Submitted by pgraber on March 21, 2005

Southwest Airlines is one of our nations largest domestic low-cost airlines and flies some 2900 flights a day, connecting fifty-nine cities in 31 states . The company began in Texas in 1971 with only four planes, and today operates over 415 Boeing 737s, employs over 32,000 people, is considered one of the most admired airline companies in the world. The company is publicly traded under the symbol "LUV" on the New York Stock Exchange. According to the Southwest website, the company carried 70.9 million customers in 2004 and generated operating revenue of approx. $6.5 billion

Central to how Southwest operates and executes its services is the company's Mission Statement. The statement is short and focused, but touches upon the company's commitment to customer service:

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

This statement defines the company and helps to shape how it services it customers and operates its business. According to its Customer Service Commitment - a document that essentially maps this mission to its services to customers - states that its mission 'highlights our desire to serve our Customers and gives us direction when we have to make service-related decisions . Southwest's customer-centric philosophy remains intertwined with everything they do.

Southwest currently serves 59 cities, 59 airports, and 31 states. The map below (courtesy of Southwest.com) highlights the areas of the United States where they maintain service. A quick glance at the map shows how the company focuses on high-air traffic areas.

As far as routes go, a majority of the company's routes are less than 1,250 miles, although they do provide coast-to-coast service between select cites. According to company information, "Southwest's average passenger airfare is $88.57, and the average passenger trip length is about 753 miles . This suggests that the company's most common routes fall between cities relatively close to one another, such as those within the US southwest, south and northeast.

The magic of Southwest has been the company's ability to innovate, serve customers, and still make a profit. They've done this by uniquely empowering their employees, serving airline customers with the safest, most on-time service, all while communicating the value of great service in an inviting, fun-loving fashion.

Target Audience and Customers
Southwest target customers are frequent air travelers who travel within the domestic United States and are looking for value-priced fares. Southwest customers are young- to middle-aged consumers who live in any of the fifty-nine cities the company currently services. They travel among the country's most densely populated areas, mostly short distances that average less than 1,000 miles. Beyond these basic travel characteristics, a Southwest customer is also savvy with technology, likes to plan trips well in advance, and will forego certain luxuries to save money on the price of fares. These types of customers also demand excellent service. These customer also travel frequently and as a result, are aware of 'what makes a good deal' as far as pricing is concerned. They are also loyal, and value incentives that this provides them. Once they learn a system that is working, they stick with it.

Southwest's Competitors
The success Southwest has had with its low-cost, full-service strategy has not gone unnoticed in the airline industry. As a result, many of Southwest's competitors are aggressively ramping up their efforts to duplicate their success. A number of established low-cost competitors are currently pressuring Southwest, as well as new low-cost spin-offs by major airline companies. Currently low cost competitors include AirTran, JetBlue, ValueJet, and ATA. As the major carriers introduce their low-cost options, these will also be direct competitors with Southwest. In addition to these airline companies, the automobile is also a direct competitor. Because Southwest's average consumer trip is relatively short, communicating the value that air-flight provides relative to ground travel is always a challenge.

Current Marketing Challenges
Like other airlines, Southwest is facing many challenges today. This include the terrorism, overall air traffic volume, the rise in fuel costs, and the labor environment. Of these, however, terrorism and its impact on airport security is of critical importance and effects how Southwest carries out it overall mission - to serve its customers. In this context, the company has begun to champion several initiatives that are enabling the company to continue to carry out its mission. Other factors also present challenges, like fuel costs - an emerging issue now - as well as increased travel volume . Since other carriers have to deal with these issues as well, how the company deals with them is critical.

But these factors aside, a major marketing challenge could be reacting to the changes in the airline industry that may occur in the coming months. According to the Business Travel Coalition (BTC), failing airline firms today "represent seventy-five percent of U.S. airline capacity . Although low-cost carriers like Southwest are profitable and growing, major carriers represent more than just consumer service; they are critical pieces of the U.S. transportation infrastructure which other industries depend upon. Their plight effects the entire industry.

Marketing Communications
Southwest utilizes many different types of media to communicate its low cost air travel fares and services. Throughout their history, Southwest has relied on a creative and leading edge messaging strategy to promote itself. While all airlines do this to a point, what makes Southwest unique is that they almost make a mockery of traditional, over-blown advertising. They present an image of a fun-loving, campy airline that customers will enjoy while they travel. It is not just about flying with Southwest - it's about making friends with them and enjoying the experience.

Beyond the overriding themes and non-traditional messages Southwest uses in its marketing, the company also is very effective in utilizing different forms of media to reinforce its brand. The company the first airline to establish a home page on the Internet, and today continues to lead the industry online - both in innovation and sales volume. Just recently, the company introduced 'Ding', a direct-to-desktop that delivers live fare updates. Southwest.com provides users a host of different tools that help them book their flights, as well as plan their trips.

Southwest airlines has traditionally been innovative, customer-centric and a creative thinker in the air travel industry. They have excelled at servicing their customers, providing on-time and safe travel, and continue to be committed to offering tools and services that US domestic travelers value.

Southwest Airlines - Fact sheet, Southwest.com, http://www.southwest.com/about_swa/press/factsheet.html

Southwest Airlines - Fact Sheet, Southwest.com, http://www.southwest.com/about_swa/press/factsheet.html#Stock

The Mission of Southwest Airlines, Southwest.com, http://www.southwest.com/about_swa/mission.html

Southwest Airlines Customer Service Commitment, Southwest.com, http://www.southwest.com/about_swa/customer_service_commitment/customer_...

Ibid
January 2005 Airline Crisis Statement, The Business Travel Coalition, BTC Urges Congress To Craft A National Air Transportation Policy, http://btcweb.biz/01-05crisisstatement.htm

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