SOUTHWEST AIRLINES (1): United States (1964-1967). Southwest is organized at San Antonio, Texas, in December 1964 to offer scheduled Beech 18 flights linking its base with Del Rio, Eagle Pass, and Kerrville. With Herbert R. Kelleher as a director and initially known as Wild Goose Flying Service, the commuter inaugurates daily roundtrips on January 7, 1965. Revenue services are maintained through 1966 and until the company shuts its doors in 1967.
SOUTHWEST AIRLINES (2): 2702 Love Field Drive, P. O. Box 36611, Dallas, Texas 75235, United States; Phone (214) 904-4000; Fax (214) 904-4011; Http://www. southwest. com; Code WN; Year Founded 1967. Unloved by many of its competitors, but admired by many students of business and airline affairs, this scrappy, low-fare, short-segment carrier founded by LeMar Muse, Rollin W. King, and Herbert D. “Herb” Kelleher, becomes an example of efficient operation— and profit-making—for all American industries, as well as the U. S. Congress. It will grow into one of the nation’s premier air transport concerns, imitated both at home and abroad.
Following the development of intrastate airlines (a category never recognized by the CAB) in California during the early 1960s, the next and most competitive launching site for units of this category is Texas. In 1966, as he will recall in 2001, San Antonio lawyer Kelleher meets with client Rollin W. King at a bar (the St. Anthony’s Club) to discuss the idea of setting up a low-fare intrastate airline modeled after Pacific Southwest Airlines (PSA). A triangle-shaped route plan is sketched on a cocktail napkin showing a system linking San Antonio, Dallas, and Houston. Later, on March 15, 1967, Air Southwest is officially formed in Dallas. Kelleher will fight long and hard in court for years to get various approvals required by his clients and will invest $10,000 in the en-terprise—a stake that will appreciate in value to $200 million). On November 27, he files papers with the Texas Aeronautical Commission (TAC) seeking authority to provide discount flights over the route network first revealed at the St. Anthony’s Club.
Although the application is unanimously approved on February 20, 1968, Braniff International Airways, Trans-Texas Airlines, and Continental Airlines begin a long legal battle aimed at prohibiting the TAC from delivering its certificate. On December 7, 1970, the United States Supreme Court rules against the complainants, and the new company is allowed to “get off the ground.”
Having meanwhile acquired financing, Air Southwest changes its name to Southwest Airlines (2) on March 29, 1971. On June 8, a total of 650,000 shares are offered to the public at $11 each. After one last legal skirmish on June 17, it inaugurates 12-times-per-day roundtrip Love Bird service to Houston. The next day, it launches 6-times-per-day roundtrip service to San Antonio with three Boeing 737-2H4As. Along with its hostesses’ uniforms of red hot pants and white cheerleader boots, Southwest’s fares are revolutionary, well illustrating the first marketing slogan: “How Do We Love You?”
On inauguration day, one-way tariffs are $20. Southwest’s decision to fly into Houston (HOU), instead of Houston (IAH) upsets others who have earlier agreed, under terms of the 1968 Regional Airport Concurrent Bond Ordinance, to service only the major fields then being built. The fourth Boeing is received on September 29 allowing every hour Dallas-Houston service to begin the next day.
On November 14, flights are started from Houston to San Antonio and a week later, the company introduces a $10 night fare between Houston and Dallas.
Enplanements for the partial year total 108,554; Southwest has well and truly fired the opening salvo in a conflict that becomes known as the “Great Texas Airline Fare War.”
A Boeing 737-2H4 is sold to Frontier Airlines (1) on May 13, 1972 at a net profit of $500,000. On June 6, the Regional Airport Board and the cities of Dallas and Fort Worth jointly sue Southwest to force it to move from Love Field to Dallas-Fort Worth International Airport, 20 miles outside of town and scheduled to open in 1974. The outcome could prove important to eight other airlines that have promised to underwrite any losses the new airport might suffer; they enjoy full support from civic and financial communities from Texas to the Potomac.
Executive Class service is introduced on July 19. The TAC intervenes in the Love Field case on September 14, the same day an antitrust grand jury is impaneled in San Antonio. On October 30, Southwest introduces night half-fare flights, $13 one way after 7:59 p. m. and all day Saturday and Sunday.
Having determined that many customers are driving 45 minutes for a 40-minute flight, all Houston service is transferred from Houston Intercontinental Airport to Hobby Airport.
A profit-sharing plan is started with an initial airline contribution of $175,000.
A total of 308,999 passengers are carried on the year. Start-up losses are cut by more than half since January, but still total a net downturn of $1.6 million for the year.
On January 22, 1973, half-fare tickets are issued on all San Antonio flights, $13 one way. For a time, Southwest’s competitors attempt to match its fares, but by the middle of the decade, even the staunchest have surrendered. On February 1, Braniff International Airways makes its most determined effort to overwhelm the newcomer by offering $13 oneway daytime flights between Dallas and Houston. This move offers Muse’s operation a shoot-out it can neither afford to fight—or lose.
The company accepts combat by placing its most famous ad in the newspapers of both cities: “Nobody’s Going to Shoot Southwest Airlines Out of the Sky for a Lousy $13!” Southwest goes on in the copy body to announce that it will not only match Braniff International Airways fares, but offer the passenger an alternative to it: he can, if he chooses, pay the regular $26 fare and receive “a choice of valuable gifts.” As many of the carrier’s passengers are commuting businessmen, the promotion turns out to be a stroke of genius as the “valuable gifts” are fifths of expensive liquor. Passengers can put the fares on their expense accounts and take the Chivas Regal scotch, Crown Royal Canadian whiskey, or Smirnoff vodka home—free.
Braniff International Airways’ tactic backfires and an appeal to the Texas Alcoholic Beverage Commission by several organizations identifying themselves as “Baptists” is dismissed. Only after the two-month contest ends do Southwest officials learn that their airline has become the largest distributor of Chivas, Crown Royal, and Smirnoff in the entire state of Texas.
A consolidated reservations center is opened at Dallas on March 21 and the Love Field case is settled in a federal court on April 28, when Judge William M. Taylor Jr., rules that Southwest Airlines can operate from Dallas (DAL) as long as it remains open as a commercial airport. The opposition is aghast and appeals the ruling all the way to the U. S. Supreme Court. The $13 fare becomes permanent between Dallas and San Antonio on May 1, the same day the carrier begins accepting Universal Air Travel Plan cards.
On July 9, the company applies to the TAC for authority to mount its low-fare assault into the Rio Grande Valley via the Harlingen airport. RUSH Cargo service, which provides same-day airport cargo delivery, is now introduced.
On December 1, fares are increased by $2 as company officials report that 82.1% of all flights operated arrive within 15 minutes of schedule.
A total of 543,407 travelers are transported on the year, a whopping 76% increase. The first profit in the company’s short history is reported: $174,756.
