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Southwest Airlines significantly differs from other companies in this field by implementing a model, which reduces the expenditures in many aspects and makes flights more affordable to the broad public. In addition, the company aims to develop and improve this strategy in the long run by attracting more passengers to travel without significant costs. Although this model sounds prospective and profitable, other airlines do not adjust their operations to this effective model and do not plan to do it.
The reason for it is the fact that these other airlines are intended to serve customers of other income and values. As for Southwest Airlines, its potential clients imply people of low income or people, who are willing to save money on transporting from one point to another (Ren, 2020). Their priority is reaching their destination with the best possible price regardless of conditions, or they will be satisfied with economy class service. However, there are customers, who appreciate comfort, and it appears to be the major value for them. These people may have specific health problems and need additional attention from flight attendants or special conditions. In addition, it may involve celebrities, who adhere to privacy while traveling somewhere. These categories of customers are ready to pay more money in order to fly in comfortable conditions or receive premium service. In other words, companies have a different targeted audience, and for this reason, there is not a necessity to change business models.
However, it should be mentioned that Southwest Airlines encounter some risks on the market. Positioning itself as a low-cost option, the company has to maintain an appropriate level of prices in accordance with the prices of competitors (Asahi & Murakami, 2017). Therefore, there is a risk of receiving low revenue or do not have it at all. In addition, Southwest Airlines cannot cancel a flight even though only half of the tickets are sold, which also threatens its profit.
As every company during economic crises, Southwest Airlines is highly likely to lose part of its usual revenue, though it may appear to be relatively resistant. During economic hardships, the average income of the population decreases, so they will probably adhere to tickets of low prices. In case some companies attempt to copy Southwest Airlines, the business may win the competition via its authority and stable quality of service (Speta, 2016). Therefore, the company will be prosperous in the long run.
References
Asahi, R. & Murakami, H. (2017). Effects of Southwest Airlines’ entry and airport dominance.Journal of Air Transport Management, 64, 86-90. Web.
Ren, J. (2020). Fare impacts of Southwest Airlines: A comparison of nonstop and connecting flights.Journal of Air Transport Management, 84. Web.
Speta, J. B. (2016). Southwest Airlines, MCI, and Now Uber: Lessons for managing competitive entry into taxi markets. Transportation law journal, 32(2).
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