Southwest Airlines grew to become the US's largest domestic carrier by offering free checked baggage, easy-to-change tickets — and still sticks to unassigned seats
Southwest Airlines, the US's largest domestic carrier, experienced an operations meltdown in this holiday season.
Despite its problems, Southwest celebrates its customer- and employee-focused mission.
The airline found success using unconventional marketing strategies focused on humor, booze, arm wrestling, and go-go boots.
Southwest Airlines is the US's largest domestic carrier, serving over 100 destinations across the country. The carrier has been in operation since 1971 and just celebrated its 51st anniversary in June.
Source: Southwest
With Southwest's immense size, it has a lot of systems at play to keep it running efficiently and on time. But, sometimes a nasty winter storm can derail even the best carrier's operations.
But, Southwest suffered from more than just the weather in the holiday season of 2022.
Captain Mike Santoro, vice president of the Southwest Airlines Pilots Association, told Insider the storm was the catalyst of the meltdown, but "outdated" scheduling software created the snowball.
Southwest confirmed to Insider that its systems were unable to handle the "magnitude" of disruptions, which amounted to over 7,000 from Christmas to December 28 alone.
Source: FlightAware
The company acknowledged its software needs an update, with a spokesperson saying, "we are focused on making investments in technology upgrades to work toward that solution."
Despite its operations issues in the holiday season of 2022, Southwest prides itself on being a customer- and employee-focused airline, bringing "LUV" to its operation, and keeping safety, hospitality, and customer service at the forefront of its mission. (LUV is its stock symbol.)
According to financial information company BrightScope, Southwest has one of the highest-rated employee 401k plans. Meanwhile, J.D. Power reported in May that customers ranked Southwest as having the best economy product in North America.
Source: BrightScope, J.D. Power ranked airlines across 3 fare classes according to its annual customer satisfaction survey — see the results
Haley Woods, founder of Girls LOVE Travel — a Facebook group with over one million members — told Insider that when her flight was canceled over the holiday week, she encountered the most "professional" and "upbeat" Southwest employees.
"While this disruption might derail others from using SWA in the future — their customer kindness has reminded me that I will absolutely be looking past this and onward for future adventures," she said.
While it's could still lose some trust from customers, Southwest is likely to eventually bounce back. See how the airline has grown over the years to be the powerhouse it is today.
Source: Southwest Airlines
Southwest started as a small carrier based in Texas and only operated intra-state routes between three cities, San Antonio, Houston, and Dallas. The airline, which was originally called Air Southwest, was dreamt up by Rollin King and Herb Kelleher on a cocktail napkin in 1966.
Source: Southwest
King mapped the network he envisioned, making a triangle between the three key cities. He explained to Kelleher that operating solely in Texas would make the company exempt from the Civil Aeronautics Board's federal regulations, which controlled fares, routes, and schedules.
Source: Southwest
From 1938 to 1978, the airline industry was federally regulated under the CAB as means to ensure major carriers like United and Pan Am were profitable. Fares were sky-high and only business travelers and deep-pocket leisure customers could afford the luxury of flight. The downside was that a lot of the time, planes flew half-empty.
Source: Smithsonian National Air and Space Museum
Because Air Southwest was certified under the state's aviation regulator, the Texas Aeronautics Commission, it was not bound to federal rules — a clever loophole King unapologetically copied from California carrier Pacific Southwest Airlines.
Source: Southwest
The loophole allowed Air Southwest to fly freely in Texas and undercut competitors' fares, offering more customers the option to fly instead of drive in the large state. The business model was game-changing and a threat to legacy airlines.
Source: Southwest
In 1967, three airlines operating under federal rules, Braniff, Trans-Texas Airways, and Continental Airlines, took legal action against Air Southwest, saying it does not have the right to fly in Texas.
Source: Companies History
The lawsuit took three years to resolve, and in 1970, the Texas Supreme Court ruled Air Southwest could fly in the state. The three airlines then took the case to the US Supreme Court, which declined to review it.
Source: Companies History
Air Southwest's right to fly in Texas was finalized in December of 1970. The carrier officially changed its name to Southwest Airlines in 1971 and commenced operations on June 18 of the same year.
