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.

Kelleher's Southwest pioneered 'no-frills' service.

Back in the ‘70s, airlines that flew across state boundaries were tightly regulated by the federal government but Southwest, operating entirely within Texas, was free to innovate. Its base was at Love Field in Dallas, and it adopted the slogan “The somebody else up there who loves you.” The ‘love’ theme came from hiring what in 1971 The New York Times described as “the most shapely girls in the air” – they were then known as hostesses but more recently as flight attendants. They wore tangerine hot pants and were encouraged to be friendly. According to a biography distributed by Muse’s children after his death, the outfits were designed by his first wife Janice Gunn Muse.

DFW's massive boost for Southwest

SWA’s first major opportunity came with the opening of Dallas/Fort Worth International Airport (DFW), situated midway between the two cities. Airlines that previously served Dallas Love Field (DAL) and Fort Worth’s Greater Southwest Airport (GSW) all signed an agreement to move their entire operations to the new airport. Muse contended, however, that SWA had neither signed nor had ever been asked to sign such an agreement, and as a result it could remain at DAL. Muse and SWA won the resultant court action and with every other carrier moving to DFW, Southwest had DAL to itself. Despite still being limited to serving destinations within Texas, SWA rapidly became an extraordinary success because of the remoteness of DFW and the vast distances separating the state’s largest cities.

Muse left SWA in 1978 and Herb Kelleher took his place, intent on expanding the airline significantly. A limiting factor was the Wright Amendment, an 1979 Federal Law proposed by Fort Worth Congressman Jim Wright that aimed to protect DFW. The amendment applied to the 1978 US Airline Deregulation Act, which swept away most restrictions on where airlines could operate, what routes operators could fly, and what fares were charged.

The Wright Amendment

The Wright Amendment constrained SWA to the states immediately surrounding Texas until its repeal more than thirty years later but Kelleher found a way around it. He opened bases outside Texas from where the airline could fly to destinations further afield – they also enabled SWA to link Texas to the rest of the country by operating one-stop services originating or ending in Texas. Kelleher’s lateral thinking gave rise to Southwest Airlines as it is today.

Kelleher also took the marketing flair shown by Lamar Muse to new heights. In the early ‘90s a lawsuit involving Herb Kelleher and Kurt Herwald (chairman on Greenville, SC based Stevens Aviation) disputing the use of an advertising a slogan was settled with an arm wrestling match. Kelleher lost but Herwald allowed Southwest to use the term "Just Plane Smart" for a fee.

Boeing 737s all the way

Boeing 737s have been the cornerstone of Southwest's operations since they started.

Southwest flew Boeing 727-200s between 1979 and 1987, but settled on the Boeing 737 which it started out with and had been in its fleet since 1971. The last of the original twin-jets was retired in 2005, by which time 737-300s and 737-500s predominated. The final few 737-classics were parked in 2017. The fleet now comprises around 750 Boeing 737-Next Generation aircraft, centred on the -700 and stretched -800 series operating alongside newer 737–MAX8 variants that were introduced in October 2017 – deliveries of the smaller –MAX7 variant will commence later this year. Southwest also acquired AirTran Airways 2011, but the Atlanta based carrier’s 88 Boeing 717-200s were only retained until 2013 and were then acquired by Delta Air Lines.

A change at the top

Kelleher's run as President and CEO of Southwest Airlines came to an end in 2001 when he stepped down from the roles to be succeeded by long time Southwest executive Gary C Kelly, who still remains at the helm. Kelleher finally retired from Southwest permanently in 2008 when he also stepped down as Executive Chairman, another roll assumed by Kelly.

Boeing 737-7H9 N711HK is named 'The Herbert D Kelleher' (Eddie Maloney)

The passing of Rollin King in June 2014 - and Kelleher on January 3, 2019 - leaves leaves Colleen Barret as the last surviving member of the original Southwest Airlines team, as Lamar Muse passed away in 2007. Each were honoured by having their name at painted on the side of a Southwest aircraft, but the carrier's overwhelming legacy is considered to be that of Herb Kelleher.

