Southwest Airlines: A Brief Introduction
Based in Dallas, Texas, Southwest Airlines is the largest US-based airline with operations across 40 US states and some international destinations. Apart from its point to point service model, which is different from the hub and spoke model employed by other US-based airline businesses, it is also known for its affordable prices. The company uses only Boeing 737 aircraft in its fleet to manage fuel costs and keep operating expenses low.
Southwest Airlines is owned by Southwest Airlines Co. or simply Southwest. It started its operations in 1971 with just three Boeing aircraft. In 2018, it was the largest domestic carrier and carried the highest number of total passengers of all the airline businesses operating in the US. In 2018, it carried around 163.6 million passengers. While the US airline industry has grown highly competitive, tax burden and operational expenses require airline operators to focus on passenger safety and fuel efficiency (Annual Report, 2018).
|Company Name||Southwest Airlines Co.|
|Industry||US Airline Industry|
|Net Revenue (2018)||$21,965 million|
|Net Income (2018)||$2,465 million|
|Fleet Size||750 aircraft.|
|Passengers carried (2018)||163.6 million|
|Leading competitors||Delta, American, United, Jetblue, Skywest, Alaska, Spirit, Frontier, Republic.|
Delta Air Lines (NYSE: DAL) is a leading US-based airlines with its headquarters in Atlanta, Georgia. Delta is one of the leading competitors of Southwest Airlines. Based on DoT data, Delta carried more than 152 million passengers in 2018. Contrary to Southwest’s point to point services model, Delta has adopted a hub and spoke model. It has also entered into several international agreements and partnerships with other global airlines to serve its customers better. The other international airlines with which Delta has entered into joint ventures include Virgin Atlantic, Virgin Australia, AirFrance, KLM, Aeromexico, Korea Airlines and WestJet. Delta’s industry-leading network covers more than 300 destinations across more than 50 countries. Delta also offers more than 5,000 daily departures as well as around 15,000 affiliated departures. Founded in 1925, Delta has grown into one of the leading global airlines. In 2018, Delta’s operating revenue was $ 44,438 million (Delta form 10K 2018).
American Airlines is another leading US-based Airline company owned by American Airlines Group Inc (AAG). It is also a leading competitor of Southwest Airlines Co. Other subsidiaries of AAG include Envoy Aviation Group Inc. (Envoy), PSA Airlines, Inc. (PSA) and Piedmont Airlines, Inc. (Piedmont). The company has its headquarters at Fort Worth, Texas. AAG’s wholly-owned regional airline subsidiaries and third-party regional carriers together operate as American Eagle. Together, they operate nearly 6700 flights on a daily basis to 350 locations throughout 50 countries. AAG carried around 204 million passengers in 2018.
According to DoT data, American Airlines alone carried around 142 million passengers in 2018. As of December 31, 2018, the Group operated 956 mainline aircraft. Its regional subsidiaries and regional third part carriers also operated an additional 595 aircraft; the total number of aircraft operated by the group being 1551. American Airlines i9s also a founding member of the One World Alliance. The Alliance also includes British Airways, Cathay Pacific Airways, Finnair, Iberia, Japan Airlines, LATAM Airlines Group, Malaysia Airlines, Qantas Airways, Qatar Airways, Royal Jordanian, S7 Airlines and SriLankan Airlines. The total operating revenue of the American Airlines Group in 2018 was $44,541 million. The company employed around 128,900 people as of December 31, 2018 (Annual Report, 2018).
United Airlines, Inc. is the principal wholly-owned subsidiary of United Continental Holdings Inc. United is another leading competitor of Southwest Airlines and one of the largest airline companies based in the United States. According to DoT data, United Airlines carried around 113.2 million passengers in 2018 (enplaned passengers). United Airlines and United Express together operate around 4900 flights daily to 358 airports across five continents. In 2018, the two together operated around 1.7 million flights carrying around 158 million passengers.
United is also a founding member of the Star Alliance which provides its service to 195 countries through 26 member airlines.
During the third quarter of 2019, United Airlines operated 788 aircraft and United Express 560 aircraft. The net operating revenue of United Continental Holdings Inc for 2018 was $ 41,303 million and Net income $2,129 million. As of December 2018, UAL and its subsidiaries had 92,000 employees of which 23,193 were flight attendants (UAL Annual Report, 2018).
Jetblue is also one of the leading airline businesses based in the United States and one of the major competitors of Southwest Airlines. After its incorporation in Delaware in 1998, the company started its operations in 2000. Based on available seat miles or ASMs, it was the sixth-largest passenger carrier in the United States by the end of 2018. As of 2018, Jetblue carried more than 42 million passengers with roughly 100 daily flights and connected more than 105 destinations in America, the Caribbean, and Latin America. Jetblue employs more than 22000 people.
