A Comprehensive History of Southwest Airlines

Southwest Airlines started in 1967 to offer low-cost flights within Texas. Founders Rollin King and Herb Kelleher faced legal challenges but launched the airline in 1971. This article explores the history of Southwest Airlines, detailing its journey from a local Texas airline to a major industry player, highlighting key milestones and strategies.

Key Takeaways

• Southwest Airlines was founded in 1967 with a focus on low-cost air travel within Texas, overcoming significant legal challenges to launch operations in 1971.

• The airline became known for its innovative customer service strategies, including the ‘Bags Fly Free’ initiative and a commitment to maintaining a unique corporate culture centered on employee satisfaction.

• Southwest Airlines successfully expanded its operations beyond Texas and navigated industry crises, including the Wright Amendment restrictions, the 9/11 attacks, and the COVID-19 pandemic, while consistently emphasizing customer-oriented innovations.

A Comprehensive History of Southwest Airlines

Southwest Airlines was founded on March 15, 1967, by Rollin King and Herb Kelleher under the original name Air Southwest Co. Their vision was simple yet revolutionary: provide low-cost air travel within Texas, avoiding the complex federal regulations that governed interstate flights. However, this vision was met with significant legal challenges from established airlines who saw this new entrant as a threat.

Despite the hurdles, Southwest Airlines officially began operations on June 18, 1971, with a fleet of three Boeing 737-200 aircraft. The airline’s initial strategy focused on high-frequency, low-cost services within Texas, which set the stage for its future growth. The Wright Amendment, which restricted operations at Love Field, posed a significant challenge, but Southwest Airlines continued to thrive, focusing on customer-friendly policies and innovative marketing strategies.

Over the years, Southwest Airlines expanded beyond Texas, overcoming the limitations imposed by the Wright Amendment and growing into a major airline. Its commitment to low-cost travel and exceptional customer service has remained steadfast, even as it navigated industry crises and embraced modernization efforts. Southwest Airlines Co has played a significant role in this evolution.

Today, Southwest Airlines is celebrated for its unique corporate culture and dedication to making air travel accessible and enjoyable for all.

Introduction

In 2017, Hurricane Harvey wreaked havoc on Texas, and Southwest Airlines stepped up to the plate, showcasing its commitment to community and customer service. This incident is just one example of how Southwest has consistently gone above and beyond to meet the needs of its passengers. From connecting students with pilots through the Adopt-a-Pilot program to greeting employees like stars at the Southwest Airlines University, the airline has built a reputation for excellence and innovation.

Southwest’s route map has expanded significantly over the years, now including destinations in Central America and beyond. The airline’s ability to adapt and grow is evident in its plans to introduce new routes and end the open seating policy by 2026. Preliminary talks with DFW Airport also hint at exciting developments on the horizon.

As you delve deeper into the history of Southwest Airlines, you’ll see how these initiatives and more have shaped the airline into what it is today. From its early days in Texas to its current status as a major player in the airline industry, Southwest’s journey is a testament to vision, resilience, and an unwavering focus on customer satisfaction.

The Origins of Southwest Airlines

Southwest Airlines was born out of a unique partnership between Rollin King and Herb Kelleher, two visionaries who saw an opportunity to revolutionize air travel. Founded on March 15, 1967, as Air Southwest Co., the airline aimed to provide low-cost, intrastate flights within Texas to avoid federal regulations. This strategy was not just innovative but also a direct challenge to the status quo in the airline industry.

The early days were marked by informal meetings and a shared vision of making air travel accessible to more people. King and Kelleher’s business plan was simple: offer high-frequency flights at low costs, primarily connecting major Texas cities. The practical approach was to operate intrastate flights, thereby circumventing the need for federal aviation administration approval and regulation.

However, the path to success was fraught with legal challenges. Established airlines saw Air Southwest as a threat and did everything in their power to prevent it from taking off. Despite these obstacles, the airline was determined to move forward, laying the groundwork for what would become a significant player in the airline industry.

Overcoming Legal Hurdles

In 1968, Air Southwest sought approval from the Texas Aeronautics Commission to operate intrastate flights between major Texas cities. This move was met with fierce opposition from established carriers, who secured a restraining order to prevent the new airline from operating. The legal battle was intense, with Air Southwest navigating through a maze of legal obstacles that threatened its very existence.

