Impact of Airline Deregulation on Southwest Airlines Until 1978, commercial scheduled airline

Large airlines moved to a hub and spoke configuration that involved shorter average trips for planes, but increased travel time for consumers. Airlines began to try to differentiate themselves on price and service, and competition grew increasingly fierce.

One airline that came through deregulation stronger and more profitable than almost any other was Southwest Airlines. It existed as a regional carrier before deregulation, and used strategies of no-frills, short routes and efficient operations to succeed in the post-deregulation era. Close relationships with its labor unions enabled the company to operate under a low-cost structure that made it possible to reduce fares significantly as it entered new markets. Operating the same type of airplane (the Boeing 737) kept maintenance costs low. Other airlines have watched Southwest's success, and are now trying to emulate its strategy.

Founded in 1967 in Texas, Southwest Airlines has been known for having unconventional business practices, including female flight attendants who wore hot pants in the late 1970s. Its unconvent

. . .
to a hub airport (often Chicago or Dallas) and then onward to their destination. This resulted in shorter average flights, but increased total travel time for consumers as they had to fly through the hub regardless of their ultimate destination. Southwest offers point-to-point flights without the hub and spoke configuration, with the result that its planes spend less time on the ground than the aircraft of other carriers; since it uses only Boeing 737 aircraft, its maintenance costs are also lower than its competition's. Because Southwest's flights are generally an hour or less in length, the airline saves money by not having to serve meals. It has a liberal work rule arrangement with its unions, so productivity is high, and overall costs are low. For example, Southwest gets 672 hours per year on average from pilots versus 371 for American Airlines pilots, and 60 percent more passenger miles per flight attendant. These figures enabled the company to realize profits during years in which the industry as a whole was suffering. In addition, the company has a 70 percent average load factor in an industry that averages 63 percent, and operating costs per passenger mile are 22 percent less than the industry average. It has on
. . .

Some common words found in the essay are:
American Airlines, American TWA, United Airlines, Southwest Airlines, Los Angeles, , Chicago Dallas, Morris Air, Lake City, Southwest Southwest's, airline industry, southwest's success, regional carrier, costs low, hub spoke, load factor, morris air, industry average, load factor industry, spoke configuration, value line stock, stock reports december, company recently, reports december 24, line stock reports,
Approximate Word count = 2059
Approximate Pages = 8 (250 words per page)