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桓溺徒域虾碘持列翰声茁颠赎陌邪详伶输含沃秋以先爱熊戈任瑚达雏襄臂西南 charge the lowest possible fare that still enables the airline to make a profit.
They think that there competition is with automobiles.
Southwest must keep its operating cost to the bare minimum.
These fares would not be sustainable unless it is supported by a high passenger load factor
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Operation Simple
It offers a single class, open seating, and no meals. Its aircraft fleet consists only of one type -- the Boeing 737 -- to minimize training and maintenance costs.
Run its own reservation system, and sells a significant portion of reservations through its Web site.
It can cut costs in the customer service
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Profit Analysis
Analyzed viability of increasing profits by reducing airfares 20%
Investigated a SWA high volume route for this analysis (LA / Oakland)
Current route demographics:
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Current SWA Costs
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Costs
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Revenues & Profit
Max Profit Point
Max profit point realized with a 15% reduction in ticket price
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Cost vs. Revenue vs. Profit
TC
Profit
TR
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PROMOTION
Rapid reward offer
Annual education travel program
Special offers
Celebrity endorsement
Promotional partners
Commercial Ads
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Rapid Reward Offer
Get one bonus credit when you fly into or out of Minneapolis/St. Paul!
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