Backgrounder

Southwest Airlines Co.

2702 Love Field Dr, Dallas, TX 75235

Phone: (214) 792-4000

Website: https://www.southwest.com

Communication Channels

Facebook: @SouthwestAir -  https://www.facebook.com/SouthwestAir

Instagram: @southwestair - https://www.instagram.com/southwestair/

LinkedIn: @SouthwestAirlines -  https://www.linkedin.com/company/southwest-airlines/

Snapchat: @southwestair - https://www.snapchat.com/add/southwestair

TikTok: @southwestair - https://www.tiktok.com/@southwestair

X: @SouthwestAir - https://x.com/SouthwestAir

YouTube: @SouthwestAir - https://www.youtube.com/@SouthwestAir

Management Team Members

Robert E. Jordan (President, Chief Executive Officer and Chairman of the Board of Directors)

Andrew Watterson (Chief Operating Officer)

Tom Doxey (Executive Vice President and Chief Financial Officer

Justin Jones (Executive Vice President Operations

Tony Roach (Executive Vice President Chief Customer and Brand Officer)

Client Information

Company Mission

Southwest Airlines is dedicated “to the highest quality of Customer Service delivered with a sense of warmth, friendliness, individual pride and Company Spirit.” (Peek, 2025) Southwest Airlines seeks “connect People to what’s important in their lives through friendly, reliable, and low-cost air travel” and promises to deliver “unmatched Hospitality” while “cherishing passionate loyalty among our People.” (Southwest Airlines , 2025)

Company History

Southwest Airlines was brainstormed in a San Antonio bar in 1967 with plans drawn up by Herb Kelleher and Rollin King on a cocktail napkin. The pair sought to connect Dallas, Houston and San Antonio. By solely operating in Texas, Southwest could fly under the radar of the Civil Aeronautics Board regulations and offer exceptionally low-ticket fairs to develop a clear competitive advantage. Several other airlines, Braniff, Trans Texas and Continental Airlines quickly flagged the matter and sued with the case reaching the Texas Supreme Court which ruled in favor of Southwest Airlines, then referred to as Air Southwest. In 1971, Air Southwest officially became Southwest Airlines with the purchasing of three Boeing 737-200s. Braniff and Texas International (formerly Trans Texas) still strived to halt Southwest Airlines before the Civil Aeronautics Board negated the complaints. On June 18, 1971, Southwest Airlines “flew its first flights with six roundtrips between Dallas and San Antonio and 12 roundtrips between Dallas and Houston” (Simple Flying Staff , 2022) with fares around $20 comparably to $126 in today’s value. Southwest Airlines continued to expand until the 9/11 terrorist attacks when they temporarily paused expansion but resumed in 2003 with its 60th destination addition of Philadelphia. By 2004, Southwest Airlines controlled a 400-plane fleet and by 2005 reached over a daily 3,000 flight mark. Seeking to expand internationally, Southwest Airlines instituted partnerships with WestJet and added New York-LaGuardia flights in 2009. Extending their market presence further, Southwest Airlines purchased all AirTran “outstanding common stalk” (Simple Flying Staff , 2022) and merged with the airline officially in 2011. After recovering from the COVID-19 restrictions and revenue loss, Southwest Airlines regained stability and continues to operate fiscally robust.

Client Description 

Products and Services

Southwest Airlines offers a variety of travel related products and services—flights, vacation and cruise packages, hotel and rental car bookings through their Getaways by Southwest, cargo transportation, a Rapid Rewards Credit Card, gift cards and Southwest Airlines apparel—within a wide price range. Their products and services are mainly available online or through their official Southwest Airlines app but can also be purchased and/or adjusted in person at any Southwest Airlines help desk within an airport. Southwest Airlines mainly offers domestic flights but also has direct flights to Mexico, Central America and the Caribbean including Aruba, Belize, Costa Rica, Cuba, the Dominican Republic and Jamaica. To further position themselves as an international airline, they have partnerships with Icelandair, China Airlines and EVA Air. (Southwest Airlines , 2025)

