Southwest has decided to put Wi-Fi on every airplane that are owned and operated by them. The reason they have decided to do this is to gain more market share than they already have or that is so they say on their websites and other press releases. Southwest after recently acquiring Airtran decided to catch up to all the other airline companies and start providing Wi-Fi on their planes. The reason that Southwest was amongst the last of the airline companies to put Wi-Fi in their airliners is because they decided to focus on other areas. Although this might have been a wrong strategic move for Southwest they have enough of the market share and the cheapest prices due to a locked in 20 year gasoline contract that is cheaper than any of the competition that they due not have to worry about bringing customers who want Wi-Fi on their trip running back to Southwest as soon as this service is installed.
The price is going to range anywhere from five to ten dollars per flight for Wi-Fi. Although many research companies have projected on one out of fifty customers to use Wi-Fi on airliners it is more about brand loyalty for Southwest. Southwest has always tried to be better and cheaper than the rest of their competition and Wi-Fi is just another service they want to offer to their customers
This is a great idea for airliners to do but Southwest is a little late in starting this procedure. Although this will not really effect them in the future it is probably effecting them right now as they are trying to set it up while other companies have it up and running. One way they can find a boost in sales is by making a service like this for free. What this will do is boost ticket sales, which will boost profit by more than what one in fifty Wi-Fi users will. If they provide free Wi-Fi than I believe that Southwest can own most of the market share and have a competitive advantage over the rest.
I agree that Southwest is going to have the majority of the market share because they understand their target market. They also understand the customers needs very well. I also agree that they can really boast their sales if they offer this service for free. Making people buy this service does not do nearly as much as it would for the company if it were free.
ReplyDeleteI think that Southwest's late entry into the Wi-Fi installment will not effect them in the long run. Southwest's lower priced tickets bring in plenty of customers which allows them to excel over others. In providing free Wi-Fi, it will only extend their lead in flight services. I also agree that ticket sales will increase greatly due to the free service. Southwest knows who their target market is and in order for Southwest to keep their target market in sight, they must adapt to their consumers wallets. Unless the other companies decide they will give free Wi-Fi, Southwest's late entry will still give them an advantage over the other companies as their prices will continue to remain lower.
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