Longtime American Air CEO Bob Crandall remembers Herb Kelleher
Southwest (LUV) founder and former CEO Herb Kelleher died on Thursday, leaving behind the airline he created and many others whose business models he pioneered.
Kelleher ran his company with colorful personality and panache, but his rivals took him seriously. For decades, one of them was Robert L. Crandall, who ran American (AAL) in the ‘80s and ‘90s.
“Herb had a unique and appropriate philosophy,” Crandall told Yahoo Finance in a phone interview Friday. “He invented a model and the model was: ‘Let's do it in the simplest possible way.’ And at the same time: ‘Let's not do anything that's unpleasant.’”
‘He was always a man of absolute integrity’
Crandall echoed what floods of voices who said that Kelleher persuaded employees that they should have fun and that Southwest was a pleasant way to spend their work life.
“Herb was the leader of the tribe in terms of low-cost carriers,” said Crandall. “I’m not sure anyone has ever done it as well as he did it in terms of keeping employees on board and dedicated to the idea — and persuaded that they were getting a fair deal.”
Avoiding layoffs, making money, keeping it simple — these were Southwest’s hallmarks that Kelleher made. But as a rival, Crandall remembers a great man of integrity.
“He never varied. He was always a man of absolute integrity. I’ve never heard anyone say Herb cheated on this or that or broke his word on anything,” said Crandall. “To me he was a nice guy, a fun guy to be with, and a vigorous competitor. He and I had a lot of fun going back and forth when we were both growing in Dallas.”
Crandall said that he and Kelleher both flew on each other’s carriers regularly, and would tell his employees to do the same.
“I’d tell my employees, ‘You think you’re reinventing the world here? Go stand in the terminal at Love Field [in Dallas] and watch how they do it,” he said. “They were running a different kind of operation, but we certainly took some lessons from it. And I think they took some lessons from us.”
Not everyone knew that the two CEOs used to fly each other’s carrier, however.
“He's traveling on American and he's sitting next to my wife, they’re flying from Dallas or to New York or whatever, they're having fun and the flight attendants were offended. They called my wife over when she went to the john, and said, ‘Mrs. Crandall who is that man? Mr. Crandall isn't on the airplane and you shouldn’t be carrying on with that guy! She says, ‘Do you know who that is? That's Herb Kelleher!’”
‘We tore up the old model and built a new one’
Kelleher’s passing is another reminder that a golden age of air travel with big-personality executives is gone, while legacies like lower and lower prices remain.
“The personalities are not the same as they used to be, but of course you have to keep in mind in those years when Herb and I were active, we were remaking the industry,” said Crandall. “Deregulation occurred in ‘78, but all of us were considerably less constrained than today. We tore up the old model and built a new one. Herb had an opportunity to do what he wanted to do.”
Crandall noted that Southwest may not be particularly low-cost anymore compared to Spirit or Frontier, or even some of the point-and-spoke legacy carriers like Crandall’s American, but Southwest’s goodwill has remained by not straying from Kelleher’s strategy.
“They’ve hung on to some things that are very sensible,” Crandall said. “They’re not always a low-cost carrier, but if you take into account they don’t charge for one or two checked bags, and that you can keep money for the next trip when you cancel, they’ve avoided a lot of the unpleasant things that have irritated the customer base.”
In Crandall’s view, “Southwest wasn't willing to offer an inferior product and those people” — referring to the next generation of low-cost carriers that took Kelleher’s vision a step further into the bargain bin — “offer an inferior product.”
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Ethan Wolff-Mann is a writer at Yahoo Finance focusing on consumer issues, retail, personal finance, and more. Follow him on Twitter @ewolffmann.
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