Source: Companies History
The carrier launched with two routes from Dallas Love Field to Houston and San Antonio using three new Boeing 737-200 aircraft. Flights between Houston and San Antonio commenced in November 1971.
Part of Southwest's immense success was due to Kelleher's focus on unconventional marketing and unique corporate culture.
Source: Southwest
Kelleher used Pacific Southwest Airways' idea of "Long Legs And Short Nights" for hostesses, as they were called at the time, keeping with the theme of hiring attractive women to work Southwest flights.
Source: Companies History
The airline's first flight attendants were described as long-legged dancers and were handpicked by a committee that included the same individual who picked the hostess on Hugh Hefner's Playboy jet.
Source: Companies History
Kelleher dressed the flight attendants in a bright orange top, orange hot pants, a white belt around the hips, and white side-laced go-go boots. He also pushed for a laid-back, casual inflight experience and only hired female hostesses who were fun, engaging, and had a sense of humor.
Source: Texas Monthly
Southwest also provided a winter version of the uniform, which included orange and white striped hot pants, a blazer, a white top, and an ascot.
Source: Texas Monthly
Kelleher continued the playboy theme by creating a "love" culture at Southwest. The carrier was called the "love airline,” automatic ticket dispensers were "love machines," inflight snacks were "love bites," and drinks were "love potions."
Source: Texas Monthly
The airline also crafted its own special inflight cocktails, which were free for passengers. A few were appropriately named Kentucky Matchmaker, the Pucker Potion, and the Lucky Lindsay.
Source: Texas Monthly
He even went on to create ads centered around humor and attractive women. In the context of the 1970s, using attractive female flight attendants to gain customers was an industry norm.
Source: Texas Monthly
In 1972, Southwest made a game-changing, innovative marketing move. The company introduced the "two-tier" fare system, which established two separate price points aimed at different types of travelers.
Source: Southwest
The fares were the regularly priced "Executive Class Service" at $26 one-way and the "Pleasure Class" at $13 one-way or $25 roundtrip. "Pleasure Class" fares were available after 6:59 p.m. on weekdays and all day Saturday and Sunday.
Source: Southwest
The two-tier structure was a wild success, with Southwest increasing its average passenger load from 17 before the move to 75 after.
Source: Southwest
In 1973, the company launched a $13 one-way "half-fare" sale on all flights to San Antonio. Southwest's rival, Braniff, responded with its own "get acquainted sale" with $13 fares between Dallas and Houston. This was the start of the $13 Fare War.
Source: Southwest
Southwest knew $13 fares on its only profitable route would run it straight into bankruptcy, so King quickly came up with a marketing campaign that would put Southwest on top. "Nobody's going to shoot Southwest out of the sky for a lousy $13," read the bold ad.
Source: Southwest
Southwest matched Braniff's fare between Dallas and Houston, which was met with praise and respect from customers. As part of the campaign, the airline also offered a free fifth of liquor for passengers who paid the full $26 fare.
Source: Southwest
Business travelers loved the promotion, and lucky for Southwest, three-fourths of its customers opted to pay full price and pocket the free booze. The airline soon became a fan favorite among many Texas business communities, and Braniff was fuming.
Source: Southwest
By the end of 1973, Southwest finally turned its first profit and would continue to profit for 47 years until the coronavirus pandemic ended the streak. Meanwhile, Braniff lost the battle and the war, ceasing operations in 1982.
Source: Southwest, Braniff International Airways Boutique
Southwest's early challenges did not end with Braniff. In 1964, the Civil Aeronautics Board demanded the city of Dallas build an airport to serve the entire Dallas/Fort Worth area. In 1968, every air carrier operating out of Love Field agreed to move to DFW when it opened in 1974.
Source: Encyclopedia.com
However, Southwest was not a part of that agreement and filed suit that it would not move from Love Field when the new airport opened. The airline claimed there was no legal reason to end commercial traffic at Love Field and that the company made no written agreement to move its operations.
Source: Encyclopedia.com
The city and the DFW Airport Board sued Southwest, saying the CAB rule applied to the airline even if it was made before Southwest was officially founded. However, Southwest argued that its intra-state flights fell outside the jurisdiction of the CAB, so it did not have to leave Love Field.
