The airline industry is mourning the loss of Herb Kelleher, Southwest Airlines co-founder who died Thursday (Jan. 3).
The larger-than-life bourbon-drinking Kelleher helped launch Southwest in 1971, creating the USA’s first big low-cost carrier and then shepherding it through the upheaval of airline deregulation and into the modern era.
Kelleher is universally regarded as a true visionary in American aviation, and his legacy in the industry that survives him is hard to overstate. Among the innovations that he’ll forever be associated with include:
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Happy employees (and customers)
Contentious labor relations have been a hallmark of the modern airline industry, but that wasn’t true at Southwest under Kelleher. He famously believed that happy employees would lead to happy customers.
“Your employees come first,” goes one oft-quoted Kelleher line. “And if you treat your employees right, guess what? Your customers come back, and that makes your shareholders happy. Start with employees and the rest follows from that.”
Indeed, Southwest’s friendly and folksy employees were often cited by passengers as fast-growing Southwest enjoyed strong customer-service ratings from the 1980s into the 2000s.
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Underscoring Kelleher’s strong ties with labor, the Southwest pilots union took out a full page ad in USA TODAY that read when he stepped down as the company’s chairman in 2008. The ad’s message: “Thank You Herb!”
Southwest debuted in an era where most big airlines were “full-service” carriers. But Southwest went a different direction under Kelleher.
Low fares became Southwest’s calling card.With this emphasis, Southwest eschewed first-class seating and maintained an egalitarian first-come, first-served seating policy that has persisted to today.
Critics have labeled that boarding process as a “cattle call,” but Southwest’s fares won it many converts over its first three decades.
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Southwest was known for aggressively pricing its cheapest seats, especially when it entered new markets. That forced incumbent carriers to match Southwest’s fares, sometimes running out established “legacy” rivals who couldn’t turn a profit by matching Southwest’s fares.
It was a new phenomenon for the U.S. airline industry as it shifted from a time of heavy regulation into the modern era that resulted from 1978’s Airline Deregulation Act.
When Southwest entered new markets, its presence was so pronounced that the U.S. Transportation Department coined the term the “Southwest Effect” in a 1993 report that looked at the effect expanding low-cost carriers were having on airfares.
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Southwest, aided forby advantageous fuel-hedging contracts, continued to bill itself as the USA’s low-fare leader into the current decade. But today it faces leaner competitors in American, Delta and United, all of which have pared costs in bankruptcy filings since 1978. Today, those carriers typically match or even undercut Southwest’s fares.
But Southwest’s low-fare approach has spawned a new wave of “ultra low-cost carriers” (ULCCs). The airlines, which include U.S. carriers Spirit, Frontier and Allegiant, are growing today using many of the tactics pioneered by Southwest.
Southwest’s open-seating concept never caught among at its U.S. competitors, but several of its other low-fare selling points have.
Southwest famously offered peanuts instead of full-service meals that were standard in decades past. Southwest’s insinuation was that customers booking its cheapest fares were essentially flying for peanuts – making the lack of meals worth the tradeoff.
When Southwest announced earlier this year that it would stop serving peanuts to help protect passengers who have severe peanut allergies, the move made national news since the carrier was nixing a snack that was been nearly synonymous with Southwest itself.
Even Southwest’s lack of first-class seating offered another no-frills template for modern low-cost carriers. A number of low-cost carriers have emulated Southwest’s coach-only approach, with European giant Ryanair among the most prominent.
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Kelleher’s Southwest capitalized on efficiency like few other airlines of its time.
For starters, Southwest used only one type of aircraft: the Boeing 737. By sticking to a single aircraft type, Southwest has reduced complexity on everything from maintenance and training to route planning. Southwest’s Boeing 737-only fleet plan has continued to today, though it briefly had Boeing 717s in its fleet following its 2010 acquisition of AirTran Airways.
Another Southwest hallmark was the “10-minute turn,” a reference to how long a plane would stay at a gate between flights. The quicker a plane could get back in the air, the more flights (and revenue) could be squeezed into Southwest’s schedule.
“Our planes pull into the jetways, board passengers and pull out again in 10 minutes or less,” Kelleher said in a 1982 commercial where he’s walking toward a Southwest flight only to have the cabin door close without him.
Of course, the 10-minute-turn was an ambitious goal even decades ago. Today, Southwest’s turn times have increased as it has grown and expanded into increasingly congested airports, but the airline still attempts some of the quickest turns in the industry.
Southwest bucked another industry trend by using a “point-to-point” route network for its flights. That’s instead of the more common “hub-and-spoke” method used by modern airlines where most passengers flying between mid-sized and small markets must fly to a big airline hub to connect to their final destination.
Instead, Southwest simply added flights between cities where it thought it could make money, often flying many flights throughout the day. That didn’t mean Southwest flyers didn’t connect, but it wasn’t over a hub.
By spreading its flight schedules over a national network Southwest was able to spread its costs and resources more evenly. As Southwest has grown, it does have some cities that essentially function as hubs. Still, Southwest refuses to call any of its busiest bases a hub – a holdover in thinking that persists from Kelleher’s days.
If your preferred airport is a so-called “secondary airport,” you can thank Kelleher’s Southwest for bringing them into the mainstream.
Those types of airports – think Chicago Midway instead of Chicago O’Hare or Oakland instead of San Francisco – were a staple of Southwest’s growth under Kelleher.
In fact, Southwest’s history is inextricably tied to the secondary airport in its hometown: Dallas Love Field. The airline initially began flying in 1971 with service between three cities within Texas (Dallas Love, Houston and San Antonio), its status as an intra-Texas airline shielding it from federal commercial airline restrictions that existed at the time.
In 1974, the new Dallas/Fort Worth International (DFW) airport opened. It was intended to be a single major hub serving the metro area, but Southwest resisted, figuring its business model based on short, frequent flights would be disrupted if Dallas customers had to make a longer drive to DFW. This turned into a decades-long battle to expand access at Love Field.
Beyond Love Field, however, secondary airports were key to Southwest’s growth strategy from its founding well into the 2000s. The less-congested airports typically did not suffer as many money-sucking delays as their bigger counterparts; some also offered lower operating costs.
Instead of Chicago O’Hare, Southwest picked Midway when it expanded to Chicago in 1985. When Southwest first expanded into the Northeast in the 1990s, it picked airports like Baltimore (instead of Washington Reagan or Dulles) and Providence, Rhode Island, and Manchester, New Hampshire (instead of Boston). Even in the New York City area, Southwest’s 1999 debut came at Long Island’s MacArthur Airport – a development that revitalized the then-sleepy airport located about 55 miles from Midtown Manhattan.
While Southwest pioneered that trend in the U.S. under Kelleher, the airline has moved away from that as it has become one of the world’s biggest. Southwest is still the dominant airline at Chicago Midway and Houston Hobby, but it is increasingly seeking out primary airports popular with business travelers. Today, Southwest flies from both San Francisco and Oakland. Its presence at Long Island/MacArthur has shrunk while it has expanded at New York LaGuardia and Newark Liberty. Similarly, Southwest’s addition of Boston in 2009 foretold eventual schedule reductions in nearby Providence and Manchester.
But Southwest’s secondary-airport strategy lives on in the U.S. budget carriers of today, as anyone who has flown Spirit from Niagara Falls, New York (instead of Buffalo), or Allegiant from Mesa, Arizona (instead of Phoenix), can attest.
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