THE UNIVERSITY OF SOUTHERN MISSISSIPPI

Study Abroad in PanamaJuly 2011

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SOUTHERN MISSISSIPPICenter for Logistics, Trade and TransportationAndCollege of Business

Study Abroad in PanamaCoordinated by

Dr. Tulio SulbaranTel: 601-266-6419 - Email: [email protected]

1Ce THE UNIVERSITY OF

SOUTHERN MISSISSIPPI

Jul 2012

Panama Airlines vs. US Airlines: A Case Study Comparing Copa Airlines to

Southwest AirlinesPresented by:

Kirk Gore Tel: 601-434-3651 - Email: [email protected]

Center for Logistics, Trade and TransportationandCollege of Business


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Video Preamble


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Outline

1- Introduction

2- Information/Data Collection Approach

3- Case Study

4- Results and Results ImpactSimilaritiesDifferences

5- Summary


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Introduction

• By definition, an airline is “an air transportation system including its equipment, routes, operating personnel, and management” (Marriam-Webster).

• The focus of my topic for this report is to compare the positioning strategies between Copa Airlines and Southwest Airlines to see what makes each airline successful in their respective countries.


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Introduction

VS.


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Introduction• Due to the economic impact of the Panama Canal,

Panama is one of the world’s fastest growing economies.

• Copa Airlines is not only Panama’s most successful airline but also the most profitable airline in the world.

• Panama only currently has 3 operating airlines, with one only transporting cargo so the competition is much less fierce than in the United States.


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Introduction

• This report takes an in depth look both at the market conditions of the airline industries in both Panama and the United States, and how Copa Airlines and Southwest Airlines position themselves in their industries to achieve sustainable growth and success.


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Introduction


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Information/ Data Collection Approach

• The data collection approach was divided into 2 parts for this research paper:

• Internet Search and Panamanian Interview


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• For the internet search, I searched for specific keywords in Google to find out more about the airline industries in Panama and the US.

• I also used Google to research preliminary information about the strategies that both Copa and Southwest implement to achieve success in their respective countries.


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Keywords used in Google searchCopa Airlines

Southwest AirlinesPanamanian Airline History

American Airlines Strategic PositioningSouthwest Airlines Strategy

Copa Airlines Field of Coverage

Southwest Airlines Field of Coverage


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• From my internet research, I learned that:

• The US Airline industry is saturated with airlines, making profitability very difficult..

• The Panamanian market has 3 airlines, with one dealing exclusively in Cargo.

• Southwest Airlines employs a low cost strategy.


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• For the second part of the data collection, I used my iPhone to record audio and video from my Panamanian Interview.

Joseph Mohan, the VP of Commercial & Planning


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• From the Panamanian interview, I learned that:

• Copa Airlines employs a combination of a differentiation/niche strategy to achieve a competitive advantage in Panama.


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Case Study

• Brief Description of Copa Airlines:

• Based out of Panama City, Panama• The official airline of Panama• 7,900 employees• Publicly traded• Revenues of approximately $241,000,000 per year• The most profitable airline in the world• Differentiation/niche strategic position


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Case Study

Copa Airlines headquarters location:


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Case Study

• Brief Description of Southwest Airlines:

• Based out of Dallas, Texas in the United States• 37,000 employees• Publicly traded• Revenues of approximately $459,000,000 per year• Low cost strategic position


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Case Study

Southwest Airlines headquarters location:


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Results and Results Impact• Aspects specifically compared between Copa

Airlines and Southwest Airlines:

• Flight Destinations• Is said company the top performer in the country?• Revenue per Year• Countries Serviced• Airplane Fleet• Pricing Strategy• Destination Strategy

• Number of Employees


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Results and Results Impact

• Similarities between Copa Airlines and Southwest Airlines:

Similarities between Copa and SouthwestCriteria Copa (Panama) Southwest (US)

Destinations 64 97Top performer in

country? Yes Yes


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• Differences between Copa Airlines and Southwest Airlines:

Differences between Copa and SouthwestCriteria Copa (Panama) Southwest (US)

Revenue per Year $241,000,000 $459,000,000Countries Serviced 29 1

Airplane Fleet 79 550Pricing Strategy High Cost (High Quality) Low Cost (Low Price)

Destination Strategy Highly Specialized High Traffic Areas OnlyNumber of Employees 8,000 37,000


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• Why are the similarities important?

• Why are the differences important?


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Summary

• This research paper aimed to identify the differences in positioning strategies between Copa and Southwest.

• To collect the data, both internet research and a Panamanian interview were used.

• The results indicate that while both airlines are the most successful airlines in their respective countries, they use very different strategies to achieve success.

• Copa uses a differentiation/niche strategic position.• Southwest uses a low cost strategic position.


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THE UNIVERSITY OF SOUTHERN MISSISSIPPIfounded in 1910

Thanks!

Center for Logistics, Trade and Transportationand

College of Business

THE UNIVERSITY OF SOUTHERN MISSISSIPPI

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