Cost-Efficient Operating Models in the Airline Industry: A Case Study of Southwest Airlines

Hanyu Zhang ()
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Hanyu Zhang: Beijing Royal School

A chapter in Proceedings of the 2025 International Conference on Financial Innovation and Marketing Management (FIMM 2025), 2025, pp 488-493 from Springer

Abstract: Abstract This paper examines the business model of low-cost carriers (LCCs), using Southwest Airlines as a case study. By analyzing Southwest Airlines’ operational strategies, this paper identifies key factors that have enabled the airline to maintain profitability and market position in the competitive airline industry, especially during the post-COVID-19 recovery period. A SWOT analysis shows the internal and external competitive environment of Southwest Airlines. The strengths lie in its operational efficiency and cost-control strategies, customer loyalty, and company culture, while its weaknesses include limited revenue diversification, lack of premium services, and dependence on a single aircraft type. The analysis also reveals emerging opportunities in growing demand for affordable air travel and AI-driven operational improvements. However, Southwest Airlines faces potential challenges from rising competition among LLCs, fuel price volatility, and uncertainties due to environmental regulations. These findings provide valuable insights for airlines seeking to improve their business models and maintaining profitability in a competitive industry.

Keywords: Low-Cost Carriers; Airline Industry; Southwest Airlines; SWOT Analysis (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:spr:advbcp:978-94-6463-874-5_57

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DOI: 10.2991/978-94-6463-874-5_57

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