After three years of courtroom battles, Southwest Airlines finally got off the ground June 18, 1971 with a trio of Boeing 737s flying passengers between Dallas, Houston and San Antonio.
Co-founder Herb Kelleher was there to meet the inaugural flight at its destination. For the rest of his days, he relived the magical moment with anyone who would listen: “I walked up to it and I kissed that baby on the lips and I cried.”
Everyone who ever knew the rule-breaking maverick who passed away in January at age 87, has his favorite Kelleher story. For business writer Bill Taylor, it was the first time he heard him talk at one of those conferences where it is hard to stay awake.
“After a morning of tedious three-ring-binder presentations from executives and stuffy lectures by professors, it was time for the keynote speaker. Herb walked to the podium, lit a cigarette, poured a glass of Wild Turkey bourbon and delivered what remains the most hilarious, baudy (sic), utterly brilliant CEO speech I have ever heard,” Taylor said.
That was classic Kelleher, who liked to say, “Wild Turkey whiskey and Philip Morris cigarettes are essential to the maintenance of life!”
Herbert David Kelleher was a native of New Jersey but a 50-year resident of the Lone Star State. He was 12 when he lost his father, a manager at the local Campbell soup plant. Although he earned college degrees in English and the law, Kelleher felt his stint in that same plant was “the best education I ever had.”
He practiced law for a decade before relocating with his wife to San Antonio in the early 1960s. He never regretted that life-changing event, affirming time and again, “The greatest business decision I ever made was the move to Texas.”
The original concept of a budget air carrier serving the “Texas Triangle” (Dallas, Houston and San Antonio) was not Kelleher’s but a client’s named Rollin King. Over drinks in 1966 in an Alamo City lounge, the two men tossed around the innovative idea.
The need was as plain as day. Only business travelers and the rich could afford the price of a ticket. The average Texan either went by car, bus or train or simply did not go at all.
The incorporation papers for Air Southwest Company were filed in March 1967. As lead attorney, Kelleher argued the price controls and regulations imposed by the federal Civil Aeronautics Board did not apply to an airline that flew within the boundaries of a given state. Fearing fare cutting by the upstart, the “big boys” (American, Braniff and Continental) launched a full-scale legal offense that lasted more than three years.
To their boardroom horror, the Texas Supreme Court ultimately ruled in favor of Air Southwest. The decision was appealed to the U.S. Supreme Court, which declined to intervene and thereby upheld the company’s right to fly in Texas.
Meanwhile, Kelleher had built the new airline based upon a close study of Pacific Southwest. The West Coast carrier invited the imitation and went so far as to sell their flight and operations manuals to the brash Texan.
Borrowing PSA’s theme of “Long Legs and Short Nights,” Kelleher recruited dancers, cheerleaders and majorettes as stewardesses. Dressed in hot pants and go-go boots, the attractive young women were encouraged to be as outgoing as possible and even ham it up with corny jokes and wisecracks.
For customers with prior experience on traditional carriers, Southwest Airlines (the name adopted before takeoff in June 1971) took some getting used to. No food was served, only peanuts. Gone were first and business class and assigned seats too. And passengers dared not dawdle with Southwest’s 20-minute turnaround at the gate that resulted in what became known as the “cattle call.”
Braniff tried briefly to beat Southwest at its own game by cutting prices to the bone. Lamar Muse, who preceded Kelleher as CEO, retaliated with a clever publicity stunt – a free fifth of whiskey with every ticket. “For a couple of months,” he recalled in a 2016 interview, “we became the largest liquor distributor in the state of Texas.”
Southwest’s fun-loving corporate culture was a reflection of Kelleher’s irreverent personality and unique approach to running a business. He was a “people person” in an era when treating employees like dirt was considered a sound management practice.
“You want to show your people that you value them,” he said in a serious moment, “and you’re not going to hurt them in the short term just to get a little more money.”
But Southwest was a go-against-the-grain success posting a profit every year since the second. In an industry regularly awash in red ink and with costlier carriers dropping like flies in the 1980s and 1990s, the no-frills alternative grew by leaps and bounds aided by President Jimmy Carter’s deregulation of commercial aviation.
Kelleher served as executive chairman of Southwest from 1978 to 2008 as well as president and CEO from 1981 to 2001. With the title of “chairman emeritus,” he kept an office in the corporate headquarters right up until his death.
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