically. Less spending power has automatically decreased the traveling frequency of consumers affecting the overall revenue generation and profits earned by the sector. Moreover, the rising prices of jet fuel have added woes to the already stressed out airline industry. This price hike has affected the overall pattern of expenditure of the airline company. The company is spending more of operational costs and profits have seen a decline in recent years. Because of the growing recession, foreign investments have started to decline. Because of this, the government is not able to provide sufficient capital to the airline organizations in terms of loans and other government funds. This will negatively affect the long terms growth strategies of the airline organization (“Beating low-cost rivals”). Sociological Economic recession has turned consumers more sensitive towards price. After the recession, companies have seen a gradual shift from brand consciousness to price-sensitive consumers. ... Read More
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