Source: Encyclopedia.com
A federal district court agreed with Southwest and ruled that it could operate out of the airport as long as it remained open. When DFW opened in 1974, every airline except Southwest left Love Field.
Source: Encyclopedia.com
Southwest continued to grow through the 70s, acquiring 10 aircraft and carrying its five-millionth customer by the end of 1977.
Source: Southwest
By 1976, Southwest Airlines had been profitable for three years and proven that government regulation was not necessary for airlines to be successful. Deregulation was a top priority for Jimmy Carter's administration, and it passed the Airline Deregulation Act in 1978, effectively abolishing the Civil Aeronautics Board.
Source: National Review
Finally, Southwest Airlines was free to operate interstate flights and the airline began to thrive. Meanwhile, major carriers like Eastern Airlines, Trans World Airlines, and Pan Am spread themselves too thin as they tried to rapidly expand.
Source: US Centennial of Flight Commission
Unlike major carriers, Southwest maintained a simple strategy for success after deregulation, like only operating one aircraft type, cleaning the aircraft before landing to allow for a quicker turn, and focusing on humor in marketing.
Source: USA Today
And its strategy worked. Southwest was prospering while other airlines like Pan Am and TWA collapsed. However, it was not long before the Wright Amendment put another wrench in the company's plans.
After deregulation, Southwest wanted to commence interstate flights from Love Field to New Orleans in 1979, but officials at DFW airport feared the increased traffic would hurt the airport financially. So, US Congressman Jim Wright drafted, sponsored, and helped pass a bill restricting passenger traffic at Love Field.
Source: Southwest
The law, known as the Wright Amendment, was signed in early 1980 and amended the International Air Transportation Act of 1979. It restricted flying out of Love Field to cities in Texas and the surrounding states of Louisiana, Oklahoma, Arkansas, and New Mexico. The law was meant to keep Southwest from expanding operations out of Dallas.
Source: The Dallas Morning News
It only applied to carriers that operated aircraft with more than 56 seats, which Southwest did. So, the airline had to rely on short-haul flights in the five-state area to bolster Love Field operations.
Source: The Dallas Morning News
In 1997, Kansas, Alabama, and Mississippi were added to the list of reachable states. In 2005, Missouri was also added.
Source: The Dallas Morning News
However, in 2004, Southwest CEO Gary Kelly launched efforts to repeal the Wright Amendment, using the slogans "Set Love Free" and "Wright is Wrong" in the campaign.
Source: Southwest
In 2006, an agreement was made between Southwest, American Airlines, Dallas, and Forth Worth to phase out the law. They agreed that in eight years, the amendment would be gone, but until then, carriers could fly to any US destination out of Love Field as long as at least one stop was made in any of the nine states under the Wright Amendment.
Source: Southwest, The Dallas Morning News
On October 13, 2014, at exactly 12:01 a.m., a countdown clock at Southwest's Headquarters in Dallas hit zero, officially ending the Wright Amendment. A few minutes after, the airline's first scheduled flight outside of the nine Wright states took off from Love Field to Denver.
Source: Southwest
The deal also capped the number of gates at Love Field to 20, and the airport still only has 20 to this day.
Source: The Dallas Morning News
While the Wright Amendment restricted expansion out of Love Field, Southwest was still able to bolster its network out of other Texas cities in the 1980s, 1990s, and 2000s.
Throughout the 1980s, the airline expanded north into cities like Tulsa, Oklahoma City, and Kansas City, and west to Phoenix, Las Vegas, Albuquerque, and California. The airline moved east in the late 1980s with flights to Nashville and into the Midwest with flights to Chicago Midway and Detroit.
Source: Southwest
The airline also updated its livery in the 1980s. Southwest wanted to stand out in the skies and make its brand easily recognizable, so it wrapped its fuselage in desert gold and other warm colors. It received its first 737-300 jet in 1984, dubbed Spirit of Kitty Hawk.
Source: Southwest
Southwest's flight attendant uniform was also updated by the 80s. Instead of hot pants and go-go boots, the airline allowed employees to wear real pants and skirts.