Unveiling a new advertising slogan, “Love Is Still Our Field,” the carrier moves to Gates 2 and 3 of American Airlines at Dallas (DAL) on January 13, 1974. Ten days later, the one millionth (cumulative) passenger is carried. Service to four cities continues amidst the hustle and bustle of two dozen lawsuits. TAC hearings begin in Austin on February 26 regarding the Rio Grande Valley route application. The antitrust grand jury is dismissed on March 4 with no action and another antitrust grand jury is impaneled on April 11.
On May 31, the Fifth Circuit of the U. S. Court of Appeals in New Orleans upholds Judge Taylor’s 1973 ruling. New hostess uniforms are introduced on September 24. Remodeled facilities, including two new boarding gates and departure lounges (built at a cost of $400,000), at Houston (HOU) are occupied on December 8. Two days later, Texas International Airlines files suit in Austin’s 200th District Court seeking to “relitigate” the Love Field case, but on December 16 the U. S. Supreme Court lets stand the Fifth Circuit Court decision of May 31.
With load factors of 61%, customer bookings for the year jump 61% to 759,721.
On January 27, 1975, the U. S. Supreme Court denies a petition for a rehearing of the Love Field Case. In five years, Southwest, in something of a record, has appeared twice (more or less as defendant) before the nation’s highest tribunal and has emerged victorious on both occasions. Still, the company has one more battle to fight and one more foe to vanquish.
Finally granted on February 6, the TAC certificate for Rio Grande Valley service allows the carrier to commence four weekday roundtrip flights via Harlingen Airport on February 11. Eight days later, the new competition is appealed by Texas International Airlines, the local service carrier formerly known as Trans-Texas Airlines, which is now grounded by labor action.
The litigation drags on; meanwhile, Southwest flies the Valley, forcing its competitor into significant further difficulty that is not softened by a U. S. government indictment against TI and Braniff International Airways under the Sherman Antitrust Act for conspiring to put Southwest out of business.
On June 15, Judge Taylor issues a preliminary injunction prohibiting carriers governed by the CAB from “relitigating” the Love Field case. The fifth B-737-2H4A joins the fleet on July 2 and common stock is listed on the American Stock Exchange as of October 24 under the ticker symbol “LUV.”
Enplanements for the year are 1,136,318.
An application is filed with the TAC on March 24, 1976, seeking authority to service five additional cities. On June 15, a $32-million order is placed for four more Boeing short-haulers. The fifth anniversary is celebrated with parties on June 18.
The first shareholder dividend is declared by the board of directors on August 10: $6.25 per share of common stock. The sixth B-737-2H4A enters service on September 13. From the original 2 million shares authorized, a public issue of 461,242 shares of common stock is sold on September 30.
On October 28, Southwest Airlines, whose employees number 198 — the same number as the defenders of the Alamo—and which enjoys great public sympathy as an underdog, learns that the 20th District Court has sustained the TAC authority for it to service the Valley. On December 1, authority is granted to serve Austin, Corpus Christi, El Paso, Lubbock, and Midland/Odessa; the TAC permit is appealed by Braniff International Airways on December 14, but turned down.
The year’s passenger boardings are 1,539,113. Revenues total $30,966,000 and a net income of $4,939,000 is earned.
Four-times-per-business-day flights are started to Corpus Christi from Dallas, Houston, and San Antonio on March 1, 1977. The five millionth passenger is flown between Houston and Dallas on May 3. Lubbock and Midland/Odessa service is inaugurated on May 20 with El Paso joining the route network on June 20. The company now covers the state (except for Amarillo and three other communities) and a new slogan is born: “We’re Spreading Love.”
Common stock begins training on the New York Stock Exchange on June 27, still with the “LUV” ticket symbol. Frequencies are initiated to Austin on September 15.
Passenger boardings for the year jump 52% to 2,339,524. Revenues accelerate 59% to $49,113,000 and the net income rises 53% to $7,545,000.
Airline employment stands at 1,119 in 1978. With the delivery of two new Boeing 737-2H4s, service is started from Austin to Houston and the Rio Grande Valley on February 13. Lamar Muse resigns as chairman/president/CEO on March 28; Herbert D. “Herb” Kelleher is named to the post on an interim basis.
According to a 2001 recollection by the company chairman, Lamar Muse and Rollin King, who have been unable to work harmoniously together for some time, engage in a showdown with their board at the end of March. At this time counsel Kelleher, who has been a go-between, informs the board that he is resigning the Southwest account and is going to Houston to take on a case for his own firm. On March 26, Chairman/
President/CEO Muse informs the board that, unless King is terminated, he is resigning. At an emergency board meeting on March 28, the Muse resignation is accepted. Kelleher, who had flown back to Dallas for the meeting at board request, is named chairman on an interim basis after gaining approval for the appointment of an experienced airline man as president/CEO. Two days later, a new maintenance center is occupied at Dallas (DAL).
Route authority is sought from the CAB on May 23 for nonstop service from Dallas to New Orleans. Former United Airlines Vice President Howard D. Putnam is elected president/CEO on July 25 (effective August 21), with Interim Chairman Kelleher being awarded that post on a permanent basis. At this point, the new leader’s legal secretary from his San Antonio law firm, Colleen Barrett, joins SWA. Twenty years later, as executive vice president-customer services, she will be the highest-ranking woman employed by a major U. S. airline. She will add to that distinction when, on June 19, 2001, she becomes Southwest’s presi-dent/chief operating officer.
TAC route authority is received on October 19 for service to Amarillo and Beaumont, Port Arthur, and Orange. Two more B-737-2H4As arrive in late October.
Fighting its many battles against heavy odds and with recurrent success, Southwest Airlines develops a following as far away as the hearing rooms of the U. S. Senate. In the seemingly interminable series of inquiries conducted by that legislative body concerning the air transport industry in 1975-1978, Southwest is repeatedly used as an example of the blessings to be realized from airline deregulation.
Deregulation’s champions argue that here is a company that is: (1) not regulated by the federal government, yet (2) increases its passenger loads by 50% per year, and (3) makes a higher return on equity than any domestic carrier in airline history, while (4) charging fares substantially lower than those of the CAB-regulated carriers. The Congress looks at these facts, debates, and passes the Airline Deregulation Act, which will prove a boon to many airlines, including Southwest, and the death knell for others. President Jimmy Carter signs this Public Law 95-504 on October 24.
With the exchange of its oldest B-737 for a new one on December 8, the intrastate completes its fleet upgrade to a total of 14 B-737-2H4As, plus 1 leased from Braniff International Airways. Orders remain outstanding for five more Dash-200s. Under the dormant route provision of the new Airline Deregulation Act, the CAB grants Southwest its New Orleans permit on December 11. The company adds Amarillo to its growing network on December 12. Passenger boardings rise 51% on the year to 3.528,105. Operating income climbs 65.3% to $81 million and net gain skyrockets 121% to $17 million. It is now time to move outside of Texas.
