From its inception, Southwest Airlines was never going to be “just another airline.” The business model that Rollin King and Herb Kelleher drew up was clean-sheet
Kelleher, who died Jan. 3 at age 87, was not
interested in the “glamour” that persuaded so many
people to want to start an airline. Quite the opposite,
he wanted to create a business that would be
consistently proftable. And that defnitely was
not typical in the airline industry of the 1970s.
Herb and his co-founders eschewed the
classic airline hub-and-spoke model. They
focused on how to get the most effciency—and
therefore revenue—from operations: a single
aircraft type feet, the Boeing 737, short point-to-point legs and quick aircraft turnarounds so
that every plane was in the air— where it makes
money—as much as possible.
The “LUV” airline’s premise was to keep it
simple so that costs are the lowest they can be,
enabling fares that will attract the most customers,
including many people who had never been able
to afford to fy. No onboard food—that only added
weight and cost. No seat assignments—speeding
up the gate turnaround times. Until new post-9/11
security rules came into place, Southwest did not
even issue boarding passes. Tickets were exchanged
at each gate for reusable, numbered plastic cards
that determined boarding priority.
The commercial magic in this transformational
model was not that it proved highly proftable,
however. It’s that it was embraced, even loved, by
Even today, some 10 years after Kelleher
retired, Southwest is popular with its passengers.
Southwest has spawned many LCCs and ultra-LCCs
worldwide; some of them are also making money.
But none enjoys Southwest’s consistently good
business-customer relationship. For that matter,
there are few legacy carriers that have maintained
high customer regard. A Which survey released in
early January of how passengers ranked airlines that
operate out of the UK placed LCC Ryanair the least-
liked short-haul airline for the sixth year running.
British Airways didn’t rate much better.
Southwest has made signifcant adaptations
over the years. The old brown and orange livery
was transformed into an electric blue. The “lounge
seats”—rows at the front, back and exit areas of
its 737s that faced each other and could sometimes
be the merriest place to be—were discarded. Most
dramatically, the merger-acquisition of Air Tran
Airways in 2011 expanded the network into the
Caribbean, Mexico and Central America.
But it has not changed the fundamentals that
keep it proftable and popular. There’s still just one
aircraft type, although it now includes the new 737
The ‘P’ in Southwest’s enduring
success isn’t profit. BY KAREN WALKER