Company Overview Southwest Airlines Co. (NYSE: LUV) is based in the United States, Dallas Texas. In terms of domestic passengers carried, southwest airline is the biggest airline in the U.S. with over for decades of service experience, the company is known within the airline industry as a low fare main domestic airline. Southwest has continued to set itself apart from the competition especially the other low fare airlines by delivering its products in a reliable manner coupled with unmatched customer service. The company was incorporated in Dallas Texas on 18 th of June 1971 with its Boeing 737 plane serving three cities in Texas: Houston, San Antonio and Dallas. Currently, Southwest airlines are the US largest carrier in terms of passengers originating from the U.S. (Baker 2010, p.1). Financial Analysis Growth The total sales revenue made by Southwest airlines increased by a margin of 8.50 percent from the 2007 figure of to $ 9,086 to $9,861 in 2008. The company continued to register remarkable improvement in its sales revenues in 2009. The total sales revenues achieved stood at $ 11,023 representing an increase of 11.78 percent over the 2008 figure of $ 9861. However, in 2010, the company suffered a major shock following a drastic decline in its sales revenue by a margin of 6.1 percent ($10,350). The sharp decline can be attributed to the effects of the global crisis. Individuals and corporate bodies were forces to cut on their expenses; air fares included which led to a decline in sales for Southwest Airlines. However, the decline did not last for long as the company registered a significant increase in its sales revenue by a margin of 17 percent in 2011, with the total sales revenue standing at $ 12,104. According to the S&P 500 Capital IQ sales forecasts for the next five years, Southwest Airlines has a bright future as the sales are expected to grow by 3% in 2012; 5% in 2013; 8% in 2014; 9% in 2015 and 9% in 2016 respectively. This can be attributed to the fact that the U.S. economy which is the companys main market segment is on a recovery path, as people get back their jobs and their incomes increase, their travel expenses will equally increase. Profit Margin In 2008, Southwest Airlines revenues increased resulting in an increase in its profit margin from 5.49 percent in 2007 to 6.54 percent in 2008. However in 2009 and 2010 following the decline in the companys revenues, the profit margin dipped from 6.54 percent in 2008 to 1.61 percent in 2009 and a further decline to 0.96 in 2010. In 2011 however, the significant increase in its sales revenues resulted into an increase in its profit margin from 0.96 percent in 2010 to 3.79 percent in 2011 representing an increase of 2.83 percent. The significant drop in the profit margins in 2009 and 2010 is largely due to the impacts of the global crisis that led to reduced air ticket sales. Southwest airlines could not keep its margins up when its volume of sales declined. However, from the projections, the company will enjoy a stable profit margin over the next five years. The year 2012 is not yet the best year in the airline industry as most of the companies are still trying to cop up with the high fuel prices and