Southwest Airlines and Microeconomics Essay - 1139 Words

Southwest Airlines and Microeconomics John Divler Rasmussen College Author Note This research is being submitted on June 14, 2010, for Mr. Bergeen’s Microeconomics course at Rasmen College by John Divler. Southwest Airlines and Microeconomics Southwest Airlines was created in 1967 and is headquartered in Dallas, TX. Southwest offers flights to their passengers to get them to their destinations when they want to get there, on time, at the lowest possible fare. The advantage that Southwest has in the marketplace is their commitment to their customers. The mission of Southwest Airlines is dedication to the highest quality of customer service delivered with a sense of warmth, friendliness, individual pride, and company spirit†¦show more content†¦Southwest is reducing flights to try and be more efficient on their fuel consumption. Another issue is the increase in ticket prices. Southwest Airlines has announced that they will be raising their ticket prices to offset the high cost of jet fuel. In March of 2012 Southwest raised fares by between $4 and $10 per round trip, depending on the distance (The Associated Press, 2012). In today’s economy, this may decrease the d emand for flying and people may look for more affordable ways to travel or not travel at all. When looking at the elasticity of demand Southwest is extremely impacted by the elasticity of demand. Items such as externalities, unemployment, inflation, and monetary, fiscal, and federal policies affect the elasticity of demand. The elasticity of demand is based solely on current market conditions, the customer’s purpose for travel, and available substitutes. The airline industry is viewed has being unstable because it is based on current market conditions, and the market is always changing. If Southwest decided that they needed to increase their revenue they would have to start by raising the prices of their tickets. The need for increased revenue would need to be passed on to the consumers’. When a ticket price is higher with one airline than the other, the customerShow MoreRelatedLatin American Airline Industry4384 Words   |  18 PagesLatin American airline industr y TAM Airlines is the largest airline in Latin America in terms of number of annual passengers flown.[16]Along the first countries to have regular airlines in Latin America were Colombia with Avianca, Chile with LAN Chile (today LAN Airlines), Dominican Republic with Air Dominicana, Mexico with Mexicana de Aviacià ³n, Brazil with Varig, and TACA as a brand of several airlines of Central American countries (Honduras, El Salvador, Costa Rica, Guatemala and Nicaragua)Read MoreTechnological Advancements, Deregulation, and Competitive Pricing: Marketing Strategies of JetBlue5068 Words   |  20 Pagesï » ¿Introduction The airline industry is one that has rapidly evolved both with regards to technology and product offerings. 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