Southwest Airlines Products, Pricing, & Channels Paper

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Southwest Airlines Products, Pricing, & Channels Paper

Southwest Airlines Product, Pricing, & Channels

Pricing Strategy Southwest Airlines’ uses an everyday low price, pricing model. The airline has built a reputation of being the cheapest major airline in the space. The cultivation of this very reputation is the reason behind the use of this pricing model. Southwest Airlines’ management wants the first thought people have when booking a flight to be “Southwest is the cheapest.” However, this does not mean Southwest works to have the cheapest airfare every day. What does this mean? Occasionally a traveler will find lower airfare with another carrier but on average Southwest will beat the other major airlines. Compare this to Walmart, it is possible to find an item Walmart sells for a lower price somewhere else but not often and not without considerable effort. Most people believe it is easier and cheaper to just shop at Walmart instead of hunting around for that occasional deal elsewhere. Continuing the everyday low price model is an important tenet of Southwest Airlines. Management has used this pricing model for the entire forty-three years history of the company and will continue to do so into the future. This pricing model can only be sustained by the company keeping the cost of doing business down. Some of the methods Southwest has employed to keep their overhead costs low include long term fuel price hedging, a simpler bag check and ticketing process which allows for faster loading times and a reduced number of employees needed. Southwest Airlines’ premier cost saving and efficiency measure is there use of only one airframe, Boeing’s 737-800. Use of one airframe allows cost saving when it comes to maintenance, pilot training and rest rotations.

Channels of Distribution Southwest Airlines only uses a few simple and straight forward…...

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