Free Essay Sample: Weaknesses and Threats of Southwest Airline

Published: 2022-04-18 17:26:37
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Essay

Weakness: Negative comments about SWA on Social Media due to overbooking of flights

From a corporate perspective, a weakness is a characteristic of an organization that puts it at a disadvantage in comparison to its competitors (Widi Oetomo & Ardini, 2012). Through strategic management techniques like the SWOT analysis, many companies can identify their weaknesses and employ strategies to turn such weaknesses into opportunities.

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Overbooking of flights is a practice where airlines book passengers to more seats on a particular plane than they are available in the real sense. Mostly this is done to maximize profits in an event certain people who had previously booked the flight fail to show up (Pizam, 2017). In such a scenario, instead of a plane flying with an empty seat, another passenger can fill the space. However, a crisis occurs when all booked passengers turn up. In recent years, Southwest has received heavy criticism for overbooking its flights. Recently the airline has shown intentions to end flight overbooking following heavy criticism on the media. In the Airline business, overbooking is used to help an airline manage its seat capacity. The logic is there are many people who book flights but fail to show up. As such, it would be advisable that instead of entirely doing away with overbooking, invest more in research and technology to identify cost-effective strategies of overbooking that are customer friendly. For instance, the airline could carry out a campaign to encourage its clients to make early check-in through their phones or other online avenues. It could also ensure clients are quickly notified in case of an overbooking situation.

Threats: A possible decrease in business travel demand due to technology

On the other hand, threats are those elements found in the business environment that could cause trouble to the company. Threats can make the business go bankrupt.

An example of a threat facing Southwest Airline is the possible decrease in business travel demand due to technology. The growth of the internet and other ICT channels including, mobile phones, and video calls have reduced the need for business people to travel distances to make business meetings or transactions. From the comfort of their seats, business executives can address a board meeting from far distances via the internet. On the part of the airlines, this has become a major threat that has seen a decline in the number of their former clients who earlier used to travel for business.

Southwest Airline could counter this by employing various strategies. For instance, the company could intensify its marketing to attract more potential clients to replace the void left by such former clients. Also, the company could turn more focus on growing the other side of its clientele that mostly travels for holiday and tour purposes. This could be through innovative ways like giving attractive flight packages and incentives as well as competitive tickets pricing (Gerardi & Shapiro, 2007). Alternatively, Southwesst Arline could invest more in the cargo part of the industry.

Reference

Gerardi, K., & Shapiro, A. (2007). The Effects of Competition on Price Dispersion in the Airline

Industry: A Panel Analysis. SSRN Electronic Journal. http://dx.doi.org/10.2139/ssrn.1013385

Widi Oetomo, H., & Ardini, L. (2012). SWOT ANALYSIS IN STRATEGIC MANAGEMENT:

A CASE STUDY AT PURABAYA BUS STATION. Journal Of Economics, Business, And Accountancy | Ventura, 15(2), 171. http://dx.doi.org/10.14414/jebav.v15i2.73Pizam, A. (2017). The practice of overbooking: Lessons learned from United Airlines flight

3411. International Journal Of Hospitality Management, 64, 94-95. http://dx.doi.org/10.1016/j.ijhm.2017.05.005

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