In 2011, Southwest Airlines celebrated its 40th anniversary of providing low-fare, high quality commercial air service, in addition to its 39th consecutive year of annual profit, making it the only major carrier in the United States to consistently provide annual profits to its shareholders (Southwest Airlines Annual Report, 2011). Currently Southwest Airlines operates some 600 Boeing 737 aircraft, and provides domestic air service to over 72 cities in 39 states, with over 3400 flights daily.
With 142,000 employees and more than 500 branches worldwide, Costco focus on providing inexpensive product in big box. Many of its products are up to 50% cheaper compared to other stores such as Wal-mart and BJ Wholesale Ralphs. In 2008 Costco was ranked as the 14th most admired company in the United States (CNNMoney, 2008) Costco’s financial strength and diversification enables the company to maintain its strong market position in the industry. According to OneSource (2009), the company reported revenues of $72 billion in 2008, which was a 2% increase compared with $62 billion the previous year. According to the Costco Wholesale Corporation Company Profile (Datamonitor, 2009), 78.5% of total revenue comes from the United States, the company’s largest geographical market, it is an increase of 10.4% from 2007.
Its operations have also expanded massively in geographical coverage: in the current financial year, Ryan Air operated 288 routes across 21 countries using 12 European bases, and plans to more than double its fleet in the next 7 years (www.ryanair.com). By operating low-fares scheduled passenger airline serving short-haul, point-to-point routes largely in Europe from some 45 destination in airports across Europe. Ryanair was the first low-cost airline to operate in Europe (www.ryanair.com). By 2011 Ryan air operated approximately 1,550 scheduled short-haul flights per day serving approximately 160 airports largely throughout Europe. Ryan air growth also included the acqusition of some 30% interest shares in Aer Lingus in 2006 (www.ryanair.com).
It is critical for Classic Airlines to regain their industry-leading position in the market, increase revenue and profits, and create lasting relationships with customers. To do this, they must enter into the new realm of marketing to meet a growing demand from both competitors and customers for value and pricing. Describe the Situation “Classic Airlines is the world’s fifth largest airline. Classic Airlines commands a fleet of more than 375 jets that serve 240 cities with more than 2,300 daily flights. In the 25 years since its inception.
Financial Analysis of Southwest Airlines DeVry University ACCT304 February 18, 2012 Financial Analysis of Southwest Airlines Table of Contents Intro 3 Related Party Transaction 3 Assets 3 Liabilities 4 Trend in Assets and Liabilities 4 Cash Flow Statement 5 Investing Activities (largest) 5 Operating Activities (trend) 6 Income Statement 6 Net Income (trend) 7 Comprehensive Income 7 Common Stock 7 Separately Reported Items 8 Conclusion 9 Financial Analysis of Southwest Airlines Intro Southwest Airlines (NYSE: LUV) has been providing exemplary service for 40 years. It was established in 1971, and is now the nation’s largest carrier in terms of originating domestic passengers boarded serving 73 cities in 38 states (Southwest Investor Relations: Company Profile). On May 2, 2011, Southwest and AirTrans Airways merged, and now is in charge of its operations. It is known for its low-fares and no-fee baggage policy, but most importantly, they are known for having the best customer service records. “Southwest is one of the most honored airlines in the world known for its commitment to the triple bottom line of Performance, People, and Planet.” (Southwest Investor Relations: Company Profile).
after-flight services). 4. Globalization. The Atlanta-based airline is operating with a high degree of accuracy. Based on the case, "the plane was at the gate with commendable dispatch, the gate agent relieved him of his London boarding pass and London-to Frankfurt ticket and hustled him onto the plane minutes before the door closed".
As of 2005, Southwest operates in 62 major cities in 32 states across the country, with service to over 60 airports and more than 3000 flights daily. In the past 35 years, they have come to service 88.4 million customers. Additionally, a number of events have taken place that increased the value of the company. In 1977, Southwest Air was added to the New York Stock Exchange as “LUV,” to represent Dallas Love Airport, and stocks soared. SWA has shown consistent profits over other major airlines even through the devastation of the terrorist attacks in 2001.
Today it has nearly 400 Boeing 737 series of aircrafts and operates in more than 59 cities across America. In 2011, it completes 40 years of its existence. Its mission is to provide the customers with highest quality of personal services company. It has been able to sustain its profitability through the turbulent phase of post 9/11 period and current recessive economy even though the rest of the important airlines like United and Eastern were struggling to survive. After deregulation in 1978, the airline industry became highly competitive.
Southwest Airlines Case Analysis This case is about: Sustaining profitable growth in a highly competitive and regulated industry. Define the problem: Southwest needs to maintain profitable growth while maintaining their low cost / low fare differentiation strategy. Background: • Headquartered at Love Field in Dallas, TX • Southwest was incorporate on June 18, 1971 • Initial fleet of (3) Boeing 737 served only three Texas cities- Houston, Dallas, and San Antonio • Southwest has been profitable for 38 consecutive years • Southwest is the United States most successful low fare, high frequency, point to point carrier • Southwest operates more than 3400 flights per day making it the largest US carrier based on domestic passengers • Southwest has nearly 35,000 employees nationwide • Southwest is traded on the NYSE under the symbol “LUV” • Beginning in the fourth quarter 1976, Southwest paid its first of 138 consecutive quarterly dividends to our Shareholders • 2010 Financial Statistics o Net income $459 million o Total passengers carrier 88 million o Average passenger load factor: 79.3 percent o Total operating revenue: $12.1 billion • The Company's fleet has an average age of approximately 11.4 years. • The average aircraft trip length is 653 miles with an average duration of one hour and 55 minutes. • Southwest aircraft fly an average of 6 flights per day, or almost 12 hours and 30 minutes per • Performance- enhancing Blended Winglets have been added to the 737 fleet to improve performance and fuel Key Issue: Operating cost increases threaten Southwest’s low cost / low fare competitive advantage.
However, Southwest Airline also expand their business to long- distance domestic airline and international fight in recent years, and they successfully enter the new area with the low- price advantage. Section 2: External Analysis Southwest Airline is the 4st large airline company in United States, but it is the most profitable company. Even though after 9.11 terrorists attacked happened, Southwest still kept their airline business in a good position. And in 2011, when the U.S stock market decreased, Southwest Airline decided to buyback the stock , which shows the confident they had. However, Southwest Airline are affected by business related issues.