The workforce is increased by 45.7% in 1979 to 1,630. Daily Dallas and Houston to New Orleans service is launched on January 25. The 14th Boeing arrives on February 8 and on February 12 frequencies on the New Orleans route become 7 per day on weekdays, 6 on weekends. Service is started from Jefferson County Airport serving Beaumont, Port Arthur, and Orange to Dallas on March 5. The 15th B-737-2H4A is delivered on April 25 and placed into service on May 1.
On May 25, the best day to date is recorded: 17,928 passenger boardings. Cubic-Western Data self-ticketing machines are introduced at 10 airports. The 16th B-737-2H4A is delivered on October 23 and begins service the next day. Frequencies are increased on most routes as of November 7.
The company records a traffic increase of 49.8% or 5,000,086 million enplanements; 704,000 FTKs are also operated. Revenues jump 58.6% to $129 million, but acquisition costs force the net profit to dip to $15.83 million.
The employee population is reduced by 26% in 1980 to 3,283. When the CAB refigures its airline classification scheme, Southwest is rated as a “national” carrier. Local members of the lAM strike Southwest on January 13, but pilots and flight attendants cross their picket line, enabling the carrier to continue its flights; the job action ends five days later with a mediated agreement and normal operations are resumed on February 1.
Among the year’s promotions are Ticknet, a prepurchase travel agency net discount and sponsorship of Capt. Slim Cummings’ “Fear of Flying” course. New routes are started each day April 1-3 to, respectively, Oklahoma City, Tulsa, and Albuquerque. On June 18, Southwest celebrates its ninth birthday by deferring fare increases scheduled for July.
Orders are placed for three more B-737-2H4As on June 24. Service is terminated at Beaumont, Port Arthur, and Orange as of September 5; however, overall frequencies are again increased on October 2. Three high school students, none of whom are pilots, steal a twin-engine light-plane at Dallas on November 15 and fly it over Love Field for nearly an hour, barely avoiding a midair collision with a Southwest B-737-2H4A; the three are arrested when they land. Three more B-737-2H4As are received during the year, including the last on December 3, which is named after company founder Rollin W. King. It is the first aircraft to be completely owned by SWA.
During the year, the leadership of the company’s flight attendants petition Chairman Kelleher to end the requirement that they wear hot pants and go-go boots. Conversely, customer service agents ask that the sexy uniforms be retained. A compromise is worked out: a wraparound skirt is designed and flight attendants are given permission to tie it over their hot pants if desired.
Passenger boardings, meanwhile, accelerate 19.5% to 5.976,621. Despite a yearlong freeze on fare increases, revenues increase by 56.5% to $213 million. A $28.4 million-net profit is experienced—a 70.8% jump over 1979 and a company record.
The number of employees is increased by 15.8% in 1981 to 2,129 and the 21st owned B-737-2H4Ais received on January 23. A common stock offering of 750,000 shares at $53 per share is announced on April 15 and easily returns $38 million to Southwest’s coffers. The summer schedule is increased by 18% on May 15 and the tenth anniversary is celebrated on June 18.
Five days later, orders are placed for 10 B-737-3H4s plus 30 options. The second decade of service is officially launched on August 25 with a new advertising theme: “Loving You Is What We Do.” The company sees its President Howard Putnam transfer on September 22 to the same post at forgiven-rival Braniff International Airways; he is replaced by Board Chairman “Herb” Kelleher.
During the year, a 13.7% traffic increase is logged (6,792,927 passengers carried) and the Dallas-based carrier becomes the top-ranking U. S. national in terms of boarding totals. Cargo also gains, climbing 22.9% to 1.31 million FTKs. Revenues accelerate 26.9% to $270.3 million and after expenses of $221.9 are deducted, the operating profit is pegged at $48.5 million. The $34.16-million net gain is a company record.
The payroll increases 36.8% in 1982 to 2,913 and this is an important growth year for Southwest Airlines as its 737s fly into many new non-Texas markets. Service from Kansas City to 7 cities is inaugurated on January 18 and on January 21, flights begin to 11 cities from Las Vegas, to 12 cities from Phoenix, and to 11 cities from San Diego. Mr. Kelleher becomes permanent chairman, president, and CEO on February 23.
In celebration of its 11 years of service, the last flight on Friday nights, as of June 24 until December 31, in the Dallas, Houston, Mid-land/Odessa, and Tulsa markets will be $11. A “Love That Spirit” advertising campaign is launched on July 6 and orders are placed for three more B-737-2H4As on July 27. Service from Los Angeles to 10 cities is begun on September 18 while flights to and from San Francisco commence on October 31. Largely unnoticed during the year is the appointment of Cathy Jones to the right seat of a B-737-2H4; she is the company’s first female pilot.
Boardings surge by 18.1% to 9,079,000, allowing the company to retain its first place ranking in that category. To handle the load increase, 12 more B-737-2H4As have been placed on the line, a 35% increase in capacity. Cargo also grows, up 14.8% to 1.5 million FTKs. On the financial side, operating income rises 22.5% to $331.18 million and expenses are $291.96 million. The operating profit is $39.22 million and a record $34-million net profit is chalked up.
The workforce jumps upward again in 1983, by 18.9% to 3,462. In January, the company receives the 1982 “Financial Management Award” from Air Transport World magazine.
On February 23, just 12 days after American Airlines introduces the concept of the two-tier wage, Southwest signs the industry’s first two-tier contract. The first general fare increase in two years is instituted during the first quarter. Orders are placed for three additional B-737-2H4As on May 9.
Denver joins the route system on May 26. The 28th consecutive quarterly dividend is declared by the board on August 27.
Ten more B-737-2H4As join the fleet, passenger boardings for the year accelerate 19.4% to 9.51 million, and freight swells 16.8% to 1.75 million FTKs. Revenues balloon 35.3% to a record $448 million and costs rise 30.04% to $379.68 million. The operating gain is $68.55 million and an after-expense net profit of $40.9 million is realized— another record.
Employment grows another 13.6% in 1984 to 3,934 as the Texas company hits additional high spots. In what will prove a successful effort to keep financially troubled Muse Air out of the market, flights begin to Little Rock on February 27 after only five days preparation. Orders are placed on July 12 for 21 additional B-737-3H4s. With the new advertising campaign “You Choose Who Sits Next to You,” open seating is now offered.
The first of Southwest’s B-737-3H4s is received on November 30; following an elaborate banquet on December 16, the aircraft is christened The Spirit of Kittyhawk the next day and is placed into service. It is followed by two more on December 20.
A healthy traffic rise of 12.5% translates into passage of the 10 million mark in annual passenger boardings (10,697,544) for the first time. Cargo, still almost an afterthought, also climbs, up by 26.4% to 2.22 million FTKs.
The carrier records a 19.6% jump in revenues to $535.94 million and costs are contained at $467.45 million. The operating profit declines $1,000. Yet another record net profit, $49.7 million, is reported to stockholders and the government.
