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    Final Bcom

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    The document discusses Southwest Airlines' plans to expand its operations internationally and domestically. It proposes expanding to Canada by negotiating deals with major Canadian airports starting in late 2017. It also discusses introducing first and business class fares as well as using third party travel sites to increase revenue. Budgets and timelines are provided for the proposed Canadian expansion and introducing higher fare classes. The impacts on investors, customers, and employees are outlined. Overall the document lays out Southwest's strategy to increase quantities sold and revenue streams through international growth and premium offerings.

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    Download as PPTX, PDF, TXT or read online from Scribd

    Final Bcom

    Uploaded by

    api-380186633
    23 views21 pages
    The document discusses Southwest Airlines' plans to expand its operations internationally and domestically. It proposes expanding to Canada by negotiating deals with major Canadian airports starting in late 2017. It also discusses introducing first and business class fares as well as using third party travel sites to increase revenue. Budgets and timelines are provided for the proposed Canadian expansion and introducing higher fare classes. The impacts on investors, customers, and employees are outlined. Overall the document lays out Southwest's strategy to increase quantities sold and revenue streams through international growth and premium offerings.

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    The document discusses Southwest Airlines' plans to expand its operations internationally and domestically. It proposes expanding to Canada by negotiating deals with major Canadian airports starting in late 2017. It also discusses introducing first and business class fares as well as using third party travel sites to increase revenue. Budgets and timelines are provided for the proposed Canadian expansion and introducing higher fare classes. The impacts on investors, customers, and employees are outlined. Overall the document lays out Southwest's strategy to increase quantities sold and revenue streams through international growth and premium offerings.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    23 views21 pages

    Final Bcom

    Uploaded by

    api-380186633
    The document discusses Southwest Airlines' plans to expand its operations internationally and domestically. It proposes expanding to Canada by negotiating deals with major Canadian airports starting in late 2017. It also discusses introducing first and business class fares as well as using third party travel sites to increase revenue. Budgets and timelines are provided for the proposed Canadian expansion and introducing higher fare classes. The impacts on investors, customers, and employees are outlined. Overall the document lays out Southwest's strategy to increase quantities sold and revenue streams through international growth and premium offerings.

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    You are on page 1of 21

    Duy Bui

    Yifeng Chen
    Sam Phillippe
    Annie Gilbreath
    Reece Weatherford
    Our Situation

    http://fortune.com/2015/09/23/southwest-airlines-business-travel/
    Ps and Qs

    Investors Customers Employees

    Price Goes Up Happy Unhappy Unhappy

    Quantity Goes Up Happy Happy Happy


    Ps and Qs

    Investors Customers Employees

    Price Goes Up Happy Unhappy Unhappy

    Quantity Goes Up Happy Happy Happy


    How can we increase quantities?
    What weve done: What we should do next:

    All-new reservation Expand our operations


    system to Canada
    Latest 737 model - the Offer first-class fares
    MAX 8 Sell with third party
    travel sites
    Investment = Opportunity
    Investment Opportunity

    Cost: $500 million Save company millions of dollars in


    loss due to system failure
    Training 20,000 employees
    Avoid canceling thousands of flights
    Undergoing months of testing
    Plan to recoup by 2020

    Expect a contribution of $200


    million in operating revenue in 2018
    The New & Improved Reservation System

    Improved fare Schedule variation


    flexibility

    Foreign currency
    IROPS automation &
    operation

    Electronic Miscellaneous
    Documents (EMDs) for
    ancillary services
    The 737-800 MAX

    14% 40% 16 500 200


    More fuel Quieter More miles in Aircraft on
    Added seats
    efficient engines range order
    The MAX-8 Effect
    Investors Customers Employees
    Lower fuel costs Quiet ride Reliable
    Increased Entertainment New technology
    customer Lower fares due Smooth
    retention to lower costs transition : 80%
    Lower New common parts
    maintenance destinations with current
    costs possible due to model
    greater range
    Get in contact with
    Expansion to Canada Oct.
    2017
    airports in each major
    Canadian hub

    Vancouver Toronto Decide which airports


    Dec. to negotiate deals
    Montreal 2017 with

    Negotiate contract
    with airports
    2018

    Budget:
    Timeline: Advertise Southwest
    $4,563,780 Nov. new flights to Canada
    1 year 2018
    (per airport)

    Source: google images


    Why offer First and Business Class?
    Privacy
    Network
    Services
    Company Policy
    How much are First and Business Class Fares?

    11.2x
    Class Price
    Economy $1,590
    Business $5,736
    Economy price (First Class)
    First $17,730

    3.6x
    Economy price (Business Class)
    First and Business Class Effect

    Investors Customers Employees


    Increase in More options First class
    revenue available seating when
    Expansion of Possible for flying standby
    market more people Opportunities
    to buy to increase
    salaries
    Take Advantage of Travel Sites
    Shareholder value/sales revenue ^^

    $89.6 27% of our ticket sales are online


    Take advantage to raise percentage

    billion through other vendors

    Competitive prices bring edge


    in third
    party ticket Small commission fee/competitive
    prices
    sales Benefits customers and shareholders
    Third party websites
    Channels for Communication
    Investors Customers Employees
    Send email once Announce through Keep them up to
    Canadian contracts have new advertising date throughout
    Expansion been negotiated campaign the process

    Send email once Advertising and Inform before the


    First and contracts have contracting with renovations began
    Business Class been negotiated travel heavy firms

    Send email once Will be notified Train ground


    Online contracts have when visiting personnel on new
    Marketing been negotiated booking sites booking avenue
    In Conclusion...
    CANADA

    RASM
    Revenue
    FIRST THIRD
    CLASS PARTIES
    BREAKDOWN
    CANADIAN BUDGET
    Fees per airport Per unit Total

    Fee per U.S. bound Passenger $2.09 $131,670.00

    Rate per international originating passenger $9.25 $582,750.00

    Common Use Counter $15.00 - $5.00 $5760.00

    Public Address System (per month/ line) $10.00 $3,600.00

    Destination fee per passenger $20.00 $2,520,000.00

    Annual Rental Rate $200.00 $720,000.00

    Max.Gate Cost $300,000.00 $600,000.00

    Total Costs per airport $4,563,780.00

    (Calculations for one airport)


    Budget for First and Business Class
    Budget for Marketing with Third Parties
    Delta Southwest

    Sample flight price $1019.60 $542.00

    Expedia price $924.70 -

    % Difference 9.3% -

    Cost to airline (1 fare) $94.90 $50.95 (expected)

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