Business

Southwest is doing what nobody thought they would do. It is a Master Class in market expansion

Southwest experienced tremendous growth during 2021, with expansion into 18 new markets and turning a benefit for Q4. Despite the harsh impact of the pandemic on the travel industry, staff shortages, events going virtual and the increase in stays, the airline continued and did what no one thought an airline could. : she grew up.

And now Southwest is starting to do what no one thought the low cost airline would do: attract business travelers.

To anyone familiar with the low-cost carrier, the idea that the Southwest is looking to attract business travelers seems laughable. After all, while the airline offers many benefits for the average economy passenger, none apply to business class travelers whose ticket already includes free checked baggage and the ability to cancel or change flights. And let’s not forget the small fact that its planes lack one pretty important thing: business class cabins.

But in a weirdly genius move, Southwest is making what’s known as the Chimera a reality by making the expansion of the road map a basic recovery strategy. And while the airline can be seen as deaf for using this time to expand its routes and reach new markets, this is only for those who are blind to its long-term plan: market expansion.

What Southwest is doing is expanding to smaller, more vacation-friendly destinations that people want to visit, such as Telluride, Palm Springs, and Southern Maine. But it’s not just vacationers hitting the slopes or relaxing on a warm beach that attract passengers from the Southwest.

As more companies shift to working entirely remotely and the Great Resignation (or better yet, the Great Reshuffle) continues, where we work isn’t the only thing that’s changing. But the place where we live is also changing.

The pandemic has created the perfect mix for soaring house prices. Homes became more important than ever as more people worked from home all week and found themselves indoors all weekend with nowhere to go. Rent rising and historically low interest rates made buying a home more attractive than ever. And thanks to remote work permanent trend, people don’t buy homes based on proximity to their employer. Instead, head to “vacation-friendly” destinations close to their favorite hobbies.

This means for the airline industry that people are increasingly dispersed and business travelers are no longer attached to cities like New York, Chicago or San Francisco. Now like more and more people are leaving big cities, business travelers are everywhere like the Southwest.

Southwest has a history of resilience that grew out of a holistic approach to strategy and a deep understanding of human psychology. He knows that business travelers don’t simply choose the airlines that offer the best buffet in the airport lounge, the most points, or the largest first-class cabins, but by its value.

And when people value their time, they also appreciate the convenience of an airport in their area and the time it allows them to reunite with their family, their friends, their lives. Because no matter how many bells and whistles an airline puts out to curb air travel, people don’t fly for fun. They fly to get to where they are going. And to get them there, Southwest is strategically positioned to meet people where they are.

The airline industry is fiercely competitive and notoriously difficult, but it is not unlike a number of other industries. And like other industries and the businesses that start up and operate within them, the ones that succeed – and even weather the storm – are the ones that truly know their consumer and their value. It is with this knowledge that businesses can meet people where they are and get them to where they want to be.

The opinions expressed here by the columnists of Inc.com are theirs and not those of Inc.com.

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