By Suzy Strutner, managing editor at Grow Wire
- Herb Kelleher, the co-founder of Southwest Airlines, died on Jan. 3. Industry players remember his lighthearted attitude and cost-saving techniques that changed an industry.
- Kelleher was instrumental in growing Southwest from a local, short-haul airline to a global enterprise.
- He credited commitments to both low costs and employees for Southwest’s success: The company has turned a profit for 45 years straight.
Southwest Airlines co-founder Herb Kelleher died on Jan. 3. He was 87 years old.
Industry analysts, competing airlines and Southwest team members are mourning the loss amid stories of Kelleher’s happy-go-lucky attitude, which many say was instrumental to Southwest’s industry-defining success as a company. Officially launched in 1971, Southwest has turned a profit for 45 consecutive years while pioneering a low-cost model that other airlines emulate.
Kelleher, a former lawyer, co-founded Southwest with pilot Rollin King and a vision to offer short-haul flights in Texas. The company eventually grew into the largest low-cost airline in the world, offering flights to 99 U.S. destinations and 10 countries abroad.
Kelleher drove the company’s growth from its earliest stages.
1969 – From founder to lawyer
Southwest Airlines had a bit of a rocky start. Shortly after Kelleher and Rollins filed their application for Southwest Airlines with the Texas Aeronautics Commission, two competing airlines sued the young company in an attempt to maintain their monopoly over local Texas routes. Using his legal background, Kelleher represented Southwest in court and paid all legal costs out of his own bank account.
The legal battles lasted three years and prevented Southwest from starting to offer flights. It’s unclear whether the company would’ve ever taken off without Kelleher’s legal skills or grit.
“[The competing airlines] were simply trying to use their superior economic power to squeeze us dry so we would collapse before we ever got into business,” Kelleher told Fortune in 2001. “I was bound and determined to show that Southwest Airlines was going to survive and was going into operation.”
Its first flight took off in June, 1971.
Kelleher (pictured here in Southwest's earlier days) unexpectedly flexed his legal skills. (credit: Southwest)
1976 – Ten 737s
Southwest put its sixth Boeing 737 into service in 1976, shortly after ordering four additional planes for its growing fleet. Many airlines experiment with plane models, but Southwest flies only 737s to this day. It’s a cost-saving move, along with the airline’s famous (or infamous, depending on whom you ask) lack of seat assignments.
Southwest’s early execs stuck with one model because “it was easier and cheaper to maintain a one-plane fleet,” Bloomberg author Joe Nocera explains. “That’s also why Southwest didn’t have seat assignments: that made it easier to turn around a plane in 20 minutes or less. (Kelleher used to say that planes didn’t make money sitting on the ground.)”
These company cost-cutters helped keep fares low. Onboard, Southwest customers were served peanuts in place of the elaborate meals on other airlines. The idea was to remind customers they were “flying for peanuts.” (There’s little doubt Herb’s humor influenced that phrasing.)
Southwest's fleet still comprises soley 737s.
1981 – Mr. President
Kelleher assumed the role of Southwest’s president and CEO in 1981, shortly after the company went public. (He held the role for 20 years and remained executive chairman until 2008.)
Keller’s appointment reinforced the company’s ethos of sticking with what works, Skift notes. Kelleher valued employees’ happiness over all. The airline didn’t—and still doesn’t—charge for bags, even as others raise prices and instate new policies. Southwest doesn’t charge change fees, and its fares aren’t listed on third-party websites.
1992 – Good PR
Kelleher made worldwide news in 1992 when he arm-wrestled Stevens Aviation chairman Kurt Herwald over the right to the slogan, “just plane smart.” Litigation would’ve been the typical reaction to such a disagreement, Priceonomics notes. Kelleher’s response showcased his lighthearted side and belief that work could be fun, even in tough moments.
Press dubbed Kelleher's arm-wrestling stunt "Malice in Dallas."
Kelleher’s spirit lives on in Southwest’s crew, who are continually encouraged to express themselves via song, dance and even flash mobs. (See: The many viral videos of cabin crew cracking jokes or rapping pre-flight.)
“We’ve never thought that you should have to come to work and assume a mask, be different from who you really are, and look like you’re a bunch of little lead soldiers stamped out of a mold,” Kelleher told USA Today. “We give people license to be themselves … and people respond to that.”
2001 – No LUV lost
The airline industry suffered greatly in the decade after Sept. 11, 2001. Many airlines cut staff, laying off tens of thousands of workers overall. Southwest didn’t: Low costs and strong balance sheet allowed it to keep all of its workers employed, Kelleher said during a 2003 talk at Wharton.
“Even in the best of times, we kept our costs low and questioned every expenditure,” he told listeners. “For years, I used to approve every expenditure over $1,000. Why? To encourage a cost-conscious culture. I couldn’t look at all of them, of course. But I would question them selectively, and that kept people paying attention.”
Ten years after Sept. 11, in a 2011 interview, Kelleher told reporters that Southwest’s ability to retain employees during the industry crisis was his proudest achievement.
Southwest launched a website today, honoringherb.com, that chronicles Kelleher’s achievements. The company has also tweeted about the loss.
“Herb has been quoted as saying, ‘It is my practice to try to understand how valuable something is by trying to imagine myself without it,’” one tweet reads. “We now have to imagine ourselves without Herb.”
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