As 1985 opens, Southwest’s expansion moves forward again, beginning with a 1.6% boost in the workforce to 4,228. On March 11, it is announced that the company will acquire financially troubled Muse Airlines for $72 million. Five days later, the 22 city, primarily southwestern route system, is greatly strengthened by entrance into the big markets of St. Louis and Chicago (MDW), to which an introductory fare of $17 is offered for 17 days. A “Just Say When” advertising campaign is unveiled on March 25 and on April 1, flights begin from St. Louis to New Orleans, Houston, and Kansas City.
On May 15, service is opened to Ontario, California, with a $9 for nine days promotion. The Muse Airlines acquisition is consummated on June 25; Southwest pays $40 million in cash and $20 million in stock for its rival. The takeover is the first approved by the U. S. DOT following the demise of the CAB. Nonstop Albuquerque to Los Angeles flights begin on July 14 and to attract additional business travelers, a new campaign entitled “The Company Plane” is started.
At Houston on December 10, a Boeing 737-3H4 is christened The Texas Sesquicentennial. Houston to Jackson Hole, Wyoming, ski season flights begin on December 21. Southwest names the Ronald McDonald House as its primary charity. Due to fare wars, the fourth quarter is a fiscal disappointment.
Still, enplanements for the year increase 8.4% to 11,595,602 and revenues ascend 13.1% to $606.07 million. Costs rise 14.6% to $535.87 million and the operating profit grows to $70.2 million. Net gain, however, drops 4.9% to $47.2 million.
Airline employment rises 24.7% in 1986 to 5,271. A cone bolt and restraining cable supporting a rear engine mount shears off due to metal fatigue, causing a B-737-2H4A to land at Dallas on January 3 with one engine dangling; no injuries are reported.
A number of new fares are marketed in January and in February the Muse Airlines subsidiary is renamed TranStar. When, during the same month, PEOPLExpress is integrated into Continental Airlines, Southwest is left as the largest U. S. national carrier. The 38th consecutive quarterly dividend is announced on March 3 and service is inaugurated to Nashville on March 18.
Flight attendants now sign a new five-year, two-tier wage pact. On April 14, a $25 Senior Citizens Saturday-only fare is announced and $19 one-way “Fun Fare” tickets are introduced in all markets on May 29. On June 13, same - or next-day door-to-door Rush Plus air express service is introduced, followed by the “One More Important Meeting—Home” advertising campaign aimed at business travelers.
A multimillion dollar Training Center is occupied on August 28 and in early fall, a five-year contract for the use of the American Airlines SABRE reservations system is begun. Unwilling to spend the funds required to become a major player in Denver, the company now departs that city. Meanwhile, the City of Dallas agrees to purchase all of the carrier’s Love Field facilities at fair market value if operating restrictions are ever placed on that field; consequently, Southwest makes a longterm commitment to remain there.
Incidentally, when that airport closes its vehicle parking lots in order to replace them with parking garages, the airline turns around and builds the world’s first drive through ticket counter outside the grounds.
Passenger boardings grow 1.6% to 12,995,000, but with TranStar figures included, climb to 13.6 million. Revenues increase 13.1% to $679.8 million while the net profit jumps 5.8% to $50 million.
The workforce is increased by 25.1% in 1987 to 5,765. In early March, Southwest takes delivery of 3 more B-737-3H4s, increasing the fleet to 20, in addition to the 46 owned B-737-2H4As. Difficulties are encountered during the first quarter in getting the new SABRE-based reservations system on line.
Service to Birmingham, Alabama, is inaugurated on March 10; also in March, the company’s third reservation center (after San Antonio and Dallas) is opened in Phoenix. A new crew base domicile is opened at Phoenix on April 1 and Fun Fare prices are reduced on April 21. Later in the month, Southwest constructs a new pilot and flight attendant training center at Dallas (DAL) that houses the first convertible B-737-200/300 simulator in the industry. Additionally, work is begun on the building of a new $7.5-million headquarters building.
The company expands into full-service air cargo on May 11, adding a Rush air freight product, and on May 21, orders are placed for 20 B-737-500s. Also in May, nonstop service is increased from San Francisco to San Diego and initiated to New Orleans, Houston (HOU), and Nashville. Detroit joins the route network on June 4; later in the month, daily nonstop flights begin from the “Motor City” to Phoenix, Chicago (MDW), St. Louis, and Kansas City.
The Company Club is introduced on June 18 as a frequent-flyer program for the short-haul business traveler, while a full-scale Rapid Rewards loyalty program is offered to other travelers. The TranStar subsidiary, formerly Muse Airlines, ceases operations on August 9 and is liquidated.
Half a million shares of common stock are repurchased on October 27. Also in October, the carrier ends its long stand as an industry outsider by becoming the 21st full member of ATA.
Also in October, the FAA launches an intensive program of airport screening. Over the next 18 months, FAA agents will be able to slip 734 test weapons or explosives through airline-run screening points and will, in turn, impose $5.21 million in fines against some 50 airlines that fail the unannounced tests.
Customer bookings advance 8.6% to 12,313,000 and cargo climbs 14.5% to 1.79 million FTKs. Revenues accelerate 12.5% to $698,663,000 and expenses increase by 22.1% to $657.48 million, leaving an operating profit of $23.77 million and net gain of $20.15 million.
There is initially no change, plus or minus, in the size of the workforce in 1988, although Elizabeth Pedrick Sartain, a future vice president, is first hired as director of compensation and benefits. Smoking is prohibited on California intrastate flights as of January 11 and on February 8 the number of trips required to win a free flight from The Company Club frequent flyer program is reduced. Construction of a new $5.7-million maintenance facility is started on March 9 at Houston (HOU). Two nonstops are added from Dallas to New Orleans on April 3, along with one from Phoenix; additionally, a daily nonstop is laid on in each of seven other markets served from Phoenix. Fares to several markets are lowered on April 12 and on April 22, the carrier, in compliance with federal law, bans smoking on all its flights, but hands out free lollipops to all passengers to help them become accustomed to the new rules.
The 47th consecutive quarterly dividend is announced on May 18 and also in May, services are expanded in the New Orleans and Phoenix markets. During the month, the company becomes the first to win the coveted Triple Crown award for a month—Best On-time Record, Best Baggage Handling, and Fewest Customer Complaints. In the years that follow (through 1997), SWA will win it 31 more times, as well as five annual Triple Crowns in 1992, 1993, 1994, 1995, and 1996.
On May 23, as part of its joint program with Sea World of Texas, which opens on May 28, to promote Texas tourism, Chairman Kelleher christens a B-737-3H4, painted like a killer whale, Shamu One. In six days, the aircraft visits every Southwest market, ending up in California where the carrier becomes the official airline of that state’s Sea World attraction. On May 2, 1994, People Weekly will reveal that Shamu One is the basis for yet another impish tale in the Kelleher legend.
