Study Abroad in Panama July 2011 THE UNIVERSITY OF SOUTHERN MISSISSIPPI Center for Logistics, Trade and Transportation And College of Business Study Abroad in Panama Coordinated by Dr. Tulio Sulbaran Tel: Ce THE UNIVERSITY OF SOUTHERN MISSISSIPPI Jul 2012 Panama Airlines vs. US Airlines: A Case Study Comparing Copa Airlines to Southwest Airlines Presented by: Kirk Gore Tel: Center for Logistics, Trade and Transportation and College of Business

Study Abroad in Panama July 2012 THE UNIVERSITY OF SOUTHERN MISSISSIPPI Center for Logistics, Trade and Transportation And College of Business Video Preamble

Study Abroad in Panama July 2012 THE UNIVERSITY OF SOUTHERN MISSISSIPPI Center for Logistics, Trade and Transportation And College of Business Outline 1- Introduction 2- Information/Data Collection Approach 3- Case Study 4- Results and Results Impact Similarities Differences 5- Summary

Study Abroad in Panama July 2012 THE UNIVERSITY OF SOUTHERN MISSISSIPPI Center for Logistics, Trade and Transportation And College of Business 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.

Study Abroad in Panama July 2012 THE UNIVERSITY OF SOUTHERN MISSISSIPPI Center for Logistics, Trade and Transportation And College of Business Introduction VS.

Study Abroad in Panama July 2012 THE UNIVERSITY OF SOUTHERN MISSISSIPPI Center for Logistics, Trade and Transportation And College of Business 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.

Study Abroad in Panama July 2012 THE UNIVERSITY OF SOUTHERN MISSISSIPPI Center for Logistics, Trade and Transportation And College of Business 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.

Study Abroad in Panama July 2012 THE UNIVERSITY OF SOUTHERN MISSISSIPPI Center for Logistics, Trade and Transportation And College of Business Introduction

Study Abroad in Panama July 2012 THE UNIVERSITY OF SOUTHERN MISSISSIPPI Center for Logistics, Trade and Transportation And College of Business Introduction

Study Abroad in Panama July 2012 THE UNIVERSITY OF SOUTHERN MISSISSIPPI Center for Logistics, Trade and Transportation And College of Business Information/ Data Collection Approach The data collection approach was divided into 2 parts for this research paper: Internet Search and Panamanian Interview

Study Abroad in Panama July 2012 THE UNIVERSITY OF SOUTHERN MISSISSIPPI Center for Logistics, Trade and Transportation And College of Business Information/ Data Collection Approach 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.

Study Abroad in Panama July 2012 THE UNIVERSITY OF SOUTHERN MISSISSIPPI Center for Logistics, Trade and Transportation And College of Business Information/ Data Collection Approach

Study Abroad in Panama July 2012 THE UNIVERSITY OF SOUTHERN MISSISSIPPI Center for Logistics, Trade and Transportation And College of Business Information/ Data Collection Approach 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.

Study Abroad in Panama July 2012 THE UNIVERSITY OF SOUTHERN MISSISSIPPI Center for Logistics, Trade and Transportation And College of Business Information/ Data Collection Approach 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

Study Abroad in Panama July 2012 THE UNIVERSITY OF SOUTHERN MISSISSIPPI Center for Logistics, Trade and Transportation And College of Business Information/ Data Collection Approach From the Panamanian interview, I learned that: Copa Airlines employs a combination of a differentiation/niche strategy to achieve a competitive advantage in Panama.

Study Abroad in Panama July 2012 THE UNIVERSITY OF SOUTHERN MISSISSIPPI Center for Logistics, Trade and Transportation And College of Business 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

Study Abroad in Panama July 2012 THE UNIVERSITY OF SOUTHERN MISSISSIPPI Center for Logistics, Trade and Transportation And College of Business Case Study Copa Airlines headquarters location:

Study Abroad in Panama July 2012 THE UNIVERSITY OF SOUTHERN MISSISSIPPI Center for Logistics, Trade and Transportation And College of Business 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

Study Abroad in Panama July 2012 THE UNIVERSITY OF SOUTHERN MISSISSIPPI Center for Logistics, Trade and Transportation And College of Business Case Study Southwest Airlines headquarters location:

Study Abroad in Panama July 2012 THE UNIVERSITY OF SOUTHERN MISSISSIPPI Center for Logistics, Trade and Transportation And College of Business 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

Study Abroad in Panama July 2012 THE UNIVERSITY OF SOUTHERN MISSISSIPPI Center for Logistics, Trade and Transportation And College of Business Results and Results Impact Similarities between Copa Airlines and Southwest Airlines: Similarities between Copa and Southwest CriteriaCopa (Panama)Southwest (US) Destinations6497 Top performer in country?Yes

Study Abroad in Panama July 2012 THE UNIVERSITY OF SOUTHERN MISSISSIPPI Center for Logistics, Trade and Transportation And College of Business Results and Results Impact Differences between Copa Airlines and Southwest Airlines: Differences between Copa and Southwest CriteriaCopa (Panama)Southwest (US) Revenue per Year$241,000,000$459,000,000 Countries Serviced291 Airplane Fleet79550 Pricing StrategyHigh Cost (High Quality)Low Cost (Low Price) Destination StrategyHighly SpecializedHigh Traffic Areas Only Number of Employees8,00037,000

Study Abroad in Panama July 2012 THE UNIVERSITY OF SOUTHERN MISSISSIPPI Center for Logistics, Trade and Transportation And College of Business Results and Results Impact Why are the similarities important? Why are the differences important?

Study Abroad in Panama July 2012 THE UNIVERSITY OF SOUTHERN MISSISSIPPI Center for Logistics, Trade and Transportation And College of Business 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.

Study Abroad in Panama July 2011 THE UNIVERSITY OF SOUTHERN MISSISSIPPI Center for Logistics, Trade and Transportation And College of Business THE UNIVERSITY OF SOUTHERN MISSISSIPPI founded in 1910 Thanks! Center for Logistics, Trade and Transportation and College of Business