A Case On: Presented By, Group - 6
A Case On: Presented By, Group - 6
A Case On: Presented By, Group - 6
Presented by,
Group - 6
Airlines Industry aftermath 9/11
• 20 % falloff in airline traffic in the Q4 of 2001.
• 1 lakh of the 5 lakhs employees in the industry was laid off.
• US carriers lost a combined $8 billion in 2001.
• But in Southwest Airlines – no flights were cut and no employees were laid
off.
• It had the lowest operating cost of any airlines and it had $1 billion in cash.
• In Q4, 2001 Southwest reported a profit of $63.5 million and a profit of
$511.1 million for the whole year.
• It remained profitable in 2002 though its eight biggest US rivals reported a
loss of more than $11 billion.
History of Southwest Airline
• Formed in 1966 as a low fare airline by Rollin King
• Business Concept – Attract passengers by flying convenient
schedules, get passengers to their destination on time, make sure
that they have a good experience, Charge fares competitive with
travel by automobile
• Rivalries were blocking Southwest from commencing operations by
filing cases against them but they won it with the help of Herb
Kelleher who had invested $10000
• Philosophy of Southwest – we do whatever we have to do to get the
job right
Gaining a Market foothold
• In June 1971, Southwest initiated its first flights