The State Of Airline Industry After 2001

After 2001, economic, technologic, demographics, politics, and natural environmental changes affected Southwest Airlines and the entire airline business. A lot of those changes may be due to the terrorist attacks, the recession, and also because of the inadequacy of oil for fuel.

Economically, airlines operate at small profit margins, with a fleeting client base, these margins turned into cents per passenger, and actual profits earned solely by filling the airplanes. Airlines have had to cut prices and offer fewer flights to fill their airplanes with enough passengers to create a profit.

Technological advancement has allowed for safer flight and quicker processes like baggage loading and ticketing; but, there's an increased chance of delays because of computer errors. These systems are expensive, and implementation cuts the profit margins dramatically. Since the terrorist attacks, the number of customers has reached traditional levels, and airlines create most of their revenue on business professionals who buy tickets at the last minute. Due to the increasing price of fuel and alternative expenses, the ticketing prices have raised for these kinds of reservations. There has been a rise in government regulation of airport security and also the costs of fuel; however, they appear to have a negligible impact on the airline business on the books.

The scarceness of fuel and the push for eco-friendly processes has affected the airline business because of the pollution emitted by the jets. Around airports, the air is particularly unhealthy because landing and taking-off of planes produce tons of pollution. Southwest Airlines was able to react to changes in the business environment which helped it become a leading and growing company. In response to the low-profit margins, Southwest trained its cleaning staff members to have the plane ready in the least possible time for the next flight. Therefore, they can increase the number of flights and increase the total profits of the company. Also, to maintain low fuel prices, Southwest obtains futures contracts with fuel distributors. This enables the airline to be a lot of proactive in response to rising fuel charges and to discuss a price before a market price exists.

Southwest is additionally disreputable for permitting customers to choose their seat depending on their check-in time. Without the coordination of appointed seating, the airplane can move quickly and thereby increasing the number of flights. Southwest’s affordable strategy attracts business professionals moreover as customers on vacation.

To retain these customers, Southwest offers a frequent-flier program within which customers earn points for using their air services. These points will then be saved for a free flight. Southwest incorporates styles of measures to grow within the dynamic environment of the airline business