Changes in Service and Price in the Airline Industry
Case: Southwest Airlines
In October 1994, United Airlines launched "Shuttle By United" to compete directly with Southwest Airlines in nine markets in California and adjacent states. "Shuttle By United" represented United's effort to operate on airline-within-an-airline alongside its hub and spoke route system with Southwest Airlines (SWA).
i) How would you characterize the U.S. airline industry in the early 1990's?
ii) How is it that Southwest Airlines has been able to consistently grow and prosper in the U.S. passenger airline industry
iii) How would you describe United's goals, objectives and strategy for "Shuttle by United"?
iv) How should Southwest Airline respond to the "Shuttle by United" decision to change its service and price? Why?