Southwest Airlines was built on a consumer-first model and has since been highly regarded for its exceptional customer service reinforced by premium employee benefits. According to J.D. Power, Newsweek, and USA Today Southwest Airlines is continuously highly ranked regarding customer service. (Peek, 2025) Southwest Airlines aims to wholeheartedly support its employees that way their customer service is genuine and heartfelt.  As one of the four major airlines in the US, Southwest Airlines is the only major but low-cost airline. (Peek, 2025) Southwest Airlines’ promotions mirror these main initiatives to maintain its competitive advantage. The airline was also one of the first major airlines to integrate their promotional strategies and customer service through social media, quickly developing platforms on Facebook, YouTube, then Twitter now X, Instagram and recently TikTok. Utilizing these platforms, Southwest Airlines continuously partners with travel blogs, influencers and deal sites to meet its consumers on their preferred channels. Southwest Airlines also implements more traditional advertising methods with television commercials and billboards to showcase its low-cost fares and rewards program. In addition to its main website, Southwest Airlines offers a comprehensive app that provides consumers with every offered service in one central, easy to navigate location. Further, Southwest Airlines consumers are highly urged to join Southwest’s Rapid Rewards program to earn “flight, accommodation and other travel-related services” to accumulate points which can be used to purchase additional services. (buildd, 2025)

Financial Summary

After 1971, Southwest Airlines became a publicly traded company and for the fiscal year 2024, recorded a $27.5 billion operating revenue which yielded a 5.3% increase since FY 2023. The company’s net income was reportedly $465 million with a $0.75 diluted share. In FY2024, Southwest Airlines “returned $680 million to shareholders through dividends and share repurchases,” (PR Newswire , 2025) and possessed a $9.7 billion cash position well covering its $6.7 billion in debt. (PR Newswire , 2025) Southwest Airlines carries many shareholders including the hedge fund Elliot Investment Management LP, Vanguard Fiduciary Trust Co., BlackRock Inc. and PRIMECAP Management Co, Fiduciary Trust Company International, State Street Corporation, T. Rowe Price International Ltd., Georde Capital Management LLC and JPMorgan Investment Management Inc. (MarketScreener, 2025)  

 
Industry Analysis

Industry Overview

The Unites States domestic aviation industry has 56 airlines but is essentially ruled by four major airlines including Southwest Airlines, Delta, American and United Airlines. Market share in this industry is drawn from revenue passenger miles (RPMs) and since November 2024, Southwest Airlines ranks third with a 17.3% market share and a $138 billion RPM. Southwest Airlines is accompanied by Delta Airlines in first with 17.8%, American Airlines in second with 17.5% and United Airlines in fourth with 16%. Since the 2008 financial crisis (Pallini, 2020), the industry has experienced several major merges further condensing the market, including Delta-Northwest in 2008, United-Continental in 2010, American-US Airways in 2013 (Bhutada, 2025) and Southwest-AirTran Airways in 2011. (Pallini, 2020)

Competitor Profile

As a price conscious airline, Southwest Airlines main budget-focused competitors are Delta, Spirit, American and Frontier Airlines. (Comparably , 2025) As an industry whole, Southwest Airlines positions itself against United, Alaska, JetBlue, Allegiant and Sun Country Airlines. (Consulting & Insights , 2025) In reference to price, services and consumers, Delta Airlines is Southwest Airline’s main competitor. Despite this, Southwest Airlines has a clear competitive distinction with its well-known elite customer service, lower costs and more flexible policies. Previously, Southwest Airlines further separated itself from its competitors with its “bags fly free” campaign allowing passengers to check up to two large bags for free and enforced a free-seating policy permitting passengers to choose their seat upon their A-B-C boarding. However, due to recent rising operational costs, Southwest Airlines has since repealed these policies and implemented the industry standard of charging for checked bags and assigned seating. While Southwest Airlines is highly regarded a low-cost option, Delta Airlines is revered as a more premium airline with first class, business class and premium economy options. Delta Airlines offers 290 flight destinations compared to Southwest Airlines’ 117. Delta Airlines possesses an 81.52% on-time reliability rate edging out Southwest Airlines’ 79.47% Despite the recent changes to Southwest Airlines’ bag policy, it remains the more financially sound choice with no same-day flight change fees, $0 cancellation fees and slightly less expensive pet and unaccompanied minor fees. (Sherman, 2025) With these similarities, brand loyalty plays a major role in where consumers conduct their business.

