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Aviation: The airline Herb built

Back in the early 1970s, a startup airline in Texas took on the US majors. Through a combination of flare, entrepreneurship, and a little bit of luck it became one of the most highly regarded carriers in the USA. To mark the passing of its visionary co-founder Herb Kelleher, Tyler McDowell recounts the story of Southwest Airlines.

Now more than ever the low-cost airline business model is booming, forcing even long-established legacy carriers to adopt a similar approach for short-haul services. However, budget operations had humble beginnings more forty years ago thanks, in part, to New York native Herbert D Kelleher who passed away on January 3, 2019 aged 87.

Herb Kelleher

Kelleher was a lawyer who, having graduated in New York, moved to Texas in the mid 1960s to start his own law firm. He met Rollin King, a client, and discussed King's idea for an airline. The idea concept involved serving the three biggest cities in the state of Texas – Dallas, Houston and San Antonio – while setting fares that undercut the American Airlines, Continental Airlines and Braniff International Airlines which dominated the markets at the time. Kelleher and Rollins formed Air Southwest in 1967 but the launch of services was continuously delayed by litigation from Continental and Braniff.

The birth of a budget carrier

It took four years to resolve the legal disputes but the fledgling airline - by then renamed Southwest Airlines - finally began operating in 1971. Texan industry veteran M Lamar Muse was brought on board and became the new airline’s first president. When he arrived Southwest Airlines (SWA) had no aircraft, it was tens of thousands of dollars of debt, and it had about $100 in the bank. Nevertheless he managed to negotiate the purchase of three Boeing 737-200s from Boeing, and SWA immediately began services between the three largest cities in Texas. Like King and Kelleher, Muse believed that fares charged for intrastate services were artificially high, so SWA charged half of that demanded by its competitors.