The turning point came on May 13, 1970, when the Texas Supreme Court ruled in favor of Air Southwest, allowing the airline to proceed with its operations. This victory was a significant milestone, but the battle was not over. Competitors like Braniff and Texas International attempted to appeal to the U.S. Supreme Court, but their efforts were ultimately rejected. This legal triumph paved the way for Air Southwest to launch its services, marking the beginning of a new era in the airline industry.

Herb Kelleher, who played a crucial role in these legal battles, emerged as a formidable leader. His determination and strategic thinking not only helped the airline overcome these hurdles but also set the stage for its future success.

The legal victories underscored the resilience and tenacity of the airline, qualities that would define Southwest Airlines in the years to come.

Launching Operations

Southwest Airlines officially southwest began its operations on June 18, 1971, marking a significant milestone in the airline’s history. The initial fleet comprised three Boeing 737-200 aircraft, which were chosen for their efficiency and cost-effectiveness. The airline’s operational strategy focused on high-frequency, low-cost services within Texas, primarily connecting Dallas, Houston, and San Antonio. This approach was not only innovative but also catered to the needs of business travelers and other customers looking for affordable air travel.

Within just five months of its launch, Southwest introduced a $10 fare for late-night flights, which quickly gained popularity. This pricing strategy was part of Southwest’s broader goal to make air travel accessible to more people. Despite facing initial funding challenges, the airline managed to raise the necessary capital shortly before its inaugural flight, demonstrating its ability to overcome financial obstacles.

The commencement of operations was a monumental achievement, but it was just the beginning. The airline continued to refine its strategies, focusing on customer satisfaction and operational efficiency. The successful launch set the stage for Southwest’s future growth and established its reputation as a low-cost airline committed to providing exceptional service.

Early Marketing Strategies

M. Lamar Muse, the first president of Southwest Airlines, played a pivotal role in shaping the airline’s early marketing strategies. One of the most memorable aspects of Southwest’s marketing was its humorous safety announcements, which not only entertained passengers but also built a unique rapport with them. This approach was unconventional yet effective, setting Southwest apart from other airlines operating at the time.

Another significant campaign was the ‘Bags Fly Free’ initiative, which underscored Southwest’s commitment to customer-friendly policies. This campaign highlighted the airline’s dedication to providing value to its customers, a principle that has remained central to its marketing strategies. Herb Kelleher’s belief in creating memorable connections with customers through innovative employee interactions further reinforced this customer-centric approach.

Southwest’s marketing strategies were not just about selling tickets; they were about building a brand that customers could relate to and trust. By focusing on unique and engaging ways to connect with passengers, Southwest laid the foundation for a loyal customer base that would support its growth for years to come.

The $13 Fare War

In 1973, Braniff International Airways introduced a $13 fare for flights between Dallas and Houston, a move that ignited a fierce fare war with Southwest Airlines. In response, Southwest matched Braniff’s fare, offering passengers a choice between a $13 base fare or a $26 full fare ticket that included free liquor. This competitive pricing strategy not only attracted passengers but also positioned Southwest as a formidable competitor in the airline industry.

During the fare war, Southwest Airlines became the leading distributor of premium liquors in Texas, thanks to their promotional offers. This unique approach not only boosted ticket sales but also enhanced the airline’s brand image. The fare war was a critical period for Southwest, and by the end of it, the airline had achieved its first annual profit, a significant milestone that underscored its financial viability.

The $13 fare war demonstrated Southwest’s ability to adapt and innovate in the face of competition. It reinforced the airline’s commitment to providing low-cost travel options while maintaining a high level of service. This period of intense competition helped solidify Southwest’s position in the market and set the stage for future growth.

Surviving the Wright Amendment

The Wright Amendment, enacted in 1979, imposed significant operational limitations on Southwest Airlines by restricting flights from Love Field to only Texas and four neighboring states. This amendment was a major challenge for the airline, as it limited its ability to expand beyond these regions. However, Southwest Airlines used this restriction to its advantage by focusing on building a robust network within the permitted states.

In 1997, the Shelby Amendment allowed unrestricted flights from Love Field to Alabama, Kansas, and Mississippi, providing some relief. The full repeal of the Wright Amendment on October 13, 2014, marked a significant turning point for Southwest Airlines. The repeal led to a substantial increase in traffic at Love Field, with emplanements rising from 8.4 million in 2013 to 14.5 million in 2015.

