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Southwest Airlines Co. (SWOT Analysis)

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“SWOT is an acronym for the internal Strengths and Weaknesses of a firm and the environmental Opportunities and Threats facing that firm. SWOT analysis is a widely used technique through which managers create a quick overview of a company’s strategic situation. The technique is based on the assumption that an effective strategy derives from a sound “fit” between a firm’s internal resources (strengths and weaknesses) and its external situation (opportunities and threats). A good fit maximizes a firm’s strengths and opportunities and minimizes its weaknesses and threats. Accurately applied, this simple assumption has powerful implications for the design of a successful strategy.”

Southwest Airlines Co.

Southwest Airlines (Southwest) is a domestic US airline that primarily provides point-to-point, low-fare services. The company operates only in the US. It is headquartered in Dallas, Texas and employs 34,378 people.

Strengths, Weaknesses, Opportunities and Threats (SWOT)

Location of Factor

TYPE OF FACTOR

Favorable

Unfavorable

Internal

Strengths

  • Firm operating strategy
  • Robust revenue growth
  • Strong fleet operations

Weaknesses

  • Weak performance of freight division
  • Heavy dependence on passenger revenues
  • Lower load factor

External

Opportunities

  • Accelerating US air freight sector
  • Strategic partnerships and agreements
  • Growth in US airlines industry

Threats

  • Rising aviation fuel prices
  • Intense competition
  • Economic slowdown in the US
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