A 6 page paper providing a SWOT analysis and strategy implementation and evaluation plan for Southwest Airlines after experiencing its first losing quarter in 17 years. The paper recommends that the airline increase its airfreight business and develop new business relationships with new-breed travel agents. Strengthening weaker areas while maintaining the Southwest climate and culture is the challenge, but one Southwest has risen to in the past. Bibliography lists 6 sources.
in February 2005 that in 2004 the company "posted a profit for its 33rd consecutive year, and also extended its number of consecutive profitable quarters to 59" (Southwest Airlines Form
10-K, 2006; p. 12). Further, "Southwests 2005 profit was $548 million, representing a 75.1% increase compared to our 2004 profit of $313 million" (Southwest Airlines Form 10-K, 2006; p.
12). As has been the case throughout much of Southwests history, it managed this feat through excellent and solid management and still has not experienced a losing year.
Its string of profitable quarters ended in 2008, however, when it posted a loss for the third quarter (Pae, 2008). Southwest will need to capitalize on its traditional strengths
even more effectively during the next five years. SWOT Analysis Internal Factors Strengths * Extremely strong operating strategy * Favorable revenue growth * Strong fleet operations (Southwest Airlines Co., 2008)
Weaknesses * "Weak performance of freight division" (Southwest Airlines Co., 2008; p. 5) * Heavy dependence on continued passenger revenues * Diminished load factor compared to competitors (Southwest Airlines Co.,
2008) External Factors Opportunities * Increasing the revenue contributions of the freight sector (Southwest Airlines Co., 2008) * Alliances and partnerships * Continued growth in the US airline industry (Southwest
Airlines Co., 2008) Threats * Uncertainty in fuel prices * Intense competition and competitors concessions gained in bankruptcy * Economic slowdown in the US (Southwest Airlines Co., 2008) Southwest Airlines
Predicament Without the benefit of its prescient hedging activities in the past allowing it currently to buy fuel at prices far below market
price, Southwest would have experienced its first losing quarter in 2004 and perhaps a losing year as well (Gimbel, 2005). The economy has