Threats to Southwest Airlines

Paper Summary:

This paper discusses threats to the airline industry as a whole and to Southwest Airlines in particular. It analyzes the reasons for the threats and discusses how Southwest Airlines can combat those threats. The paper then looks at the increased opportunities that exist for Southwest Airlines, particularly due to technological advancements in the industry.

Table of Contents:
Introduction
Rising Fuel Prices: How Southwest Airlines can Use Technology to Lower Production Costs

From the Paper:

"In conclusion, Southwest Airlines is within an industry that is now facing a significant amount of threats - some are economic, and some are structural. Fuel prices happens to be an issue that is in both areas, hence it is not easily rectified, however, technological advancements provide the necessary prerequisite to deal with this problem in a rather efficient way, by providing the necessary tools, to increase supply and simultaneous use less fuel, which lowers the input cost. Southwest Airlines has a successful model that uses a low pricing mechanism to retain and attract customers. Increasing fuel costs is a threat to this model, as such there has to be a remedy in place to alleviate the negative externalities associated with this. The use of technology is the optimal recommendation, with added benefits in other areas, which will help Southwest Airlines to regain efficiency."

Sample of Sources Used:

• McConnell, C. and Brue, S. 2005, Macroeconomics 16th Edition. New York: McGraw-Hill.
• McConnell, C., Brue, S., and Barbiero, T. 2002, Macroeconomics 9th Canadian Edition. Toronto: McGraw-Hill.
• Miller, R. 2006, Economics Today: The Micro View 13th Edition. New York, Pearson Publishers.
• Oldham, J. 2007, "Landing of Airbus 380 Jet at LAX Should be Huge". L.A. Times, March 18, 2007. Available at http://travel.latimes.com/articles/la-trw-airbus18mar18

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