Seeing the killer whale livery, so the story goes, Chairman Robert L. Crandall of American Airlines calls up Kelleher to kid him about the aircraft. “It looks all right,” he concludes, “but what are you going to do with all the whale s—t?” A few days later, Crandall receives a large bucket of chocolate mousse with a Shamu-shaped spoon sticking in it.
In June, the company adds daily nonstop frequencies from Phoenix to Detroit (DET)—the first commercial service there in 40 years— and Dallas, together with four-times-per-day flights from Phoenix to Albuquerque and Austin. Also, in a television commercial aired about this time, Chairman Kelleher offers any passengers too embarrassed to fly a discount carrier a paper bag to put over his or her head.
Frequencies are also launched from Detroit (DET) to Chicago (Midway), Kansas City, and Houston and as of July 6, the airline offers 900 flights systemwide, visiting 27 cities in 13 states. Simultaneously, service is relaunched from downtown Detroit (DET). Fares are also reduced in major markets during the day. Ground is broken on November 15 for a new corporate headquarters at Dallas (DAL). During the year, 13 B-737-3H4s arrive from and 3 B-727-2H4As are returned to their lessors.
Customer bookings jump 10.2% to 14,876,582 and cargo reaches upward 11.9% to 3.13 million FTKs. Revenues increase 23% to $860.4 million, operating expenses rise 18% to $774.5 million, and a net profit of $58 million is announced.
Airline employment is increased by 35.3% in 1989 to 7,800. On January 30, a new reservations center is opened at Grand Prairie, Texas. New $29 one-way Night Flight fares are introduced on February 8 between the Texas markets and four new B-737-3H4s join the fleet in March. The additional capacity allows the point-to-point pioneer to undertake another major service expansion, beginning on April 3 with six daily roundtrips from Indianapolis to Detroit (DET), four from the Indiana capital to Houston (HOU), and five to St. Louis.
During the month, many other frequencies are added. From Houston (HOU) these include a second daily nonstop roundtrip to Albuquerque, two additional flights to New Orleans flights, and two nonstops to St. Louis. Three daily nonstops from Chicago (Midway) to Detroit Metro Airport (for a total of 11) are added. From Albuquerque, a sixth daily nonstop to Los Angeles and a third daily nonstop to San Francisco are added, as well as a second daily nonstop from Phoenix to Detroit (DTT) and a fifth daily nonstop to San Francisco.
Flights begin from Oakland, California on May 15 and, as of May 23, Shamu One has flown 1.1 million miles between Southwest’s destination cities. Night Flight service is introduced systemwide on June 1.
On June 1, the FAA assesses fines against those carriers failing its latest round of airport screening tests. SWA, with nine security breaches, is faced with $45,000 in punishment.
Ordered earlier, the first B-737-500 makes its maiden flight on June 30. The 53rd consecutive quarterly dividend is declared on November 15. A cooperative holiday promotion is kicked off with Kentucky Fried Chicken on November 27 and at the end of December, fare reductions are announced in select markets.
Profits drop sharply during the fourth quarter due primarily to a 37% increase in fuel costs. Passenger boardings accelerate another 20.7% to 17,958,263 and freight is up 29.9% to 4.06 million FTKs, least among U. S. majors. Revenues bounce upward 18% to $1.015 billion. Operating profits swell 13.5% to $97,626,000 while net profit jumps 23.5% to $71,558,000.
The payroll grows again in 1990 by 10.5%, to 8,620 and the fleet now includes 46 B-737-2H4As, 48 B-737-3H4s, and TranStar’s 5 Douglas DC-9-51s. The fleet figure is 19th largest among world airlines.
Additional select market fare reductions are instituted on January 4 while Chairman Kelleher, at a January 31 press conference, announces Southwest’s achievement of major carrier status based on its billion dollar 1989 earnings.
Quietly, an emergency cost control program is put into place, focused almost entirely on stringent fuel-conservation measures. The first B-737-5H4, for which the company is launch customer, is delivered on February 28 and enters service on March 5. Colleen Barrett is now appointed executive vice president-customers and corporate secretary, the third executive vice president appointed since 1985 and the first woman.
On April 16, service is inaugurated from Burbank to Oakland and from Oakland to Las Vegas; promotional fares herald the new frequencies. The new $15-million corporate offices are occupied on April 25, replacing the ramshackle facilities across the field in the Love Field terminal that have been employed since the company’s start.
On May 31, a B-737-5H4, the company’s 100th delivered airliner, is christened Shamu II; painted to resemble a killer whale, it joins Shamu I in promotional flights. On August 2, Iraq invades Kuwait, sending fuel prices higher and on August 30, a broad, sports-theme promotional program is announced, tied to an umbrella sponsorship of the member universities of the Southwest Conference.
Special Senior Fares, starting as low as $20, are offered as of November 1 in conjunction with the twentieth anniversary. Painted to commemorate the company’s twentieth birthday and resembling a red, white and blue Texas flag, the B-737-3H4 Lone Star I enters service on November 12. Service to and from Reno begins on November 15, the same day the board of directors declares a 57th consecutive quarterly dividend. On December 31, Southwest is the only major carrier to see its stock price close higher on the final day of trading than on the final day of 1989 trading.
Customers accommodated rises 10.4% to 19,830,941, making Southwest the world’s 14th largest carrier. Cargo skyrockets 246% to 14.07 million FTKs. Revenues increase 16.9% to $1.187 billion, but operating expenses climb 20.4% to $1.104 billion, leaving a net profit of $47.1 million, atop an $82 million operating profit, 9th highest among all world airlines.
Airline employment is increased by 13.4% in 1991 to 9,778 and the fleet now includes 124 aircraft, mostly B-737s but still including 5 former TranStar DC-9-51s. A new promotional package is announced in cooperation with Chili’s restaurant chain on January 14.
On February 11, following the landing of Flight 335 at San Diego, FBI agents arrest C. L. Compton. During the B-737 service from Oakland to San Diego, Compton had argued with the crew for not allowing him to smoke and then gave them a note saying he was carrying explosives and demanding $13 million and a flight to Cuba. Compton will be tried and convicted in early 1992 and given a 30-year prison sentence.
In less than a year, the Burbank-Oakland route soars from 179th largest U. S. market to 25th largest.
Oakland to Los Angeles and San Diego flights begin on April 15 and on May 6, a Kids Fly Free summer promotion is announced. As the first step in a major expansion of California operations, six-times-per-day service is inaugurated to Sacramento from Burbank on June 17; the next day, simultaneous 20th birthday parties are hosted in each of the 32 cities served.
Six-times-per-day B-737-3H4 Sacramento to San Diego roundtrip service begins on July 25, followed by the introduction of nonstop St. Louis to Kansas City flights on August 15. In honor of its twentieth birthday, the carrier offers its customers, beginning on September 18, free admission to the Texas State Fair.
