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The South West Effect

Look for opportunities beyond the traditional thinking cap . Break a problem down into parts and then analyse it from multi dimensional angles by peeping into gaps and points within it which creates opportunities for growth . Move fast and with a lot of self confidence into the niche defying all traditional logic .

The success and profitability of Southwest's business model led to a common trend being named after the company, the Southwest Effect. Since Southwest's original mission in Texas was to make it less expensive than driving between two points (in the early 1970s, during the first major energy cost crisis in the U.S.), it developed a template for entering markets at rates that allowed the airline to be profitable, yet only on the basis of lean operations and high aircraft use. The key concept to the Southwest Effect is that when a low-fare carrier (or any aggressive and innovative company) enters a market, the market itself changes, and usually grows dramatically. For example, when fares drop by 50% from their historical averages, the number of new customers in that market may not just double, but actually quadruple, or more.Southwest has been a major inspiration to other low-cost airlines, and its business model has been repeated many times around the world. Europe's EasyJet and Ryanair are two of the best known airlines to follow Southwest's business strategy in that continent (though EasyJet operates two different aircraft models today). Other airlines with a business model based on Southwest's system include Canada's WestJet, Malaysia's AirAsia (the first and biggest LCC in Asia), Qantas's Jetstar (although Jetstar now operates three aircraft types), Thailand's Nok Air, New Zealand's Freedom Air and Mexico's Volaris.

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