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