As of December 31, 2018, its fleet included 63 Airbus A321 aircraft, 130 Airbus A320 aircraft, and 60 Embraer E190 aircraft. Its net operating revenues for 2018 equaled $7.66 billion and net income $188 million (Jetblue Annual Report, 2018).
Skywest Airlines is another leading US-based airline company and one of the major competitors of Southwest Airlines. Skywest Inc is the holding company for both Skywest airlines and Skywest Leasing company. There are nearly 500 aircraft in the fleet of Skywest Airlines and according to DoT data, Skywest Airlines carried around 39 million passengers in 2018. Skywest operates more than 2300 daily flights and provides commercial flying services throughout various cities of North America. The network of Skywest connects more than 250 destinations.
In partnership with United Airlines, Delta Air Lines, American Airlines and Alaska Airlines, Southwest carries more than 40 million passengers every year. Skywest Airlines is based in St George Utah. As of December 31, 2018, the company employed around 15,900 employees. In 2018, the net operating revenues of Skywest Airlines Inc was $3,221.7 million and net income $280.4 million (Annual Report, 2018).
Alaska Airlines is also a leading competitor of Southwest Airlines and one of the major airline groups based in the United States. Alaska Airgroup, a Delaware Corporation incorporated in 1982, operates two airlines – Alaska and Horizon. Alaska Airlines was incorporated in 1937 in Alaska. Alaska Airgroup acquired Horizon Air in 1986 and Virgin Air in 2016. In 2018, Virgin America and Alaska merged into a single legal entity. However, Alaska and Horizon operate as two separate airlines.
Together with its regional partners, Alaska Airlines flies to 115 destinations with more than 1200 daily flights and an extensive flight network across the United States, Mexico, Canada, and Costa Rica. In 2018, the Alaska Airgroup carried around 46 million passengers. According to DoT data, Alaska Airlines alone carried more than 33.5 million passengers. Alaska Airgroup employed more than 23,000 people as of 2018. Its net operating revenue for 2018 was $ 8,264 million and net income $437 million (Alaska Annual Report, 2018).
Spirit Airlines is one of the leading Ultra-low Cost Carriers based in the United States. It is headquartered in Miramar, Florida. Spirit Airlines has a fleet of all Airbus flight models. It is also one of the most fuel-efficient fleets in the entire United States airline industry. Spirit operates more than 500 daily flights to 72 destinations across 62 countries including the United States, Latin America, and the Caribbean. Spirit Airlines was founded in 1964 as the ‘Clippert Trucking company’. It started its operations in 1990 and then it was renamed Spirit Airlines inc. in 1992. Spirit is also one of the leading competitors of Southwest Airlines. Ultra-low-cost Carriers have experienced very fast growth in the US airline industry over the last few years.
Spirit is one of the four leading Ultra-low-cost carriers in the United States aviation industry. According to the Department of Transportation data, Spirit carried 28.7 million passengers in 2018. The flight network of Spirit Airlines in 2018 included 279 markets with 72 airports in the USA, Latin America, and the Caribbean. The fleet of Spirit Airlines includes only Airbus A 320 family aircraft. This is done in order to achieve operational and cost advantages compared to other Airlines. By the end of 2018, Spirit Airlines had a fleet of 128 Airbus single-aisle aircraft. Spirit employed 7,110 people in 2018. The net operating revenue of spirit Airlines was $3,323 million in 2018. Its net income for 2018 was $155.7 million.
Frontier Airlines is also one of the leading Ultra-low-cost carriers in the US airline industry. It has its headquarters in Denver Colorado. Frontier operates flights to more than a hundred destinations across the US and six other countries. It employs more than 3,000 people and is the 8th largest commercial airline in the United States. Frontier Airlines was founded in 1994. It has a fleet size of 98 aircraft that cover 112 destinations. Its Parent company is Indigo Partners. The company’s operating revenue for 2018 was $2.156 billion and net income was $83 million. According to Department of Transportation, Frontier carried 19.4 million people in 2018. Being one of the top 10 airline businesses, Frontier is also one of the competitors of Southwest Airlines.
Republic Airlines is also a major competitor of Southwest Airlines. It is a regional Airline subsidiary of Republic Airways Holdings which operates as American Eagle, Delta connection and United Express. Republic Airways is based in Indianapolis. It has a fleet of 200 Embraer 170/175 aircraft. The company offers scheduled passenger service with more than 1,000 daily flights across a hundred cities in 40 US states as well as Canada, the Caribbean, and Central America. Republic Airways provides fixed-fee flights. And employs more than 6000 people. According to the Department of Transportation, the Republic carried more than 18.6 million people in 2018.