Southwest’s Airlines Boarding Process.
Southwest has an open seating policy, so as a substitute of being assigned a distinct seat, you can be assigned a boarding role and number. The role will either be A, B, or C with a number, depending on the time you made, arrived or checked in for your flight. It’s important now for all patrons to check with other passengers around them to make sure they are in the correct order. However; the ones with the lowest number in A, B and C will board first due to those individuals taken the time to check-in as required to eliminate the long wait time. In addition, this helps with the organization of customers camping out overnight at the Southwest Airlines gate to board the plane.
Consequences, once patron have boarded, any seat that is open can be taken whether it’s a window, aisle, or a middle seat, it’s totally based on the preference of their choice. If you don’t check-in 24 hours before your flight, online or in person then you’re boarding function more than likely will be C and those individual usually are stuck in the core seat on the aircraft.
Southwest’s main goal in introducing the early-bird check-in
Southwest main goal of introducing the early bird check-in mainly was to earn a profit from customers, by offering them an option to add an early boarding position for the cost of $10 per customer along with their airfare in which the staff reserves a boarding position for them prior to check-in but can’t guarantee that it will be an A which is the first 60 boarding positions. Secondly, their goal is for customers to relax and not worry about early check-in because Southwest will do the work for them, better seat and overhead space is provided for those customers and Lastly, their goal is to get more travelers to invest in the early bird check-in, so their market strategy can increase more revenue.
How Southwest Airlines used the game theory approach to increase its profits.
Southwest Airlines introduces the early check-in online, and the early bird check in process where customer pays $10.00, and the Airline do the work for the customers even though it doesn’t guarantee the customers a better seat it automatically checks them in.
The Southwest Airline process of this game theory is certain a profit because if a customer like the idea of early check in automatically rather than not being guaranteed a better seat than $10.00 is the thought of that individual or if you an early arrival, then you can go online or arrive at the airport early and check in with the $0 for a lottery style seating arrangement then those individual would not pay that amount. It’s a decision that each competing traveler would haven’t to decide.
By the same token, Southwest Airlines can’t satisfy them all, yes, for the early bird process has been tremendously profitable for the Airline due to those people still paying in hopes to get the seat they desire. For instance, Talwalkar, gave figures that with this process, Southwest Airlines have earned $98 million in 2010, which grew by 44 percent in 2011 to $142 million in revenue. Therefore, it will be fair to say the game theory that Southwest process has earned them a tremendous amount of profit.
1. What is the outcome of the game involving early-bird check-in?
Southwest airlines’ outcome “thus” far is working quite well due to their boarding method and having an open-seating policy the early bird check-in eliminates a lot of the hassle of being stressed of the long wait time of boarding the plane due to the airline automatically reserving those customer boarding position.
However, the bad side of the early bird check-in is that if several customers pay that fee, then it can become a problem if love ones are flying together, but not able to sit together on the flight due to them being thrown into the lottery for priority seating which can land those that has paid this fee in an okay seating position, due to, Southwest seating policy via the customers who checked in on-line early and got in Position A without paying the early bird fee but got a good seat, now you have some customer that’s wondering if it’s worth the money.
2. Identify what is the passengers’ dominant strategy.
According to the article, it states to consider the game between two travelers who compete for the best seat. The possible outcomes are:
–if neither pays for Early Bird, then both can expect okay seats in the seating lottery
–if only one pays $10 for Early Bird, that person gets a good seat
–if both pay $10 for Early Bird, then they both get put into a lottery for priority seats. This essentially means they are competing in a seating lottery, but they both must pay $10 to do it.
Or in Table Form:
Paying the $10 for Early Bird Check-in is a dominant strategy!
3. Determine why travelers face the Prisoner’s Dilemma with the early-bird check-in process.
Prisoner’s dilemma means one kind of conflict between two parties who end up not having a desired outcome, as they both must look out their self-interest. In this both parties choose to protect their self-interest at the cost of another one.
For example, while travelers like to get checked in early morning and they think that they pay for services, that is why they can check in during early morning as they see fit. There are managers and travelers who have their different perception about check in and both protect their self-interest at early check in and them with the early bird check-in even as it is stated that if you pay $10 you will be automatically checked in but not guaranteed to be in the A boarding role or the first 60 passengers. To some this may not seem fair, especially if there are several others that have paid for the early bird check-in and guessing if it’s worth paying for, or just taking your chancing on arriving early and getting the A boarding role.
Given these points. Southwest airlines have made plenty of revenue with the Early birds, according to (Murphy, 2018) due to the day of travel they increase their early bird package upgrades if available, would offer passengers a better boarding position for a more expensive amount of at least $25-$50 dollars each way as well as, guarantees them a boarding position of A1 thru A15. Meaning those individuals that paid the more expensive amount for the early bird will be the first 15 passengers to enter the plane even if they arrived late for their check-in.
Advantages and disadvantages of the early-bird check-in process for Southwest Airlines.
The advantage and the disadvantages of the early bird check in both has its good and it’s bad but better than disadvantages based on the information analyzed because if the early bird check in is paid with a good flight scheduling then your chances are much greater on getting a Position A whereas a passenger that pay the early bird check in fee but made their flight possible 2-3 weeks later than the other passengers then they would possible be in a position of a B or C because once they get there, passengers card is stamped and the number is based on preference of that count rather than the pay of the early bird. Therefore, as passengers to get a good position they too are responsible in helping with this process, such as making a flight month in advance as well the passenger who don’t pay the early bird check-in fee if they arrive and check-in 24 hours earlier are likely to gain a position directly behind the ones that did pay for the early bird check in.
Suggest ways in which other companies, or the company you work for, can utilize similar game approaches to maximize profits.
Hernandez, R., Cardenas, C. ; Munoz, D. (2018), states that Game theory is a branch of mathematics that deals with the analysis of competitive situations in which the outcome of the participants critically depends on the actions of other participants. The power company is one that are similar in utilizing the game approach to maximize profit due to the use of a game-theoretical optimization method instead of the old traditional multi-objective optimization. The method is with the use of a Micro Energy Grid (MEG) that is designed for users to experience the transport of energy that is clean and connected to different energy sources such as, cooling, various forms of electrical energy services, and heating that has brought benefits to the economy, and the eco-system as well as the supply of electrical needs.
“Therefore”, per (Kaijun, L., etc., 2018), for rational participants the game-theoretical optimization method obtains unique optimal strategy Unlike the traditional multi-objective optimization due to the equilibrium of the game guides the formulation of price, planning, and operation of energy microgrids.
Kaijun, L., Junyoung, W., Di, L., Dezhi, L., ; Taorong, G. (2018). Energy Management of Combined Cooling, Heating and Power Micro Energy Grid Based on Leader-Follower Game Theory. Energies (19961073). Mar2018, Vol. 11 Issue 3, p1-N.PAG. 21p.
Hernandez, R., Cardenas, C. ; Munoz, D. (2018) Game theory applied to transportation systems in Smart Cities: analysis of evolutionary stable strategies in a generic carpooling system. International Journal on Interactive Design ; Manufacturing; Feb2018, Vol. 12 Issue 1, p179-185, 7p
Murphy Jr, B., (2018). Southwest Airlines Made $358 Million Last Year Selling This 1 Simple Thing (Because People Really Hate to Wait). Inc.com, Published on: Feb 24, 2018.
Presh Talwalkar (2015) Southwest Airlines boarding and game theory https://mindyourdecisions.com/blog/2013/03/05/southwest-airlines-boarding-and-game-theory/