Southwest Airlines' Cost Optimization to Create an Attractive Price Case Study

southwestward Airlines Cost Optimization to Create an Attractive price for Economy Class Travelers - Case Study ExampleThere are many factors which have helped southwestward Airlines in its survival and success. This essay attempts to outline those factors and strategies on the basis of the by-line parameters Financial Planning, Financial control, Costing, termination making.Financial planning has played a vital role in growing its business. The correct timing of its decisions has make a huge difference in increasing market capitalization (Sims, 68). Southwest Airline has gained a further advantage by packing more seats into the aircraft which increase the seat kilometer receipts generated per block hour.Instead of buying more jets to deal with its growing business, Southwest planned and got better deals on the lease. so it paid substantially less per block hour for lease rental, than other carriers. Southwest has implemented its pecuniary planning in such a way that low fare s when combined with high frequencies and excellent promptness have resulted in an increase in its revenues. Southwest plans its finances very efficiently. It hires new pilots with ten eld contract and motivates them by offering a share in profits. This is an example of astute planning. It means that if Southwest was making losses at any particular time then the losses can be shared with the pilots. This strategy also makes the staff much more accountable. Another important aspect of financial planning was operating on low distance routes and targeting of road passengers.Southwest plans its expenditure very efficiently and effectively. The guest service strategy of providing a full meal was costly in two ways. One, it increases the per unit be and secondly more staff is required to provide the service. Southwests plan of not following this trend has saved it the cost of food as well as the number of staff employed. In other airways, when six to eight employees per flight were r equired, southwest managed to function with only four. This kind of planning was life-and-death for decreasing the costs and increasing the revenues.