Southwest Airlines Business Model
Southwest Airlines Business Model. Southwest Airlines has achieved tremendous growth since its inception. Southwest is known for its unique business model. Unlike other airlines, Southwest focuses on efficient operations and low airfares. The unique low-cost model has made Southwest one of the largest airlines in the United States. Southwest Airlines has a customer-focused business model that offers affordable and efficient flights from point to point.
Southwest Airline’s Product/Service Model and Target Market
Southwest Airline’s business model focuses on low-cost and on time travel (Akamavi, Mohamed, Pellmann, & Xu, 2015). The focus on commuter benefits has seen Southwest Airlines become one of the best airline companies in the industry. While other airlines focus on comfort and amenities, Southwest’s model seeks to provide cheap and quick flights from one place to the other. Non-essential features have been removed from the Southwest’s flights to keep the price low. There are no first class seating options, seats aren’t assigned to a customer and in-flight meals have been eliminated. However, travellers are given the option of value added features such as Wi-Fi connection and select seating.
Southwest Airlines Business Model:Southwest’s Pricing Strategy
The airline’s pricing strategy is based on its positioning as a low cost airline (Akamav et al, 2015). By positioning the company as a budget airline, southwest focuses on maintaining their prices lower than their competitors. To maintain the low prices, Southwest eliminates the non-essential features such as serving meals and having first class and business spaces. Additionally, southwest reduces maintenance and operation costs by owning only one type of plane. Southwest’s pricing strategy involves offering more for the price while remaining cheaper than their competitors.
The Future of Southwest Airlines
Southwest Airlines can continue to thrive as a low cost airline through tough economic times and increased competition. Currently, the airline is a step ahead of their competitors. Southwest enjoys a large customer base and most of its customers are loyal to the brand. Additionally, there will always be a market for the lowest price in an industry. In fact, Southwest will continue to enjoy a large customer base in tough economic times because during such times, people go for the lowest prices available.