Southwest Airlines - Market Analysis

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Market Analysis – Southwest Airlines What is the market structure for your good or service selected in Week Two? After almost thirty years of service, Southwest Airlines has emerged as one of the world's premier airlines. The Southwest approach to business and the industry at large have enabled the company to continue to grow at profit in times of true economic downturn. Presently, the market for air carriers is saturated and highly fragmented. Overcapacity has led the major United States airlines to compete with Southwest's low fare pricing strategy. However, due to the company's brand image of efficient and effective low fare service, Southwest has been able to ward off its competitors (e.g. Delta, United, and American Airlines) and maintain its position of market share leader in the United States. As the industry becomes increasingly commoditized and US demand slows, it is time for Southwest to consider global options so that it ensures its presence in the future, while maintaining profitability. Who are some of the major competitors? Southwest competes against many low-cost carriers or low-cost subsidiaries of larger carriers. Southwest's main low-cost carrier competitors are AirTran and JetBlue Airways. Its other competitors include American Airline, United and Delta. Because of its efficient cost-saving strategies, Southwest's 37-year streak of profitability is unmatched in the airline industry. Here is a little information about its major competitors: • AirTran Holdings - is one of America’s largest low-fare passenger airlines. The airline has managed to achieve low operating costs despite relying on a hub-and-spoke system, in which most of its flights originate and terminate at its hub in Atlanta, Georgia. • American Airlines - the second largest airline in the world based on available seat miles and revenue passenger miles. On an

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