A B-737-2H4A comes within 50 ft. of colliding with a small plane while preparing for a landing at Chicago (MDW) on September 27, while on October 4, another small Boeing comes within 1,000 feet of impacting a Midway Airlines DC-9-31 over the same airport. On November 1, Las Vegas to Los Angeles and Phoenix frequencies commence. A job fair is held on November 15 for the employees of failed Midway Airlines (1); 3,000 interviews are conducted to fill 34 initial jobs along with future positions.
Customer bookings jump 14.3% to 22,669,942 and cargo moves upward 34.4% to 18.93 million FTKs. Revenues increase by 10.69% to $1.31 billion, expenses rise 13.25% to $1.25 billion, and the operating profit is $62.04 million. This year’s net profit totals $26.91 million.
Company employment grows 16.6% in 1992 to 11,307. At the beginning of the year, the company receives the 1991 “Airline of the Year” award from Air Transport World magazine. Also Edward O. Welles profiles Chairman Kelleher as “Captain Marvel,” for Inc XIV (January 1992): 44-47.
On January 8, service is initiated between Chicago (MDW) and Indianapolis while flights commence between Cleveland and Chicago (MDW) and St. Louis on February 13. On March 2, nonstop frequencies are introduced between Las Vegas and Sacramento or Kansas City.
It is announced on March 6 that, where no other airline has reached the goal even once, Southwest has swept the DOT’s performance categories for the sixth consecutive time. In 1991, it has the best on-time performance, the fewest number of lost baggage complaints, and the lowest number of overall customer complaints.
When it is discovered by aircraft service company Stevens Aviation that its advertising and that of Southwest is nearly identical, Stevens Chairman Kurt Herwald challenges “Herb” Kelleher to an arm wrestling contest with ad removal the forfeit. A jocular war of words ensues between the two companies. The best two-out-of-three contest is duly held at the Dallas Sportatorium on March 20 and despite Kelleher’s loss, the two contestants, who have become good friends over the matter, agree to continue using and sharing their ads.
During the second week of April, Chairman Kelleher is named the fifth “Aerospace Laureate” in the field of commercial air transport by Aviation Week and Space Technology. Also during the spring, the 5 remaining TranStar DC-9-51s are traded to Northwest Airlines for the 18 Chicago gates the latter had purchased from Midway Airlines the year before.
On June 4, nonstop flights begin between Indianapolis and New Orleans and from Port Columbus, Ohio, to Chicago (MDW) and St. Louis. The number of Chicago (Midway) gates is now 24 and departures total 61, later increased to 100; however, Phoenix is now the largest hub in terms of departures.
A variety of promotional fares are introduced or reintroduced during the summer season. Frequencies are increased to the carrier’s Missouri, Nevada, New Mexico, Arizona, Illinois, and California markets on July 13. Acknowledging the recession, an advertisement is run stating that “All Airlines Operate Within a Budget.” To combat the Value Added pricing of rival American Airlines, Southwest notes “We’d Like to Match Their New Fares,” suggesting that its traditional rates are just as low. At the same time, the famous “Liar, Liar!” ads are run demonstrating that it, in fact, has the fewest number of customer complaints per 100,000 passengers.
The company’s largest maintenance facility, a $10-million project at Phoenix Sky Harbor International Airport, is opened on October 8. Later in the fall, a sixth reservation center, at Albuquerque, is occupied. To celebrate its capture of the Triple Crown as first in customer satisfaction, baggage handling, and on-time performance, a one-of-a-kind trophy is commissioned.
Passenger boardings zoom up by 22.8% to 27,839,284 and cargo moves ahead by 42.6% to 26.99 million FTKs. Revenues jump 28.3% to $1.68 billion, expenses ascend 20.1% to $1.5 billion, and operating income triples to $182.63 million. Net profit nearly quadruples to $91.02 million. Southwest is the only U. S. airline to make money during the year.
The payroll is increased by 16.1% in 1993 to 13,232 and the 157 all-B-737 fleet is the world’s 12th largest. In January, Southwest receives a “20 Years of Excellence Award in Short-Haul Services” award from Air Transport World magazine.
Flights begin from Chicago to Louisville in May and daily service is started in June from San Jose with 11 daily nonstop roundtrips, six to Burbank and five to Las Vegas. Within a month, traffic between Chicago and Louisville triples.
Simultaneously, a Friends Fly Free promotion is unveiled while Chairman Kelleher serves as a member of the President’s Airline Commission for three months during the summer. Executive Vice Presi-dent/Chief Operating Officer Gary Barron adds only the fifth station director since 1989.
Eighteen flights are added from San Jose on August 13 to bring the total number of daily departures from that California city to 29; added nonstop flights include service to Los Angeles (LAX), Ontario, Reno, and Burbank.
A full-scale fare war breaks out with USAir on August 17 as additional pressure is placed on the rival when, in a move long expected, the low-fare leader begins flying into Baltimore (BWI). Both slash fares to rock bottom prices to compete on routes from the new East Coast market to Chicago (MDW) via Cleveland.
The company consolidates all of its Detroit flight operations at Detroit Metropolitan Airport on September 15, including those previously offered from downtown Detroit (DET). On the same day, five-times-per-day flights are offered from Baltimore (BWI) to Cleveland and Chicago (MDW). At the same time, 10 new daily departures are offered from the Michigan city, including six-times-per-day roundtrips to St. Louis, from whence connecting flights are offered to other destinations. Simultaneously, the six daily roundtrips to Chicago (MDW) introduced in August are increased to 10.
The carrier becomes launch customer for the B-737-700 on November 17, announcing that it will request 65 of the yet-to-be-flown short-haulers; options are taken on 63 more. Salt Lake City-based Morris Air is acquired through an exchange of stock on December 31; integration will take place in stages through March 1995. Morris Air cofounder David Neeleman, 33, who has reportedly earned $20 million on the deal, signs on with Southwest; he will depart within five months, having found his new employer too regimented. Before his departure, Chairman Kelleher requires that he sign a five-year noncompetitive agreement. Neeleman will later help found two more deep-discount operators, Westjet Airlines, Ltd. in Canada and history’s best-financed new entrant, JetBlue Airlines.
Meanwhile, during the year, a DOT study reports that the industry’s changing configurations are caused by “The Southwest Effect.” During the same 12 months, Chairman Kelleher, reinforces the “effect” when he appears in episodes of the television comedy series Wings and Seinfeld. He is also interviewed on the U. S. and French versions of 60 Minutes, David Brinkley’s ABC-TV Sunday morning interview program This Week with David Brinkley, and stars in an American Express commercial.
“Herb the Love Bug: An Interview” appears in Incentive CLXVII (November 1993): 52+ and the chairman regularly appears in company television ads just as onetime Eastern Air Lines Chairman Frank Borman had a decade earlier.