Source: Racked
In the 1990s, the network expanded further east to cities like Baltimore, Cleveland, Columbus, Tampa, Fort Lauderdale, Providence, Islip, and Raleigh-Durham. The airline also began its Pacific Northwest expansion with the acquisition of Morris Air in 1994.
Source: Southwest
In 1991, the "Friends Fly Free" campaign was launched to battle the recession. The promotion allowed anyone 18 or older to bring a friend of any age free on their flight. It was so popular that Southwest offered the promotion for the next five years.
Source: Southwest
In 1992, Southwest's most infamous marketing stunt occurred between Herb Kelleher and Kurt Herwald, chairman of Stevens Aviation.
Source: Southwest
Southwest had been using the slogan "Just Plane Smart" in its ads, but Stevens Aviation sent a letter to Kelleher noting its similarity to its "Plane Smart" slogan.
Source: Southwest
Instead of entering a legal battle over the phrase, a Steven Aviation executive suggested an arm-wrestling competition between Herwald and Kelleher. The victor would have full rights to the slogan.
Source: Southwest
Kelleher marketed the event, dubbed the "Malice in Dallas," which received worldwide press coverage. "Smokin" Herb Kelleher and "Curtsy" Kurt Herwald put on a full show at the arena, which even earned a congratulatory note from President George Bush.
Source: Southwest
At the turn of the century, Southwest revealed the livery that most people know today. The Canyon Blue color scheme debuted in January 2001.
Source: Southwest
While many airlines opted to introduce fees for things like checked bags and flight changes to recuperate funds, Southwest refused. Instead, the airline launched its "bags fly free" campaign which allows customers two complimentary checked bags. Southwest has not gone back on the offer to this day.
Source: Southwest
Throughout the 2000s, Southwest continued to focus on humor in its marketing. Its Wanna Get Away commercials proved successful, which promoted $49 one-way fares.
Source: Southwest
By 2010, Southwest added "Transfarency" to its brand. The airline would not have any hidden fees and would remain customer-focused with an emphasis on Hospitality and Heart. The recognizable tri-color heart was added to its airplanes and workplace.
Source: Southwest
In 2011, Southwest acquired AirTran Airways, which opened slots up out of Atlanta and gave it more network expansion opportunities in Mexico and the Caribbean. The two were fully integrated by 2014.
Source: Southwest
Also in 2014, the company's livery got another new look, with a harder focus on the heart, a new logo, and a sleek new color scheme.
Source: Southwest
In July 2014, the airline officially became international with its first flight to Oranjestad, Aruba. In the same month, Southwest also started service to Nassau, Bahamas, and Jamaica.
Source: Southwest
The company's flight attendant uniform got an update in 2017, marking the first time in 20 years the airline changed the look. Womenswear included two dresses, one black with blue and red stripes and the other gray with red and black stripes. Menswear included a black blazer, a gray shirt and pants, and a red tie.
Source: Travel + Leisure
In October 2017, Southwest became the launch customer for the Boeing 737 MAX 8 jet, with its first revenue flight occurring on October 1. However, the aircraft was grounded in 2019 after two fatal accidents involved the MAX. The airline did not fly the plane again until March 2021.
Source: Southwest
In 2019, Southwest reached its goal of operating flights to Hawaii with its inaugural service from Oakland to Honolulu.
Source: Southwest
In 2020, Southwest ended its 47-year profit streak when the coronavirus pandemic hit. Since last March, the airline has remained focused on the health and safety of its customers and employees.
Source: CNN
While the pandemic was a major blow to Southwest's operation, the carrier has continued to grow with 18 new cities announced in 2020.
Source: Southwest
And, it is continuing to expand with new routes and destinations, thanks to newly-appointed CEO Bob Jordan, who took over in February 2022.
Since the pandemic, Southwest has become profitable again and, like other carriers, is trying to keep up with the surge in air travel.
Source: Southwest
Despite its operations meltdown over the holiday of 2022, the carrier has vowed to get its operation back on track, compensate passengers for their time and added expenses, and continue to bring low fares to customers.
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