Making use of its point to point flights, the airlines gives regular direct flights for the short distances, for example from Los Angeles to Las Vegas, etc. In 2008, Southwest served 438 nonstop city pairs, in 64 cities in 32 states and carried over 101.9 million passengers, the most of any domestic carrier. As the low-fare leader, Southwest's average ticket price was $119.16 in 2008, up from $106.60 in 2007 compared to an average price of $139.40 in 2008 at its closest competitor, Jet Blue.
The Southwest Airlines has a focused strategy, it has defined target market and does not scramble its efforts to gain benefits from all over. Instead, it has selected a niche segment, to cater their needs better.
Target market - the market that the company focuses are the low cost and value conscious travellers, with no frills but a comfy journey. It focuses on customers that have to travel short haul, these include passengers that travel for their business, are time conscious as well and also include residential customers that prefer travelling for vacations and seeking best value for their spending.
Product offering - With focused target market, Southwest has a differentiated product (service) offering, it describes its service offering as short haul, low fare, high frequency, and a point to point carrier in the United States' airline industry. The informal and casual but dignified journey experience is the whole package. It does not provide meals, a pack of peanuts would do, there are no assigned places, no transfer of luggage and no class differentiation either, in form of first class or the business class etc. Whilst the average cost of a meal serve per passenger in the airlines industry is approximately $5, the cost for Southwest airlines is around 20 cents (Rose, 1999)3.
Pricing structure - since Southwest Airlines distinguishes itself as the low fare