The biggest strength of Southwest is its low fares. No other Airline can even come close to beating their low-cost ticket price. Customers are highly attracted to the low cost (average one-way ticket price $89) fares. The airline is able to keep its costs low because it offers no frills. All seats are coach class, there are no in-flight meals, and it only flies one type of airplane, the Boeing 737. This low-cost model is what helped Southwest endure the attacks on September 11, 2001, keeping it in much better shape than its closest competitors.
Even though rivalry is increasing in the discount airline industry as the market decreases (less people flying) and competitors downsize, the threat of new entrants is fairly low because demand isn’t high.
In spite of its low fares, employee loyalty, and excellent customer service, southwest is not without weaknesses. No matter how successful the company is, it only serves 29 states and doesn’t have a “hub” structure to reach out to the masses. As a result it cannot compete against the larger airlines that serve both nationally and internationally with hubs that allow them to reach a much larger share of the overall market.
The airline also doesn’t have the frills other airlines make available such as Business and First Class seating, in-flight meals, movies, etc. The other airlines are trying to sell these luxuries in their marketing to maintain a competitive edge.
Another weakness of southwest Airlines is their use of only the Boeing 737 airplane. Limiting itself to one type of aircraft leaves them without the flexibility they might require in the event that type of plane receives a bad reputation of a critical flaw is found. It would cost the company a fortune to find replacement aircrafts.
Southwest was slow in catching up with the other airlines in the amount of time customers would have to queue up in the gate area while waiting for boarding passes. In 2003, the company made efforts to improve in those areas where this weakness was found.