Consumer Analysis

There are two main consumers in the airline industry, leisure travelers and business travelers, with both sides mainly revolving around greater income individuals averagely aged 35-54. (Wawrzonkiewicz, 2023)Both consumer populations are motivated by overall experience, comfortability, customer service and most importantly, with recent economic trends, price. Comparably, leisure travelers focus more on price than timeliness while business travelers concentrate more on ease of travel with price still being a major factor. With this higher aged clientele, airlines are often implementing campaign strategies to attract younger populations to build brand loyalty early. Due to a nationwide trend of rising everyday costs, consumers are becoming more and more conscious of where they’re spending their money resulting in low-cost fare promotions to maintain a steady costumer purchase rate which evidentially favors Southwest Airlines and their low-cost brand recognition. (Airlines for America , 2025)

Problem Definition

Southwest Airlines has recently retracked their two-free checked bag policy and has begun charging $35 for the first bag and $45 for the second. Additionally, Southwest Airlines has also implemented assigned seating, essentially eradicating one of their main competitive advantages among their competitors. Without this clear differentiation, consumers’ attitude towards Southwest Airlines are changing along with their brand loyalty. The ensuing research will identify how consumers are feeling towards these recent changes.

Research Objectives

1.     Explore how consumers go about purchasing flights and travel related accomodations, e.g., Google Flights, TripAdvisor, vacation packages or travel agencies.

2.     Analyze how consumers are feeling about these new guidelines.

3.     Determine if these changes are prompting consumers to conduct business with alternate airlines.

Bibliography

Airlines for America . (2025). The Power of Choice . Retrieved from Airlines for America : https://www.airlines.org/the-power-of-choice/

Bhutada, G. (2025, March 7). Ranked: The Largest Airlines in the U.S. by Market Share . Retrieved from Visual Capitalist : https://www.visualcapitalist.com/ranked-the-largest-airlines-in-the-u-s-by-market-share

buildd. (2025). Southwest Marketing Strategy: Low Fares, Big Impact . Retrieved from buildd: https://buildd.co/marketing/southwest-marketing-strategy#

Comparably . (2025). Southwest Airlines Competitors . Retrieved from Comparably: https://www.comparably.com/companies/southwest-airlines/competitors

Consulting & Insights . (2025). Southwest Airlines Competitors . Retrieved from Consulting & Insights : https://www.consainsights.com/company-profile/southwest-airlines/competitors

MarketScreener. (2025). Southwest Airlines Co. . United States .

Pallini, T. (2020, March 21). The past 2 decades saw the number of major airlines in the US cut in half. See how consolidation in the 2000s left customers with fewer options as profits soared. Retrieved from Business Insider : https://www.businessinsider.com/airline-mergers-and-acquisitions-in-the-us-since-2000-2020-3

Peek, S. (2025, June 2). Southwest Airlines: A Case Study in Great Customer Service . Retrieved from business.com: https://www.business.com/articles/southwest-airlines-great-customer-service/#

PR Newswire . (2025, January 30). Southwest Airlines Reports Fourth Quarter and Full Year 2024 Results . Retrieved from PR Newswire : https://www.prnewswire.com/news-releases/southwest-airlines-reports-fourth-quarter-and-full-year-2024-results-302364072.html#:~:text=Fourth%20quarter%20and%20full%20year%20net%20income%20of%20$261%20million,the%20performance%20of%20our%20operation.

Sherman, T. (2025, June 10). Southwest vs. Delta: Which Airline Is Better? Retrieved from nerdwallet: https://www.nerdwallet.com/article/travel/southwest-vs-delta

Simple Flying Staff . (2022, June 5). The History of Southwest Airlines . Retrieved from Simple Flying : https://simpleflying.com/southwest-airlines-history/

Southwest Airlines . (2025). Retrieved from https://mobile.southwest.com/about-southwest/

Southwest Airlines Co. . (2021). 50 years. One Heart . Retrieved from https://southwest50.com/our-stories/pure-heart-the-evolution-of-the-southwest-corporate-logo/

Wawrzonkiewicz, D. (2023). Navigating Navigation: Assessing the Relationship Between Airline Elasticities and Price Setting. Retrieved from The People, Ideas, and Things Journal: https://pitjournal.unc.edu/2024/02/06/navigating-navigation-assessing-the-relationship-between-airline-elasticities-and-price-setting/#:~:text=Research%20presents%20that%20certain%20elasticities,the%20associated%20urgency%20to%20travel.