Economic Structural and Competitive Characteristics of Southwest Airlines Company

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Established in 1966, Southwest Airlines experienced a gradual growth period marred by court battles regarding route operation and other logistics from other competitors. The company offers domestic flights, to which tickets in the earlier days were only one way. Given its small market share during the period prior to deregulation, the company’s profits remained low. However, it was able to provide quality services to travelers, majority of who were businesspersons, choosing not to compete with other airline companies on fares but with other forms of transport, especially land transport (Gittell, 2003). In a bid to attract more customers, the company through advertisement adopted humorous slogans. For instance, the slogan ‘Love is still our field’ resonated well with customers during the earlier years of the airline’s operation and played a critical role in boosting its brand awareness not only in Boston and Dallas but also across the nation.
The period spanning 1971to 1978 saw the company expand its city-service network within Texas, an achievement that was the precursor to the introduction of inter-state services in 1978. The airline had an efficient management structure that was responsible for its success. Gittell further notes that Herb’s leadership that was immensely exceptional, the airlines’ cultural evolution that made it possible to accommodate diverse aspects, incorporation of a point-to-point network that made it have a quick turnaround, as well as efficient coordination of air travel services, were crucial to the success of the company.
The deregulation of the airline service industry gave a new breath of life not only to Southwest Airline but also to the entire sector. The government regulatory agency, the CAB, hadbecome highly inefficient, and the impact of its rigid system coupled with the oil crisis of the early ‘70s made airline industries to opt for better operating procedures.