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Southwest Swot

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FINANCIAL ANALYSIS: Southwest Airlines

EXECUTIVE SUMMARY:

Southwest Airlines (NYSE: LUV), a major US airline, established in 1967, based out of Dallas, Texas principally operates a point-to-point rather than a hub-and-spoke service. Southwest is the nation's largest carrier in terms of originating domestic passengers boarded, boarding in excess of 100 million passengers each year. The airline also operates the largest fleet of Boeing aircraft in the world.
2013 was Southwest’s 41st consecutive profitable year earning $754 million in net income. Using a model of selecting the most profitable point-to-point routes and operating them efficiently and with great customer service, Southwest has been able to sustain solid growth year after year. Currently the airline serves 93 destinations in 40 states, the District of Columbia, the Commonwealth of Puerto Rico, and five near-international countries, producing annual revenues of over $17.7 billion dollars.
As Southwest continues expanding, including the ongoing integration of AirTran’s operations, it is important that they maintain the low cost structure that has made them so successful in the past. As larger and more congested destinations are added to Southwest’s routes, they must focus on customer service as the on-time arrivals and other metrics may be impacted, and they cannot afford to lose market share. Furthermore, if Southwest is to remain profitable, they must adapt AirTran to the point-to-point strategy. Additionally, in order to protect from volatile fuel prices, it would be prudent to expand the fuel-efficiency of the fleet by capitalizing on Boeing’s most recent advances. Southwest must also maintain its position as the ‚hassle-free low-cost carrier. These strategies, combined with a continued dedication to customer service, will allow Southwest to maintain, and even expand, its market position in…...

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