Legacy

Airlines around the world have emulated Southwest's business model, which has brought low-cost air travel to masses. Budget carriers that credit Southwest – and Kelleher – with providing inspiration include Ryanair (Ireland), easyJet (UK, Austria & Switzerland), Jetstar (Australia), Tiger Airways (Australia), Air Asia (Asian countries), Wizzair (Hungary) and Lion Air (Indonesia).

Southwest Airlines also pioneered the single type aircraft fleet, which brought with it simplicity of operation and ease of maintenance while reducing costs. It is the biggest operator of the 737, having had more than 1000 airframes (283 retired and 750 current) in its inventory over its 50 years history and accounting for almost 10% of all those built.

Wright Amendment in detail

The Wright Amendment became an intrinsic part of Southwest's success, even though that was not the intention when aviation law was changed. While it initially limited the airline's operations, it eventually enabled the carrier to leverage its position at Love Field Airport and grow across the continental USA.

Early 1960s: The Federal Aviation Administration declared Love Field in Dallas and Greater Southwest International Airport in Fort Worth unsuitable for project future traffic demands and refused to provide continued federal funding for expansion.
1964: The Civil Aeronautics Board ordered the two airport authorities to merge on a joint regional site, with the intent that both Love Field and Greater Southwest International would then be closed down.
1965: Dallas and Fort Worth established an interim joint board to decide the site for a new airport site, eventually settling on a location midway between the cities of Dallas and Fort Worth. The new airport was named Dallas/Fort Worth International - or DFW.
1968: Ground was broken at the DFW site. To make the new airport viable each city agreed to restrict commercial passenger service at its own airport. Airlines operating from each agreed to relocate to DFW.
1971: Southwest Airlines refused to move out of Love Field when the other airlines left, claiming the move would affect its business model; Southwest began service from Love Field to Houston and San Antonio.
1972: The cities of Dallas and Fort Worth, and the airport board, took legal action over Southwest’s insistence on remaining at Love Field.
1973: The US Supreme Court ruled in favour of Southwest, stating that as long as Love Field remained open as an airport Southwest could do business there.
1974: DFW officially opened for business; Love Field faced a drastic dip in number of flights and most of its concourses were decommissioned.
1978: The Federal Airline Deregulation Act removed government control over air fares and routes, and encouraged airlines to compete freely by allowing new carriers unrestricted entry into the marketplace.
1979: Southwest Airlines delved into the market outside Texas when it started to offer interstate service from Love Field. The plan further angered Fort Worth and DFW.
1979: To protect DFW from losing business, Fort Worth Congressman Jim Wright pushed through the Wright Amendment, limiting Southwest’s non-stop operations to those within Texas and to the states of Louisiana, Arkansas, Oklahoma and New Mexico
1990s: DFW International Airport’s annual air traffic exceeded its design capacity.
1996: A study suggested that repealing the Wright Amendment and reopening Fort Worth Alliance Airport to passenger service would effectively provide DFW with two reliever airports. DFW refuted the proposal.
1997: Alabama Senator Richard Shelby passed the Shelby Amendment by adding Alabama, Kansas and Mississippi into the Wright zone and enabling Southwest to expand its network.
2004: Southwest CEO Gary Kelly called the Wright Amendment ‘outdated and outmoded’ and started attempts to repeal it with a massive public relations campaign. DFW and American Airlines responded with their own campaigns.
2005: Southwest threatened to leave Dallas unless the Wright Amendment was repealed.
2006 – October 13: President George W Bush signed a bill into law that repealed the Wright Amendment. Southwest, American, DFW and the cities of Dallas and Fort Worth all accepted the repeal, but with conditions. These included the Wright zone restrictions remaining in place until 2014, lowering Love Field's gate count from 32 to 20, and maintaining its status as a domestic-only facility.
2006 – October 17: Southwest announced that it was to launch indirect connecting services between Love Field and destinations outside the Wright zone.
2011 - May: Southwest acquired AirTran Airways, ging the carrier access to international destinations for the first time. The Wright Amendment stilled barred it from operating nonstop flights from Texas to airports outside the USA.
2014 - October 16: The Wright Amendment expired.

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Aviation: The airline Herb built