are some of the reasons that the Airline has stayed successful and has been able to survive the global economic problems that have befallen the aviation industry in recent times.
Southwest Airlines has continued to be successful due to good financial planning on the part of the company’s administration, which has ensured that the company has continued to grow steadily over a period of more than 30 years. Although Southwest provides low-cost airline transport, new customers may assume that the airline’s services might be less professional because of low training budgets or that the airline acquire cheaper facilities for lowering of operational costs. (Butler and Keller, 2000) This can prevent the more picky travelers from trying out the airline’s services and thus prevent the airline from getting business from these travelers. Although pickier customers would not mind paying lesser amounts for tickets, the customers will probably not be willing to endure any poor equipments or inadequate services.
Upon entering any new market or market sector the airline’s low fares usually stimulate demand at a fast rate. Although this stimulates higher a load factor, the airline has been able to handle increase in capacity through proper financial planning. In this light, some other airlines have been known to respond by dropping their own fares and further stimulating the total market.
The airline’s financial plan also caters to the financial needs of their employees, as they are known to pay their employees well. This translates into more success for the company, as well paid employees are usually happy employees, and would possess better company morale than the employees of their competitors. The airline has been using only one type of aircraft (Boeing 737) and this strategy was intended to keep maintenance costs low, as well as lower training costs too, because the pilots, engineers and flight attendants only have to undergo training for Boeing 737 airplanes.