Issues to consider/ identify before going international

1. Is the company stable in day to day basis?

Answer: It is an important question to ask, for a domestic company to go international, firstly its
daily operation must be doing decently well, if not dont even think about going global. In SWs case,
For 43 years since it is founded, focused on domestic flights.Has earned its reputation in the
domestic airline industry. As mentioned in page 251 of case study, it has carried more domestic
passenger than any other US airlines. This indicates that the company is stable and operating well
in its daily function with the intergration of 8000 employees throughout the years.

2. Are they trustable/ experienced international partners to work with in the global expansion?

Answer: SW has successfully acquired AirTrans airways in 2010, give access to approximately 30
new markets, with focus on Caribbean, Central America and mexico. AirTran serves several
Caribbean spots, and now Southwest will as well. Having this capability built-in means that
additional international expansion becomes much easier to accomplish, eventually giving passengers
more choice for more destinations. Also, Technology That Works If I had to pick Southwest's
Achilles Heel, it would be the airline's ancient, inflexible information technology. With
international service, codesharing, and a variety of other things along the way, the airline's IT
systems have always been the biggest roadblock. This problem has stretched for years and years.
But as Southwest CEO Gary Kelly said on the media call today, "We've made a decision to replace our
reservation technology." Finally. This will take the shackles off the airline. Also, when two
comparatively similar airlines company mergers, it will kill a lot of competition that will happen in
the industry.

4. Are they trustable senior employees to aid with international operations/ willingness of
employees to adapt to new vision and mission of company.

Answer: As mentioned in the case study, employees in SW does not seem to be enamoured of the
idea that says bigger is better. The company as well as the employees are still having an underdog
mindset as described by the CEO Gary Kelly.

Underdog mentality, describe the combatant that wound up on the bottom, or the loser. The
winner was the "top dog." how it could actually be a winning point: When you engage the underdog
position, it automatically gives you a psychological and physiological advantage," When you are in
the underdog position, it activates a perceived lack of pressure," he said. " 'We're the underdogs,
they're the ones feeling the pressure.' So tend to focus on the process

( The company's difficult beginning created an "underdog" mentality and fighting spirit among
Southwest Airlines employees) difficult beginning: sept 2001 attack causes a splur in the whole
domestic and int airline industry. Referring to RPM and operating revenues for SW and the whole US
airline industry in year 2001, relatively low.

Conclusion is, this underdog mentality could eventually lead them to further success as they have
the right attitude. Also aligned with companys principle in recruitment which Hire for attitude, train
for skills.

5. Financial ability to sustain overseas expansion.

Answer: US airline industry started to go on track/ stable starting in year 2009-2010. Southwest
Airlines is currently in a strong financial position, recording its 33rd consecutive profitable year in
2005. Southwest has been able to maintain its strong financial position during the past five years
when most airlines have struggled because of its cost advantages. Southwest has a cost advantage
despite newer discount airlines lower maintenance materials and repairs cost. With its strong
balance sheet, low cost structure and low-fares leadership. As mentioned in page 260 of case study,
SW bucked the airline industry trend by earning profit for 38 consecutive years.

Improvements needed in order to go international

1. Upgrade its fleet, adding Boeing 737 max. More fuel efficient engine, help carrier extend the
flight, most fuel savings for long haul distances. If plan to explore flights to Europe, have to
upgrade to 777s, 778s.

the range of the Boeing 737s is not suitable for long-haul international flights but Southwests
current fleet could be easily adapted to service intra-continental destinations.

market oppo- since alrdy secure a strong position in domestic market, exploring to int market shud
nt be seen as a threat, instead it is an opportunity, time to step out of comfort zone.

airtran deal- one expertise in local, one experienced in global. can work together beating
competitors.