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Introduction

Southwest Airlines Co. is
a major airline company that is based in the United States having been
established in 1967. The company has grown over the years and become one of the
leading airline companies in the country, as well as the south American region.
Its services have developed across the board, nationally and internationally. The
company is well known for its low-cost options to customers in the airline
markets and its strive for unmatched customer services. A focus into the
company`s business strategy and corporate management is essential because it
will highlight how the company operates. Moreover, this paper will focus on
different aspects such as the business environment, sustainability, internal
resources, communication, company image, response, impact, and external
resources. All these factors have played a considerable role towards Southwest
Airlines` growth over the years.

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Business
Environment

Governmental actions and
political approaches will have a negative impact on the operations of Southwest
Airlines. For instance, stringent government regulations such as heavy taxes on
commercial airlines will considerably lead to limited profits, and even loses. The
government has introduced new tax regulations that have heightened the tax
rates paid by airlines. This submerges the current profits made by the low-cost
service offered by Southwest Airlines. In other words, airline companies such
as the Southwest Airlines that offer low-cost services to their customers are
likely to decline because of the costs of operation. In addition, different
states have imposed different taxes to airlines and this could be a
disadvantage to airlines such as the Southwest Airlines operating across the
nation, as well as internationally. With high taxes and ever-rising operations
costs, Southwest Airlines stands threatened and its decline slowly approaching.

Modernization of fleets
is another government action through the International Civil Aviation
Organization (ICAO) and IATA. This has forced the company to spend millions of
dollars in modernizing its aircrafts in order to meet the new regulations. The
policy was effected as an approach by global concern regarding the emission
levels from airline companies. Therefore, emission reduction rates by aircrafts
was approached as an aspect that has yielded considerable impacts to global
warming and other issues. Modern engines for new aircrafts as well as the old
ones among all airlines has been initiated by the government. Such approaches
will lead to the company`s operations costs increasing rapidly and beyond its
financial prospects. Increased operational costs from modernization of fleets
will see the company endure shrinking profits.

Sustainability

The government`s approach
on implementing new policies and regulations to the airline industry in the
United States will have different impacts. For instance, increasing tax rates
on the airline industry will have considerable effects on Southwest Airlines
towards its sustainability. It is imperative to note that our company, just
like any company has its objectives and goals. These will be affected
considering that much of the funds have endured taxation. For instance, one of
our objective was to venture into the Brazilian airline market, and this will
not be achieved because of the heightened tax rates that the government has
enacted on international operations. Equally, the cost of operation will be
high and we might be forced to shutdown some of our operations, especially
those that involve states that charge high taxes. This is to ensure that we are
able to sustain our business, as well as meeting our customers expectations.

In addition, the
enactment of the modernization of fleet by airlines will see Southwest Airlines
pend millions of dollars towards meeting the new demands. At Southwest
Airlines, we are committed towards conserving and mitigating our environment.
Therefore, this approach will be received with positivity considering the sensitivity
of emission reductions. Therefore, our company has ventured into a contract
with Red Rock Biofuels to purchase 2.9 million gallons of low carbon which is
renewable annually. With these prospects, we have the common goal of conserving
our environment and ensuring low emission reductions from our aircrafts. However,
the regulation by the International Council on Clean Transportation (ICCT) will
set Southwest Airlines financially unstable because of the funds that will be
channeled towards purchasing new engines and modernizing its fleets.

Internal
Resources

Southwest Airlines has
approached different strategies towards addressing increased tax rates and
modernization of its aircrafts. For instance, our company has established the aircraft
standards project that has an aim of ensuring all its aircraft meet the quality
regulations standards set by the government. It is imperative to note that
coming up with this project is of significant value because our company looks
forwards to venturing into different airline markets. Therefore, these
standards will ensure that our company is not in conflict with the regulatory
institutions. The regulations standards project has so far purchased 100
engines for older aircrafts that were operating in Southern America. Through
the company`s standards project, modernization of the old aircrafts has been
effectively implemented. However, there lies a challenge on the high operations
cost of maintaining the aircrafts.

