The only variable costs are the transaction costs of issuing a ticket (very low with e-tickets), the extra fuel the plane uses because of the extra weight of the passenger and luggage, and any in-flight food or beverages. The true variable cost of flying one additional passenger is very low. So, air transportation is a very high fixed-cost business...
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In such a business, volume is important. The unit price minus unit variable cost (unit contribution) is high. An airline must have a high volume of passengers to cover the high fixed costs. Operating below break-even volume results in an airline losing lots of money quickly. Operating above break-even volume results in an airline making lots of money quickly...
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Southewest It has been over a year since the September 11th attacks and our nation’s airline industry has suffered huge losses in revenues because of them. Southwest Airlines however, has been the only major U...	1 / 129
southwest airline executive summary Rivalry was increasing, as the market decreased, and competitors downsized, the competitors become more or less equal in size and capacity. This means that as economic conditions worsen, competitors downsize and then compete for the same remaining market...	2 / 481
Southwest Airlines Many airlines have tried to copy Southwest’s business model, and the Culture of Southwest is admired and emulated by corporations and organizations in all walks of life...	2 / 410
Southwest Airlines Price wars began between them. Braniff airlines began charging $13 for its Dallas-Houston Hobby flights. Southwest offered travelers the opportunity to pay $13 or $26 and receive a free bottle of liquor...	3 / 561