Southwest started out with a cost advantage that gave them pricing power in the industry by charging low fares and thus generating revenue.  If rivals choose to match Southwest’s low fares to promote their airline, Southwest would be affected negatively.  Ultimately, Southwest would lose money which is obviously a situation to avoid.  Southwest has remained successful and profitable throughout the years while their competitors have continually reported losses, which is concrete proof that Southwest’s strategy was effective and astute.
Another recommendation for Southwest Airlines is to make changes to their rewards program to make it more appealing to a larger consumer market thus promoting growth.  By expanding the rewards program offered or offering preferred treatment for frequent fliers, a new customer base (or bases) may be reached.  The new customer base will increase overall profits and further promote Southwest as a leader in the airline industry.  While first-class seating is not an option with Southwest, other perks could be added to the Rapid Rewards program to promote further growth opportunities. 
Marketing tactics and promotions are also an important element that contributes to increasing the customer base.  Southwest should continue not charging checked bag and flight change fees to promote customers loyalty and also to entice new customers.  With no “add-on” fees, the customer base will increase which will help to ensure Southwest’s ability to further increase their market share.  Also, this will attract new customers who are looking for cost savings, all while increasing Southwest’s domestic the market share when compared to competitors.
Southwest currently has a very positive relationship with their employees, and it is important for this to continue even after the acquisition of AirTran.   Southwest must ensure there is a process in place to accommodate the acquisition as smoothly as possible.  Some AirTran executives should be appointed to executive positions at Southwest to ensure there are effective and efficient collaborations.  It is also important to introduce AirTran employees to the acquisition and explain the benefits and new procedures that will result.  It is critical to introduce the company culture, company strategy, and emphasize the importance of excellent customer service so that the Southwest Way is abided by and understood by all.  Programs and training courses must be offered to assist in the training of all AirTran employees so they are aware of processes, procedures, and policies utilized by Southwest.  Rather than hiring new employees, Southwest should focus on abiding by their “No-Layoff Policy” so Airtran employees are not intimidated, angry, or worried by the merger.  Layoffs decrease morale and if at all possible should be avoided.  Also, assigning a mentor to each new AirTran employee would assist in training and allow the new employee to feel more welcome, and help establish the Southwest Way.  Furthermore, AirTran management and employees should be involved in the hunt for cost reduction mechanisms to help bring Southwest’s cost advantage back to life.
Southwest Airlines has achieved excellence in the past in crafting company strategy and the main issue is to devise recommendations to ensure the strategy remains a success. Southwest offers a simple, low cost, customer service oriented service that helps distinguish them from the competitors.  This competitive advantage will allow them to sustain profitability in the airline industry.  Southwest has been able to a build a loyal customer base with both their excellent customer service and their employee’s dedication to the Southwest Way.  By focusing on maintaining and improving Southwest’s cost advantages and their growth opportunities the company can continue to prosper.