Surviving the Wright Amendment required strategic thinking and adaptability. Southwest lobbied extensively and worked tirelessly to mitigate the restrictions imposed by the amendment. The eventual repeal allowed the airline to expand its operations significantly, opening up new opportunities for growth and further solidifying its position in the airline industry.

Expanding Beyond Texas

The deregulation era of the late 1970s and early 1980s marked a significant shift in Southwest Airlines’ strategy, allowing the airline to expand beyond Texas without facing judicial challenges. In 1979, Southwest initiated its first route outside of Texas, connecting Houston to New Orleans, which was a significant milestone in its expansion strategy. By the end of that year, the airline had added Amarillo and Beaumont to its growing network.

Southwest’s expansion continued throughout the 1980s and 1990s, with the airline entering new markets and establishing a strong presence in regions beyond Texas. The airline’s experience in Texas allowed it to set prices and frequencies effectively in newly entered markets, ensuring steady growth. By the end of the 1990s, Southwest had expanded its operations to serve numerous new destinations across the United States.

The expansion beyond Texas was a crucial period for Southwest, as it demonstrated the airline’s ability to adapt and thrive in a deregulated environment. By leveraging its experience and focusing on customer satisfaction, Southwest was able to grow its network and establish itself as a major player in the airline industry.

The 1980s Growth Spurt

The 1980s were a decade of significant growth for Southwest Airlines. In 1984, the airline expanded its fleet with the introduction of the Boeing 737-300 model, which provided increased capacity and efficiency. This fleet expansion was crucial for supporting the airline’s growing network and maintaining its commitment to low-cost, high-frequency service.

By 1982, Southwest had added new destinations, including Las Vegas and Los Angeles, further extending its reach and enhancing its market presence. The airline also implemented innovative pricing strategies, such as offering discounted one-way tickets to senior citizens, which helped attract a diverse customer base. These strategies underscored Southwest’s dedication to making air travel accessible to a broader audience.

In 1985, Southwest Airlines announced its plan to acquire Muse Air, marking a significant move in its expansion strategy. Throughout the decade, the airline maintained a strong on-time performance, which became a key aspect of its operational success and customer satisfaction. The 1980s growth spurt solidified Southwest’s position as a leader in the low-cost airline segment, paving the way for future achievements.

Entering the 1990s

The 1990s marked a period of continued expansion and innovation for Southwest Airlines. In 1996, the airline renamed its frequent-flyer program from The Company Club to Rapid Rewards, reflecting its commitment to rewarding loyal customers. The original Rapid Rewards program awarded one credit for each one-way flight, with 16 credits earning a free round-trip ticket. This program quickly became popular among frequent travelers, further enhancing customer loyalty.

During this decade, Southwest Airlines focused on expanding its operations and increasing destination choices. The airline’s strategic approach to growth ensured that it could enter new markets effectively while maintaining its low-cost structure. The 1990s also saw Southwest enhancing its reputation for customer service and operational efficiency, which became hallmarks of its brand.

The 1990s set the stage for Southwest’s future success, with the airline continuing to build on its strong foundation of customer-centric policies and efficient operations. This period of growth and innovation reinforced Southwest’s position as a major player in the airline industry, ready to face the challenges of the new millennium.

Post-9/11 Challenges

The events of September 11, 2001, had a profound impact on the airline industry, and Southwest Airlines was no exception. Southwest was the first airline to resume flights on September 14, 2001, demonstrating its resilience and commitment to serving its passengers. The leadership team quickly executed logistical solutions to restart operations and create new flight schedules, ensuring minimal disruption for travelers.

Herb Kelleher, Southwest’s founder, played a crucial role in shaping new security protocols after the attacks and advocating for customer rights within the industry. Despite the financial challenges posed by the post-9/11 economic downturn, Southwest managed to turn a profit by the end of 2001, a remarkable achievement given the circumstances. The company also maintained its profit-sharing commitments to employees, underscoring its dedication to its workforce even during tough times.

Southwest’s response to the 9/11 challenges highlighted its strong leadership and operational resilience. The airline’s ability to adapt quickly and maintain financial stability during this period reinforced its reputation as a reliable and customer-focused carrier. Southwest’s commitment to its employees and customers during these challenging times set a standard for the industry.

