Southwest Airlines was originally founded as Air Southwest on March 15, 1967, by Rollin King and Herbert D. Kelleher in Texas. Due to strict domestic air traffic regulations within the US and legal action by the major American airlines at that time the airline was kept on the ground for more than four years, in which it fought a legal battle finally decided by the Supreme Court on December 7, 1970.
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Southwest Airlines was originally founded as Air Southwest on March 15, 1967, by Rollin King and Herbert D. Kelleher in Texas. Due to strict domestic air traffic regulations within the US and legal action by the major American airlines at that time the airline was kept on the ground for more than four years, in which it fought a legal battle finally decided by the Supreme Court on December 7, 1970.
In the beginning of 1971 the airline changed its name to Southwest Airlines. On June 18 of the same year flight operations were started from Southwest’s basis Love Field Airport in Dallas to San Antonio and Houston. Three Boeing 737-200 and a fourth one acquired later that year were used. In later years they introduced more modern versions of the aircraft, but always stuck with the 737 family. This reduced maintenance and operational costs and revolutionized the airline industry.
Southwest pursued a policy of short flights, no frills and relatively low fares from the beginning, which was the trigger for their success. Their approach became the example for all modern low-cost carriers.
During 1971 and 1972 the airline created losses. One of the aircraft was sold in order to cover the expenses, but the schedule made for four planes remained. Thus Southwest invented the “10 minute turn”, another revolutionary idea taken over by many airlines later on.
From 1973 on Southwest was profitable, every year until today, which is a world-wide record.
In 1974 the new Dallas/Fort Worth airport (DFW) was opened. All but one airline moved there. Southwest stayed at Love Field and consequently expanded its inner-Texan route network. When airline regulation came into effect in 1978 Southwest planned to expand to other states as well. Several interest groups connected to DFW or major American airlines tried to stop these efforts. The result was the so-called “Wright Amendment”, named after Fort Worth congressman Jim Wright, which prevented any airline to fly from Love Field to airports outside Texas and its neighbouring states.
In 1979 the first non-Texan destination, New Orleans, was added. Others followed soon after that. In 1982 a first expansion to the West took place: Phoenix, Las Vegas and San Diego were added to the network. In 1984 the 737-300 – for which Southwest was launch customer – was put into service.
Both the fleet and destination numbers increased quickly, despite the Wright Amendment. However, Southwest kept its strategy of offering short flights between secondary airports of cities throughout the US. This combined with the one aircraft type principle and the 10 minute turn kept the world’s first low-cost carrier’s expenses low and profits high.
The Wright amendment restrictions were slowly loosened because of major efforts by Southwest. State after state was added to the allowed zone. On October 19, 2006, most remaining parts of the amendment were abolished; the rest will follow in 2014.
Southwest managed to survive the 9/11 aftermath without severe financial problems mainly because of their fuel hedging strategy. The airline had purchased fuel options already before the terror attacks and even increased the hedging afterwards. In 2005 the airline still managed to buy fuel for 50 % of the actual market price. Although this has slightly changed, current fuel options still enable Southwest to efficiently operate at least until 2009.
In 2006 Southwest was the third-largest airline in the world by number of passengers carried and the largest domestic carrier in the world, with a network of 63 destinations. It operated a huge fleet of more than 450 Boeing 737s with an average age of 9.5 years. Although being the biggest 737 operator in the world, Southwest planes only were involved in two minor accidents, none of which killing anyone on the plane. In one of the two accidents, however, a boy was killed, when the involved plane crashed into his parents’ car.
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