Essay Title: 

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April 2, 2016 | Author: | Posted in investment, mathematics and economics

Southwest Airlines , Inc , based in Dallas , Texas , is a low-fare airline in the United States . It is the third-largest airline in the world by number of passengers carried and the largest in the United States by number of passengers carried domestically . Its reputation for a laid-back atmosphere and low prices have made it an icon of pop culture

In early 1971 , Air Southwest changed its name to Southwest Airlines , and the first flight was on June 18 , 1971 . The rest of 1971 and 1972 saw operating losses . One of the four aircraft was [banner_entry_middle]

sold to Frontier Airlines of Denver and the proceeds used to make payroll and cover other expenses . Southwest continued to operate a schedule predicated on 4 aircraft but using only 3 , and in so doing the “ten minute turn ” was born , and was the standard ground time for many years . Southwest turned its first annual profit in 1973 , and has done so every year since — a record unmatched in commercial airline industry history . Southwest has used financial techniques to bolster its profitability and counteract many of the fiscal disadvantages of operating an airline

The background was the home base of Southwest Airlines – the Airport Dallas Love Field . Since it is much more closely situated to the Texan metropolis than the 1974 opened Mega-Airport Dallas Fort Worth , this advantage soon became the most important sales argument . While Love Field could be reached in a bit more than quarter of an hour from Downtown Dallas , it takes up to an hour to get to the international airport during rush hour . It was initially planned to close the old Love Field airport , as soon as the new one was opened . But after passing through all the official channels , Southwest was able to achieve that all Texan inland flights and all those into the directly adjoining states were still allowed to take off from here

From the beginning Southwest flew according to two important principles which were later significant for its success : tariffs were structured simply and very low – during the day a one-way ticket cost initially 20 , later 26 . During the evenings and nights the one-hour lasting flights within the Texan city triangle cost 10 , later 13 . Apart from this Southwest achieved records as far as the turn around time was concerned : in 1972 the company gave itself only 10 minutes for turn around . Even today the Texans are far below half of the industry ‘s usual time with 20 minutes . After initial losses , Southwest Airlines were in the black in their second full year of business in 1973 . Half a million passengers were being transported with only three aircraft

The success and profitability of Southwest ‘s business model led to a common trend being named after the company : The Southwest Effect . Since Southwest ‘s original mission in Texas was to make it less expensive than driving between two points (in the early 1970s , during the first major energy cost crisis in the U .S , they developed a template… [banner_entry_footer]


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