ABSTRACT
This chapter discusses the confluence of a number of vital forces that is expected to bring about a major shakeout in the US industry with major ramifications for the global airlines. The deregulation movement resulted in a shakeout within the US airline industry with some ramifications within the global industry. Management at major US airlines was far too slow to react and respond to the expansion of low-cost, low-fare airlines. Air India stood by and watched the international traffic to and from India be diverted to the US West Coast by Singapore Airlines and to Europe by Emirates. The airline provides significant service across the United States and has recently started serving transcontinental markets on a nonstop basis. Southwest's value proposition is different from conventional airlines in two other aspects. First, it focuses on point-to-point service and avoids the development of hub-and-spoke systems. Conventional airlines are trying to reduce their costs in every area possible.
