Why has Southwest's pricing strategy been successful the the last three decades?

I do not have more detailed information on the prices of the
Southwest versus their cost, and the growth in their market share. In absence of these figures it
is not possible to gauge the success of the Southwest's policy. However I would like to point out
that this strategy should not be considered just a pricing strategy. It is a complete product
strategy. Southwest has not reduced price for the same product. It has changed the basic
characteristic of the bundle of services it offers. It has changed the product from a bundle of
basic transportation combined with many other facilities, convenience and choices, to just the
basic transportation. This has enabled them to reduce their costs and pass on this benefit to the
customer in form of reduced fares.

Thus the main reason for success
of the Southwest's strategy has been the choice given to customer to buy and pay for only the
basic transportation services. This is in contrast to the strategy adopted by the full service
airlines that do not give the customers the choice of opting for only the basic transportation
without the additional frills. It is important to note that there are many passengers who want
all the luxuries that airlines have to offer, and are happy to pay for it. This is why we still
have first class passengers flying on full service airlines, paying fares that are several times
the fares of no-frills airlines.

Thus, success of Southwest should
be attributed to its ability to meet economically a large potential demand for basic air
transportation service without frills. meet this demand