Today, Southwest Airlines is one of the big four operators in the United States. However, unlike its counterparts, it isn’t one of the legacy carriers that have been around for over nearly a century. The low-cost outfit has nonetheless managed to emerge as one of the top dogs within the aviation industry. Its ability to stand out from the very beginning has helped it rise high throughout the decades.
It all stems from an idea
Businessmen Herb Kelleher and Rollin King initially came up with the model of Southwest Airlines in a hotel bar in San Antonio in 1967. The initial plan was laid out in a triangle drawn on a cocktail napkin. The image symbolized the connection of the Texan cities of Dallas, Houston, and San Antonio.
During this era, the Civil Aeronautics Board (CAB) oversaw market regulations throughout the US. However, some of these controls did not apply if the carrier would solely be a Texan operator. Therefore, Southwest would be able to charge lower prices and undercut potential competitors.
It took several years for the firm to get off the ground. A key reason for this is that there was concern from some existing veterans. Braniff, Trans-Texas Airways, and Continental Airlines commenced legal action against the rise of the new player.
Regardless, Southwest triumphed in 1970 as the Texas Supreme Court upheld its right to fly within the state. This official decision then became final on December 7th, 1970.
Subsequently, the following year, the company saw the launch of operations as an intrastate airline. It was previously named Air Southwest but was now going by the moniker of Southwest Airlines.
Ready for action
The business placed its headquarters in Dallas and began passenger services on June 18th, 1971. It deployed three Boeing 737-200 aircraft on operations from Dallas Love Field to Houston Intercontinental Airport and San Antonio International Airport.
By the fall of 1972, Southwest was flying 61 flights a week each way between Dallas Love and Houston Hobby. Additionally, it was conducting 23 services a week each way between Dallas and San Antonio, along with 16 operations a week each way between San Antonio and Houston Hobby. Undoubtedly, the airline started to realize its initial vision.
The airline grew significantly across Texas, proving that its model could work. However, there was only so much growth to be had since there were limits to expanding out of the state. During this period, federal authorities tightly controlled the market. Above all, there was hardly any interstate competition, and the government decided where carriers could fly and what price they could charge.
A crucial shift
President Jimmy Carter introduced the Airline Deregulation Act in 1978. This policy saw the removal of federal government control over many critical aspects of US aviation. Therefore, there was a major shakeup within the industry. Ultimately some effects are still evident today.
Since CAB regulated domestic interstate routes, it was hard for emerging players to break down the barrier. In the preceding decade, 10 major groups dominated 90% of the market. Additionally, there were eight smaller, regional outfits handling the majority of the remaining operations.
However, the new law gave a new wave of freedom to airlines such as Southwest as it gave them considerable control of their business. Moreover, the new system encouraged competition and growth within the market. Startups notably now had the opportunity to challenge the status quo and expand their networks.
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It was previously a privilege to fly in an airplane. For several decades, only a wealthy few could afford to hit the skies. The jet engine may have helped lower ticket fees during the middle of the 20th century. However, there was still work to be done to enable more people across the population to hit the air.
So, with the rise of low-cost carriers such as Southwest, people now had the chance to sit on an aircraft for the first time. Nonetheless, the Love Field-based carrier still had to overcome further challenges following these early years, such as the impact of the Wright Amendment.
Simple Flying saw a statement by Southwest chief executive officer and chairman Gary Kelly. In the message, the businessman spoke about how the airline was able to influence change within the industry.
“I’d like to think that Southwest Airlines’ success within Texas helped to influence the Airline Deregulation Act, which went into effect in 1979. Forty years later, millions of people board airplanes every single day for all the reasons that are important in our lives—work, vacations, weddings, births, deaths, or simply to explore the world around us,” Kelly said in the statement.
“The one driving factor that makes this all possible is low fares. In fact, nearly 90 percent of the U.S. population has flown on a commercial aircraft. The reason is simple—low fares democratized the skies, and Southwest Airlines had a lot to do with that.”
Additionally, Kelly highlights how the carrier remains true to its roots. From the beginning, Southwest has continued to be a low-fare operator. Therefore, it has consistently grown throughout its history.
A significant rise
Today, the company is one of the largest operators in the US, serving up to over 160 million passengers per year. Altogether, those carriers that were concerned about Southwest’s rise in Texas had reason to be worried. The airline has broken ground over the years, while several of the previous strongholds were soon forced to cease operations or merge as a result of the changing industry.
What are your thoughts about the formation and early days of Southwest Airlines? What do you make of the carrier’s journey over the years? Let us know what you think of the operator’s story in the comment section.