Southwest Airlines Analysis

Running Head : SOUTHWEST AIRLINE ANALYSIS

Southwest Airline Analysis

[Author]

[University]

Currently , the U .S . Airline Industry starts to regain itself from the damages brought by the World Trade Center Bombing in 2001 (Bachman 2006 . The number of airline passengers starts to increase as the trust ' of the passengers to the security level of various international and domestic airports in the US has been revived which enables the airline companies including Southwest Airlines to once again receive profits from their operations

With the increase in the demand of airline passengers

in the market , I believe that it is best for the Southwest Airlines to increase their investment to further improve their revenue inflow . Although this would costs much , but this strategy would bring benefits to the company in the long run through maximization of their profits . Moreover , since the U .S economy is again booming , there is an opportunity for the influx of great number of business trips in the market

By expanding the operation of Southwest Airlines , they would now be able to serve more customers and thus giving them more revenue Remember , that the quantity of customers is positively related to the of Southwest Airlines the number of customer would also increase which in turn raises the the increase in the operation of Southwest Airlines is tantamount to the increase of their first few years would not improve that much since they spend in increasing their operation . But in the long run , their net profit will increase and this would stabilize their financial condition

Moreover , with the good financial condition that they will have , there is a possibility for them to attract more investors (Grubbs-West , 2005 The price of their stocks would start to increase as an effect of the raise in the demand of stock investors . As we all know , having more stockholders would enable Southwest Airlines to have more funds to finance their operation or to further expand their business

Since they are the second largest in the airline industry , and the market is booming , it is really best for Southwest Airlines to expand their operation to gain more market dominance and influence to the market . Through this , together with other top airline companies in the market , Southwest Airline could act as Oligopolists ' to take advantage of their current market power and high demand from the airline passengers

With regards to the issue of merging with other companies , I think Southwest Airline should do this strategy if they do not have enough capital for expansion . But if there is other possible solution to back up their expansion plan , then , the company should give more priorities on it than with merging . The reason why merging is of least priority here , is due to the fact that it causes negative effects to the company One of these is the mismatch in the managerial component of Southwest Airline and the company where it will be merged . Another would be the fitness of the merging with the current policies being imposed...