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Southwest Airlines Co.

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Nichole Clayton

on 8 July 2014

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Transcript of Southwest Airlines Co.

Kaley Braunsdorf
Nichole Clayton
Mary McMahon
Miranda Peretti

Madison, WI
Denver, CO
Atlanta, GA
$22,729,999.95
Completed the acquisition of AirTran
Experienced losses due to fuel hedging
Launch customer for Boeing 737 MAX
14 new destinations including Mexico, Dominican Republic, and Jamaica.

Revised Mission Statement
:
It is the mission of Southwest Airlines Co. to be the nation’s leading provider of efficient, effective, and fun air travel services through the continental United States. “Motivated by our passions and dedication to our triple bottom line of Performance, People, and Planet we aim to thrive. Southwest aspires to maintain a culture of consistent profitability performance, enthusiastic employees, respected customer service, active community involvement, and environmentally responsible decisions”

Projected revenue for 2013 is $17,693.21
Revenue
Total Value: 4.7 billion
Financial Worth
What's New?
Southwest in a Nutshell
Current Mission Statement:
The mission of Southwest Airlines is dedication to the highest quality of Customer Service delivered with a sense of warmth, friendliness, individual pride, and Company Spirit.
January 2013: Begin discussing Madison as possible destination

April 2013: Southwest research costs

July 2013: Negotiate price to enter Madison market.

October 2013: Executive planning committee will decide which routes are under performing

January 2014: EPC will determine which pilots and flight attendants will serve Madison flights.

April 2014: Make final decisions, inform pilots and flight attendants of new locations and prepare marketing campaign.

July 2014: Begin marketing campaign to advertise new destination

October 2014: Recruit Madison airport personnel 

January 2015: Implement strategy
Total Costs:
Popular travel destination

Demand for more flights from native Hawaiians

High median household income: $70,093

Passenger arrival and departure percentage change is positive

Hawaiian Airlines dominates the market; not a major competitor

Population increasing by 1.1%
Conflicting Boeing 737 aircraft capabilities

Regulation expenses for planes to fly over water

High cost of living expenses for employee relocation or salary

Low percent changes in total passengers arriving and departure

Cost rental fees, landing fees, airport fees, etc are all very high
Pro
Con
Pro/Con Analysis Honolulu, HI
Economy is ranked 12th strongest in the nation

Significant travel for US government

Strongly growing economy

Mean household income and per capita income above US average

Low cost of living, low minimum wage.

Passenger arrival and departure percentage change in positive.

1.5 million passengers use terminals every year
Milwaukee is only 75 miles away from Madison

Southwest’s name not yet established in MSN market

Not major airport

Delta currently dominates the DCRA market

Chicago O’Hare Airport 136 miles

Chicago Midway Airport 154 miles
Pro
Con
Pro/Con Analysis for Madison, WI
Control
(Southwest.com, 2011 One Report: Gary’s Message, 2012).
Overarching Strategy
Operating Profitability
Honolulu, HI
South Bend, IN
Myrtle Beach, SC
Savannah, GA
Madison, WI
Internally Financed
Boarding
Take off
Flight Instructions
In Flight Entertainment
Destination
Turbulence
Smooth Sailing
In Flight Service
Final Descent
Passenger Feedback
Landing

Itinerary
Heart of SWA
In A Nutshell
Finances
Strategy Overview
Final Location
Financing
Control
Timeline
Conclusion
Q&A
Final Conclusion
(Kelly, 2012, p. #78-81)
(U.S. Department of Transportation, 2011)
(U.S. Department of Transportation, 2011)
(U.S. Department of Transportation, 2011)
(U.S. Department of Transportation, 2011)
(U.S. Department of Transportation, 2011)
(B. McHenry, email, November 9, 2012)
(B. McHenry, email, November 9, 2012)
(B. McHenry, email, November 9, 2012)
(B. McHenry, email, November 9, 2012)
(B. McHenry, email, November 9, 2012)
(B. McHenry, email, November 9, 2012)
(B. McHenry, email, November 9, 2012)
(B. McHenry, email, November 9, 2012)
(Kelly, 2012, p. #81)
(Kelly, 2012, p. #78)
70%
22,729,999.95
Break Even Analysis
Total Cost:
_______________________________________________________
161.73
One-way Ticket:
=
140,542.88
(seats needed to be filled)
138 seats
x
x
4 flights
365 days
=
201,480
(seats available)
____________________________________________________________________
=
Current Strategies
Keeping costs low and decreasing debt
Continuing integration with AirTran
New Products and Services
Strategies Considered
Introduce ticket sales to travel websites
Improve perks offered to customers
Offer more direct flights to desired destinations
Expand to more locations within North America
Expand services to more domestic cities
Make better use of current assets
Pursue the preferences of SWA
Eliminate under-performing routes through break even analysis, traveler traffic, and assessment of local economies.
1. Where are they not?
2. Search popular destinations within U.S.
3. Compare travel traffic within airports
4. Asses economies and census data
5. Search popular attractions
Catchment Map
Industry Analysis
Slow market growth
Highly competitive
High costs and low profits
Q&A
Strategic Steps
Full transcript