Southwest Airlines is
adequately prepared to address the government requirements of modernizing its
fleet. There are other business project teams that are available to respond to
this challenge. They include the Aircraft Maintenance and Regulation project
that is aimed at meeting quality and considerable fleets for consumers. It is
imperative to note that there are different policies and regulations that have
been enacted by both the national and local governments regarding modernization
of fleets. Southwest Airlines has met these standards through investing much in
its aircrafts. On the other hand, there lies another threat as the company
ventures in expanding its operations. Security is a component that both the
national and local governments have expressed concern about. Therefore, the
government and the international security entities have enacted various
security measures such as heightened screening before the passenger’s board
with specific equipment. This equipment is set to cost the company a lot of
money. However, the company has tackled the threat through different
initiatives that are in place.

Communication

Regarding the issue on
modernizing our aircrafts, increased tax rates, and heightened security
regulations by the International Civil Aviation Organization (ICAO) and IATA, there
are different forms of communications that we have approached. For instance,
our stakeholders have been notified by phone calls and emails that have
explained all the regulations that have enforced by the international airlines
agencies and their impacts to Southwest Airlines. In addition, memos have been
prepared and circulated across shareholders and stakeholders in order to
describe how our operations are likely to ne altered by the new regulations on
security, modernizations of fleets, and increased tax by the International
Civil Aviation Organization (ICAO) and IATA. Our company`s communication system
is vast and entails many shareholders who will be affected by the introduction
of the new regulations and policies. Therefore, approaches such as memos to
stakeholders have been steered towards making desirable decisions to these
threats.

Another mode of
communication is the use of social media platforms such as Facebook, Twitter,
and Instagram to inform our customers and other shareholders regarding the new
policies and how they may affect our operations. For instance, our clients have
been notified on a slight increment on flight tickets due to the increased
operations coast. Moreover, our company has approached different media houses
such as the American Broadcasting Company in order to disseminate information
regarding the new regulations and how they will affect our operations in
different markets that our airline operates. Southwest Airlines has also made a
couple of public hearings with stakeholders regarding the perceived threats in
an approach of coming to a common ground on how to best address the issues. For
instance, on November 23rd 2017, a public hearing at the company`s
headquarters chaired by the company`s managing director focused on the impacts
and solutions to the high taxes that the government has imposed. Finally, the
use of radio and newspapers has yielded much in dissemination information about
our operations and new threats. However, Southwest Airlines has implemented
different programs on radio stations and different media houses that air at
different periods of the day from December 2017 to end of January 2018 with the
aim of keeping our stakeholders informed on the same.

Company
Image

The situation has brought
mixed feelings about Southwest Airlines. However, this is not only to our
company because the issue cuts across all other airline companies in the
country. However, the good thing is that it has brought a revolution to the
airline industry, an aspect that has been positively approached by our
stakeholders. However, there have been negative perceptions from our customers
regarding the standards and conditions of our fleet before the new regulations
were enacted. For instance, social media has propagated a considerable debate
on the airline industry in general with some debates depicting that Southwest
Airlines has entirely been operating on the old aircraft that are not worthy
for passenger transport. With the heated propaganda and mixed feelings, many
airlines have got themselves entangled in a mystery of distrust from their
customers, just like Southwest Airlines.

On the other hand,
stakeholders have also approached the issue of modernizing and heightening
security measures within Southwest Airlines as an essential prospect
considering the safety of the passengers. For instance, modernization of
aircrafts will ensure that passengers travel with comfort and safety guidelines,
a measure that is aimed at reducing number of air clashes. This has brought
excitement among stakeholders and have taken in the notion of increasing ticket
costs a bit to cater for the high taxes positively. With this in check,
Southwest Airlines is working on the negative approaches that have been painted
on its image such as propaganda on the quality of services provided. In the
beginning of December 2017, customers were given free flights to ten
destinations of our operation market in order to experience the new services
and the regulations passed. This was an approach to evaluate the response and experience
of the customers on the new service, and they all were highly satisfied about
it.