Customer bookings ascend 20.4% to 33,508,686, the world’s 8th highest boarding total. Cargo rises 23.1% to 33.21 million FTKs. Profitability continues as revenues jump 22.7% to $2.06 billion, the world’s 24th best overall income. Expenses rise 18.8% to $1.78 billion and the operating profit moves ahead to $291.97 million, 8th best in the world. Net profit almost doubles, hitting $169.54 million, and is the world’s 5th best such figure. The company is one of only two U. S. passenger air carriers to make money during the year.
Airline employment is boosted 10.8% in 1994 to 16,816; no employee has been laid off since the airline’s 1971 founding. The company completes a $2.5-billion contract with Boeing on January 19 for the delivery of the B-737-7H4s, beginning in October 1997. In April, the union of Southwest and Morris Air is celebrated with a mock marriage in the Graceland Wedding Chapel at Las Vegas by a man wearing a stuffed Southwest Spirit model and a lady wearing a similar Morris Air mascot. The event is presided over by an Elvis impersonator, a role, incidentally, played on occasion by Mr. Kelleher. Five Morris Air B-737-3T5s and a B-737-3T0 are now taken over by the new parent, while the subsidiary’s remaining 16 chartered units are returned to their lessor.
On March 2, four-times-per-day nonstop roundtrips commence between Phoenix and San Jose and one new nonstop roundtrip begins from Phoenix to Little Rock. Five-times-per-day roundtrips are inaugurated on April 15 between San Jose and San Diego. Apollo, an industry reservations system, informs the company on April 23 that it has until May 1 to pay for services or have its schedule dumped from the huge computer reservations system.
Other industry reservations systems, including Galileo, Worldspan, and System One, also join in the demand. Southwest begins its own reservations system by offering personal computer systems to travel agents that sell at least 15 Southwest tickets daily.
On May 26, from the old Morris Air market at Orange County Airport, the carrier begins flying seven daily roundtrips to Oakland and eight to San Jose. Also in May, a B-737-3H4 arrives at Phoenix painted in colors patterned after the Arizona state flag; christened Arizona One, the aircraft joins Lone Star One as one of the carrier’s two state-theme aircraft.
Another Morris Air market is tapped, beginning on June 6; from Seattle, four daily roundtrips commence to Spokane and four to Oakland. The same day, the company begins service from Portland with thrice-daily flights to Spokane and four per day to Oakland. From Spokane, four daily roundtrips to Seattle, three to Portland, and one to Oakland are now offered.
Also this day, three daily nonstop roundtrips are added from Baltimore (BWI) to Chicago (MDW), bringing the number of daily services on that route to seven. By adding one more roundtrip, the number of dailies between Los Angeles (LAX) and Oakland is increased to 19.
For the Gong Show contest at this year’s Dallas Chili Cook-Off staged at about this time, Chairman Kelleher dresses up as Elvis to perform Blue Suede Shoes. Afterwards, company pilots present him with a Harley-Davidson motorcycle.
On July 8, Southwest adds two new daily roundtrips between Birmingham and Baltimore (BWI), one from Birmingham to Houston, three new dailies between Louisville and the airport at Baltimore (BWI), and one more between St. Louis and the same Baltimore (BWI) facility. One more flight between Dallas (DFW) and New Orleans is offered, as well as one additional service between Houston and New Orleans. An additional roundtrip between Houston and Harlingen/Rio Grande Valley, three more nonstops from Houston to New Orleans, and one more roundtrip between St. Louis and Chicago (MDW) are added. Also new are one more roundtrip between Ontario and Sacramento, two more between St. Louis and Louisville, one more between St. Louis and Houston, and one more between Louisville and Birmingham.
On August 3, the carrier announces that it is planning a reservations system of its own that uses no tickets; it begins testing the new system on August 22 over routes from Dallas to Little Rock and Corpus Christi to Houston. In September, a total of 236 Head-Up Guidance Systems are ordered for the carrier’s B-737 fleet. Later in the month, Chairman Kelleher announces a new $25 one-way Monday Night Football fare good only after 7 p. m.; aboard the Boeings those evenings, cabin staff begin to wear football jerseys. Also during September, the company holds Elvis lookalike contests. However, on October 1, the FAA requires the company’s flight attendants to stop singing safety advice to passengers at the start of flights.
The same day, low-fare competition begins in the California market with the Shuttle by United division of United Airlines. Company ads note that “Every Seat, Every Mile, Everywhere” are discounted. Also on October 1, a flight attendant base for 494 persons is opened at Oakland. Beginning later in the month, the company offers eight daily flights from Tucson, including four to Los Angeles, two to Las Vegas, and two to San Diego. Beginning October 4, passengers are allowed to employ the new ticketless system for travel between any of the four test cities.
William G. Lee now has “A Conversation with Herb Kelleher,” for Organizational Dynamics XXIII (Fall 1994): 64+.
A total of 15 B-737-3H4 flights are added in California on November 15, bringing the number of daily departures in the Golden State market to 519. Expansion flights include 6 times Los Angeles (LAX) to Oakland for a total of 25; 3 from Oakland to Burbank for a total of 16; 2 between Ontario and Oakland for a total of 15; 1 between Los Angeles (LAX) and Las Vegas for a total of 14; and 3 between Oakland and Seattle for a total of 7. A tentative 10-year pact is reached with company pilots on November 17; the deal raises the flyers’ pay in three of the last five years, but gives them more opportunity to share in company profits.
In December, it is announced, and DOT statistics confirm, that since records were first kept in 1987, Southwest has been number one in on-time performance. These figures, when added to firsts in baggage handling and fewest customer complains, allow SWA to wing the DOT’s Triple Crown award for the third time in three years. On December 15, a leased B-737-3H4 is employed to add five daily roundtrips between Los Angeles (LAX) and Las Vegas; daily departures from the former station reach 109 and from the latter, 110.
At year’s end, a new list of fun facts is released. Among the 1994 highlights, SWA has answered 66,693,786 reservation calls, received 126,389 job applications, burned 50 million gallons of jet fuel per month, has employed 543 married couples, served 62 million bags of peanuts, and has operating costs of $.07 per mile, which no competitor can match.
Passenger boardings surge 15.7% to 42,742,602 while freight climbs 19.5% to 39.69 million FTKs. Revenues jump 12.9% to $2.59 billion as expenses grow 13.5% to $2.75 billion. The pretax profit is $316.7 million and net gain hits $179.33 million.
Airline employment in 1995 stands at 19,933, an 18.5% increase.
Chairman Kelleher is interviewed on “Unorthodoxy at Work” in Management Review, LXXXIV (January 1995): 9+. Fred E. Whittlesey also has a profile in his “CEO Herb Kelleher Discusses Southwest Airline’s People Culture,” Aca Journal IV (Winter 1995): 8+.
As passengers deplane a B-737-2H4 at Dallas (DAL) on January 27, a four-year-old boy exits through the galley servicing door and falls through a nine-inch gap between the aircraft and catering truck; the lad is seriously hurt and rushed to the hospital.
The company issues its last paper ticket on January 31, becoming the first totally “ticketless” operator thereafter. Only one new market is entered this year: Omaha. On the other hand, as a result of the Morris Air takeover, 12 new nonstop city pairs and 7 markets are more fully developed.
