The History Of Southwest Airlines

The history of Southwest reflects its CEO's tenacity. Kelleher had a law practice in San Antonio when a client suggested starting a discount airline to link three Texas cities. After five years of legal battles due to competitors' objections, Southwest finally got off the ground in 1971. To keep airfares low, the start-up avoided extras such as meal service and got planes in and out of the gate in twenty minutes or less. The airline now serves dozens of cities across the United States using the original formula of low prices, low costs, and high productivity to keep profits high. In fact, Southwest's operating margins are now three times higher than the industry average.

What is particularly impressive about Southwest Airlines is that the company has been consistently profitable every year since 1973. This is mostly due to its eager pursuit of low operating costs, low fares, and customer-pleasing service. Also, Southwest has consistently led the entire airline industry with the lowest ratio of complaints per passengers boarded. The company started out at the bottom and worked its way up through industry ranks to become a major competitive force in the domestic segment of the U.S. airline industry. The company was able to overcome industry downturns, dramatic increases in the prices of jet fuel, falloffs in airline traffic due to terrorist attacks and recessions, while other airline companies are in debt or have gone bankrupt. Also, not only were they able to overcome these threats, but they continued to add more and more flights to more and more airports overtime. The major reason for their continued success seems to be due to their low-cost model and strong emphasis on employee and customer satisfaction.

...

... middle of paper ...

...ly served by the existing carriers and that the cities Southwest proposed to enter could not support a new carrier. It took seven months for Southwest’s appeal to make it to the state court of civil appeals. In a two-to-one decision against Southwest, the intermediate appellate court upheld the trial court’s ruling. Kelleher then argued Southwest’s case before the Texas Supreme Court, which overturned the lower appellate court’s decision and Southwest would get its certificate to fly. But the fight wasn’t over. Braniff, Texas International and Continental appealed to the U.S. Supreme Court. In late 1970, the Court refused to hear the appeal, and Southwest had won a major victory, but over the next several years it would face repeated lawsuits—some again going all the way to the U.S. Supreme Court.

In 1971, Lamar Muse came to work for Southwest Airlines as CEO