Response

The potential courses of
action to respond to the situation in the current macroeconomic and business
environment by Southwest Airlines entails different approaches. For instance,
there are different investors that have come to our aid such as American
Airlines that has greatly invested towards the modernization of our fleet. It
is imperative to note that the new regulations require our fleet to be 20 years
or younger. Therefore, American Airlines has substantially invested in our operations
through the purchase of engines and aircrafts that will be operational beginning
December 2017.

On the other hand, the
issue regarding security regulation has been approached by the stakeholders
through different perspectives. For instance, our company has contracted a
considerable security firm that will be responsible for security measures on
our operations. With up to standard equipment, Southwest Airlines will
effectively grow in the new market and foster profits within a short period.

Impact

The courses of action
that Airline will take will have both long-term and short-term impacts. For
instance, contracting the security firm that will have the obligation of
meeting the security standards set by the International Civil Aviation
Organization (ICAO) and IATA will have long-term impacts on our operations. It
is imperative to note that the security measure that our company has approached
is a prospect that will be of great significance to the development of the organization.
In addition, creating a reputable brand in the airline industry is an essential
objective that we have strived to achieve over the years. Through setting a strong
security measure that entails thorough screening of customers and operations in
different markets that our flights operate will equally set a positive tune for
our consumers.

Moreover, modernizing our
fleets will have a long-term impact to our organization. Purchase of new
engines and the maintenance cost required for the same will require large sums
of money. For these reasons, some investors such as the Americans Airlines have
ventured into our company. This will have a long-term effect, especially
following the loans that our company has taken in order to steer operations to
the required standards by International Civil Aviation Organization (ICAO) and
IATA.

External
Resources

The external resources of
Southwest Airlines include our customers. customers can be categorized into two
groups: leisure and business travelers. Leisure travelers include people
travelling to cities, families, and friends for vacation. These are individuals
that are price sensitive since they are using their discretionary income. In
addition, these customers are sensitive in other aspects such as income after
taxes and necessities. On the other hand, the business travelers are concerned
with convenience and fashion as they travel from one place to another.
Therefore, Southwest Airlines has adequately addressed these resources in its
operations.

The competitors form the
next external resources of Southwest Airlines. For instance, American Airlines
and Delta are some of the major competitors. In addition, there are other
commuter or feeder carriers that have offered our company competition over the
years, and these include United Express that offer services over short
distances. It is imperative to note that the commuter or feeder careers are
mostly extensions of major carriers such as the Atlantic Coast Airlines. Passenger
services are another element of Southwest Airlines` external resources.
National airlines such as Southwest Airlines provide long flights to its
customers. there are different services that offered to customers such as
frequent flier programs and inflight meals.

Conclusion

In conclusion, airline
companies such as the Southwest Airlines that offer low-cost services to their
customers are likely to decline because of the costs of operation. Increasing
tax rates on the airline industry will have considerable effects on Southwest
Airlines towards its sustainability. the enactment of the modernization of
fleet by airlines will see Southwest Airlines spend millions of dollars towards
meeting the new demands. At Southwest Airlines, we are committed towards
conserving and mitigating our environment. Our company has established the
aircraft standards project that has an aim of ensuring all its aircraft meet
the quality regulations standards set by the government. There lies another
threat as the company ventures in expanding its operations. Security is a component
that both the national and local governments have expressed concern about. There
have been negative perceptions from our customers regarding the standards and
conditions of our fleet before the new regulations were enacted. For instance,
social media has propagated a considerable debate on the airline industry in
general. However, stakeholders have also approached the issue of modernizing
and heightening security measures within Southwest Airlines as an essential
prospect considering the safety of the passengers.

 

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