Merging with AirTran Airways

In September 2010, Southwest Airlines announced the acquisition of AirTran Airways, marking a significant milestone in its growth strategy. The purchase, completed in 2011 for approximately $1.4 billion, allowed Southwest to expand its routes and integrate AirTran’s fleet into its operations. This acquisition was a strategic move to enhance Southwest’s market presence and offer international routes to destinations like Cancún and Montego Bay.

AirTran’s fleet, which mostly consisted of Boeing 737-700s, was seamlessly integrated into Southwest’s operations, providing additional capacity and flexibility. The merger also strengthened Southwest’s presence in key markets such as Atlanta and Milwaukee, offering more options for business and leisure travelers alike. The final scheduled flight of AirTran Airways took place on December 28, 2014, marking the end of an era and the beginning of a new chapter for Southwest.

The merger with AirTran Airways was a transformative event for Southwest, allowing the airline to expand its network and enhance its service offerings. This strategic acquisition demonstrated Southwest’s commitment to growth and innovation, positioning the airline for continued success in the competitive airline industry.

Modernization Efforts

Southwest Airlines has continuously invested in fleet modernization to enhance its operational efficiency and customer experience. Following the court victory that secured funding for its fleet, Southwest acquired Boeing 737-200 aircraft, which became the backbone of its operations. In 1990, the airline introduced its first Boeing 737-500, marking an important milestone in its fleet modernization efforts.

In 1997, Southwest accepted the Boeing 737-700 Next Generation, which offered improved performance and reliability. The airline’s commitment to modernization continued in 2011 when it became the launch customer for the Boeing 737 MAX, representing a significant upgrade in efficiency and technology. These investments in modern aircraft have allowed Southwest to maintain its competitive edge and offer enhanced services to its passengers.

In 2019, Southwest expanded its route network by adding Hawaii to its service offerings, further demonstrating its commitment to growth and customer satisfaction. The airline is also implementing assigned seating options to enhance the customer experience while maintaining a fast boarding process. These modernization efforts underscore Southwest’s dedication to providing a superior travel experience for its customers.

Navigating Industry Crises

The airline industry has faced numerous crises, and Southwest Airlines has navigated these challenges with resilience and strategic foresight. The grounding of the Boeing 737 MAX in 2019 had a significant impact on Southwest’s operations, resulting in the airline operating with 60 fewer aircraft than planned. The financial impact of the MAX grounding amounted to approximately $435 million in 2019, highlighting the severity of the crisis.

In early 2020, Southwest had to remove the 737 MAX from its flight schedule until June to allow for pilot training, further complicating its operational planning. Despite these challenges, Southwest reached a confidential agreement with Boeing in December 2019 regarding compensation for the MAX grounding, demonstrating the airline’s ability to manage complex negotiations and safeguard its financial interests.

The COVID-19 pandemic presented another significant challenge, drastically reducing air travel and affecting Southwest’s operations and financial status. The airline faced substantial operational adjustments, including canceled flights and reduced capacity, but remained focused on maintaining stability and preparing for recovery.

Southwest’s ability to navigate these industry crises underscores its resilience and strategic adaptability.

Southwest's Corporate Culture

Southwest Airlines is renowned for its unique corporate culture, which is built on the guiding motto of the Golden Rule: treating others as you wish to be treated. This principle is reflected in the airline’s hiring practices, which prioritize attitude over skill, ensuring that employees embody the positive, customer-centric ethos of the company. Herb Kelleher and Colleen Barrett emphasized a culture where employee happiness takes precedence, believing that satisfied employees lead to satisfied customers.

Barrett’s management philosophy aligns with ‘servant leadership,’ focusing on serving the needs of employees first. Rituals like surprise employee appreciation events and public acknowledgments of exceptional staff contributions are integral to maintaining Southwest’s unique culture. The ‘Heroes of the Heart’ program, created by Barrett, celebrates behind-the-scenes employees for their contributions, further reinforcing the airline’s commitment to recognizing and valuing its workforce.

Southwest’s corporate culture encourages employees to express their true selves at work, creating a family-like atmosphere that enhances customer service. This culture of active involvement and mutual respect has been a cornerstone of Southwest’s success, fostering a loyal and motivated workforce that is dedicated to providing exceptional service to passengers.