Wendy Zellner profiles Southwest’s “Rita Bailey, Manager, Corporate Employment” for Business Week (February 13, 1995): 68-69.
In late June and early July, 18 nonstop daily frequencies are inaugurated from 3 Nashville gates to Baltimore/Washington, Kansas City, and New Orleans. At the same time, additional assets are moved from the East Coast to California to continue the battle with United Airlines’ Shuttle by United division.
On July 29 rival Valujet Airlines reveals that upwards of 300 Mary Kay Cosmetics sales representatives who thought they had booked flights with them or SWA have been duped in a credit card scam.
After five months, it is reported in late July that 30% of the company’s passengers are flying ticketless. Meanwhile, to meet FAA requirements to match checked baggage with passengers, SWA in July begins testing a hand-held, touch-screen 486 computer for curbside checkin at Oakland, Dallas, and Houston.
On August 1, California One, a B-737-3H4 with a giant golden bear honoring the Golden State, is unveiled as the latest in the company’s line of colorful state planes. By the end of the month, the company has added 11 additional departures from Nashville.
During takeoff at Lubbock, Texas, on August 18, the No. 3 wheel assembly separates from the axle of a B-737-3H4; the air crew continue the flight and land uneventfully at Albuquerque.
Wendy Zellner examines the question “Can a Company Hold a 401(k) Hostage?” in Business Week (September 18, 1995): 92+, which reveals the dark story of the termination of Gloria J. Cruz and the airline’s refusal to disburse her 401(K) money until she agrees not to fight for reinstatement.
By the end of summer, departures from Portland and Seattle are increased by 50% while frequencies out of Boise and Spokane are doubled.
To kick off its new nonstop service between Cleveland and Nashville on October 29, the carrier also announces an introductory one-way tariff of $29 or $49 to San Antonio or Austin. Additionally, six more daily departures are added from Nashville.
Having determined that, for flights lasting more than an hour and a half, say from Nashville to Las Vegas, customers require more substantial snacks than peanuts or pretzels. To that end, the company in November begins to distribute “Real Fast Food” on its longer segments, sealed foil pouches containing wheat crackers, a little tub of cheese spread, and a fruit snack bar.
M. A. Verespei profiles the chairman in his “Flying His Own Course,” IW: The Management Magazine CCXLIV (November 20, 1995): 22-24.
At year’s end, Southwest is the world’s largest operator of Boeing aircraft, flying 224 B-737s of different models.
Enplanements accelerate 4.8% to 44,785,573 and cargo grows by 22.6% to 48.67 million FTKs. Revenues jump 10.8% to $2.87 billion while costs climb 12.5% to $2.55 billion. Operating income actually falls to $313.53 million although a $182.62-million net profit is posted.
The total number workers employed grows by 15.1% in 1996 to 22,944; 10 new B-737s will be received during the year and all will be assigned to Florida. Despite the fact that the U. S. Congress has failed to renew the decades-old 10% excise tax on airline tickets, Southwest, together with United Airlines, raises fares by 10% on January 1, effectively cancelling out the savings for its passengers.
A major winter storm severely impacts East Coast airline operations between January 7 and 9. The company is forced to cancel all of its daily departures into and out of Baltimore (BWI) on January 7 and cannot dispatch any from that hub before two B-737s depart on January 9. Final preparations are made to undertake the long-delayed initiation of services in Florida.
The company enters the Tampa and Fort Lauderdale markets on January 22; its appearance will cause difficulties for other airlines providing Florida service, most especially USAir. At this time, Southwest, which has transferred pilots and ground crews from Chicago and Houston, launches six daily roundtrip flights from Tampa to Fort Lauderdale and twice-daily frequencies to New Orleans and Baltimore (BWI). Passengers flying from Fort Lauderdale to New Orleans and Baltimore (BWI) connect via Tampa while daily frequencies are also initiated from Fort Lauderdale to Birmingham and Houston. In addition, daily roundtrips begin from Tampa to Nashville and St. Louis.
Also during the month, a new five-year contract is signed with local chapter representatives of the Ramp, Operations, and Provisioning Association. The Tampa and Fort Lauderdale services are expanded on February 27. During the first quarter, company executives meet with officials in Rhode Island, New Hampshire, Connecticut, Massachusetts, and New York concerning possible expansion of services into the Northeast U. S.
On March 31, a commitment is given to offer simplified business-class fares, based on flight distance, to employees of the Business Travel Contractors Corporation, a consortium of 25 companies. The carrier celebrates its twenty-fifth anniversary with a series of special events throughout the summer.
The company begins flying to and from Orlando on April 7. That day, the company initiates five daily roundtrips from Orlando (OIA) to Fort Lauderdale, twice-daily flights to Baltimore (BWI), and daily nonstops to Indianapolis, New Orleans, and Nashville.
Also in April, 10 acres are leased from the City of Dallas for construction of a new pilot training facility; the complex is expected to be occupied at the end of 1997.
While approaching Ontario, California, on April 20, the pilot of a B-737-3H4 with 132 passengers reports an unresolved left main-landing-gear problem. The aircraft circles the area performing normal emergency gear-extension procedures without success. Finally, the aircraft is diverted to another airport, where an emergency landing is made with minor damage and no injuries.
Frequencies from Orlando are enhanced on May 10 with new daily nonstop roundtrips added to Birmingham and Louisville and frequencies to New Orleans and Nashville increased to thrice daily.
As the carrier celebrates its twenty-fifth, silver, anniversary, it introduces a special livery on June 1 on a B-737-3H4, which has been christened Silver One. The color scheme features the normal tail design atop an all silver fuselage.
New daily nonstop roundtrips commence from Tampa to Columbus, Louisville, and Indianapolis on June 18; the same day, an additional roundtrip is laid on between Tampa and Fort Lauderdale. The inter-Florida route is tied to a promotion with Alamo Rent-a-Car. During the month, one flight per day is withdrawn from the Oakland-Seattle and Oakland-Portland routes.
It is announced on July 1 that the company has employed a total of 300 new pilots during the preceding 12 months. Flight 436, a B-737-2H4A with 127 passengers, aborts its takeoff from Nashville on July 8 after a bird flies into one of its engines. The aircraft skids 700 ft. past the end of Runway 20C and comes to rest with flattened tires, but only one passenger is injured in the subsequent emergency evacuation.
To continue the commemoration of its silver anniversary as a low-cost carrier, the company inaugurates special $25 fares on August 19; the promotion, for which tickets were first sold on July 23, will run through the end of October.
It appears by early fall that at least two of the concern’s competitors are making inroads in their competition with Southwest. Delta Air Lines launches its “Delta Express” low-cost unit on October 1. The Texas-based airline begins its long-planned expansion into the Northeast on October 14 with the sale of everyday, one-way $39 fares.
With SWA attention
World History