Innovations in Customer Service

Southwest Airlines has consistently been at the forefront of customer service innovation. The airline has improved its online capabilities, allowing passengers to manage bookings and check in easily from mobile devices. This digital transformation has significantly enhanced the customer experience, making it more convenient and user-friendly.

The airline’s fleet now includes upgraded WiFi technology, providing significantly faster internet speeds for passengers. New Boeing 737 MAX aircraft feature larger overhead bins and in-seat power ports for charging devices, addressing common passenger needs and enhancing in-flight comfort. Additionally, the Rapid Rewards program allows members to earn and redeem points without blackout dates, ensuring that points do not expire, which has been a key feature of Southwest’s customer loyalty strategy.

Southwest also introduced digital bag tracking for checked luggage, enabling passengers to monitor their bags throughout the journey. The airline’s policy of offering two free checked bags with every ticket remains a cornerstone of its customer service approach, providing added value and convenience for travelers. These innovations reflect Southwest’s commitment to continuously improving the customer experience and maintaining its reputation as a customer-centric airline.

Celebrating Milestones

Southwest Airlines celebrated its 50th anniversary on June 18, 2021, marking half a century of service and innovation. To commemorate this milestone, the airline gifted employees 50,000 Rapid Rewards points, recognizing their contributions to the company’s success and fostering a sense of pride and loyalty among the workforce. This gesture was a testament to Southwest’s ongoing commitment to its employees and their well-being.

As part of the 50th anniversary celebrations, Southwest introduced ‘Freedom One,’ a Boeing 737-800 featuring a patriotic design to honor its service and the military. This special aircraft symbolized the airline’s dedication to its core values and its appreciation for the nation’s armed forces.

The anniversary celebrations also highlighted Southwest’s status as the largest domestic airline in the United States, carrying approximately one in four travelers, surpassing many major airlines.

Over its first fifty years, Southwest Airlines expanded its operations to serve 121 destinations across North America, demonstrating its growth and commitment to providing accessible air travel. The 50th anniversary was not just a celebration of past achievements but also a reaffirmation of Southwest’s vision for the future, as the airline continues to innovate and expand its services.

Summary

Southwest Airlines’ journey from a small intrastate carrier to a major player in the airline industry is a testament to its vision, resilience, and customer-centric approach. From overcoming legal hurdles and launching innovative marketing strategies to navigating industry crises and embracing modernization, Southwest has consistently demonstrated its ability to adapt and thrive. The airline’s unique corporate culture and commitment to customer service have been central to its success, fostering a loyal customer base and a motivated workforce.

As Southwest Airlines continues to grow and innovate, it remains dedicated to its founding principles of providing low-cost, high-quality air travel. The airline’s story is one of continuous improvement and unwavering focus on customer satisfaction, setting a standard for the industry. Southwest’s remarkable journey is a source of inspiration, demonstrating that with vision, determination, and a customer-first approach, success is not just achievable but sustainable.

Frequently Asked Questions

When was Southwest Airlines founded?

Southwest Airlines was founded on March 15, 1967, originally as Air Southwest Co.

What was the significance of the Wright Amendment for Southwest Airlines?

The Wright Amendment significantly limited Southwest Airlines' expansion by restricting operations at Love Field to Texas and four neighboring states until its repeal in 2014. This constraint hindered the airline's ability to broaden its network and connect with more destinations.

How did Southwest Airlines respond to the $13 fare war initiated by Braniff?

Southwest Airlines effectively responded to Braniff's $13 fare war by matching the fare, offering passengers the option of a $13 base fare or a $26 full fare ticket with free liquor. This contributed to Southwest achieving its first annual profit. This strategic pricing decision underscored their commitment to competitive service and financial success.

What was the impact of the AirTran Airways merger on Southwest Airlines?

The merger with AirTran Airways significantly enhanced Southwest Airlines' route network and enabled it to offer international destinations, thereby strengthening its competitive position in the market. This strategic acquisition facilitated fleet integration and overall operational expansion.

How has Southwest Airlines maintained its unique corporate culture?

Southwest Airlines has maintained its unique corporate culture through a strong emphasis on the Golden Rule, prioritizing employee happiness and mutual respect. This approach, rooted in servant leadership, enhances both employee satisfaction and customer service.