Southwest Airlines

Southwest Airlines is not to be confused with Southwest Air Lines, a former Japanese airline that is now known as Japan Transocean Air; or Air Southwest, a low-cost British airline.

Southwest Airlines, Inc. (), based in Dallas, Texas, is a low-fare airline in the United States. It is the third-largest airline in the world, as measured in number of passengers carried, and the largest with destinations exclusively in the United States.

History

Southwest Airlines was originally incorporated to serve three cities in Texas as Air Southwest on March 15, 1967 by Rollin King and Herb Kelleher.

Some of the incumbent airlines of the time (Braniff, Trans-Texas, and Continental Airlines) initiated legal action, and thus began a 3 year legal battle to keep Air Southwest on the ground. Air Southwest eventually prevailed in the United States Supreme Court, which ultimately upheld Air Southwest's right to fly in Texas. December 7, 1970, the date of the Supreme Court decision, is considered by many to be the de facto beginning of deregulation in the airline industry.

First Flights

In early 1971, Air Southwest changed its name to Southwest Airlines, and the first flight was on June 18, 1971. Its first flights were from Love Field in Dallas to Houston and San Antonio, short hops with no-frills service and a simple fare structure, features that became the basis for Southwest's popularity and rapid growth in the coming years.

The start of service in June 1971 was accomplished with three 737-200 aircraft that had been obtained from Boeing on favorable terms, and a fourth aircraft was obtained in September of 1971.

Over time, Southwest has added improved 737 variants but has stayed within the Boeing 737 family to reduce operating costs. Because this technique simplified training, maintenance, and ground operations, it revolutionized the industry's approach to building aircraft fleets.

In January, 2005, Southwest retired its last 737-200, the oldest type in its fleet. To celebrate "putting the -200s to bed", selected employees donned Southwest pajamas for an early morning flight that covered the original Dallas-San Antonio-Houston triangle before returning to Dallas Love.

Early losses and financial troubles

The rest of 1971 and 1972 saw operating losses. One of the four aircraft was sold to Frontier Airlines of Denver and the proceeds used to make payroll and cover other expenses. Southwest continued to operate a schedule predicated on 4 aircraft but using only 3, and in so doing the "ten minute turn" was born, and was the standard ground time for many years.

Southwest turned its first annual profit in 1973, and has done so every year since -- a record unmatched in commercial airline industry history. Southwest has used financial techniques to bolster its profitability and counteract many of the fiscal disadvantages of operating an airline.

Hedging fuel

Southwest has a longtime program to hedge fuel prices. Southwest has purchased fuel options for years in advance to smooth out fluctuations in fuel costs. Southwest substantially increased its hedging in 2001 in response to projections of increased crude oil prices. The use of these hedges helped Southwest maintain its profitability during the aftermath of the September 11, 2001 attacks and the oil shocks related to the Iraq War and later Hurricane Katrina. As of 2005, Southwest is currently paying 50% of the market price for its fuel; however, that number will increase as hedges from 2001 and 2002 expire and new hedges at higher prices take effect. Southwest has hedges of varying percentages and prices in place through 2009.

The Wright Amendment

After the opening of Dallas-Fort Worth International Airport in 1974, Southwest was the only airline not to move to the new airport.

When airline deregulation came in 1978, Southwest began planning to offer interstate service from Love Field. This caused a number of interest groups affiliated with DFW, including the city of Fort Worth, pushed the Wright Amendment through Congress to restrict such flights.

Under the restrictions of the amendment Southwest was barred from operating, or even ticketing passengers on flights from Love Field beyond the states immediately surrounding Texas. In effect, to travel through Love Field, a passenger and luggage would have to deplane and fly on a separate ticket, on a separate aircraft.

Southwest's efforts to repeal or even alter the Wright Amendment had been met with oppostion from American Airlines and DFW International Airport. Both AA and DFW contended that any change in the Wright Amendment restrictions will cripple DFW, while Southwest contended that repeal of the Wright Amendment will be beneficial to both Love Field and DFW. In 1997, Southwest's effort began to pay off with the Shelby Amendment which added the states of Alabama, Mississippi, and Kansas to the list of permissible destination states.

Since late 2004, Southwest has been actively seeking the full repeal of the Wright Amendment restrictions. In late 2005, Missouri was added to the list of permissible destination states via a transportation appropriations bill. New service from Dallas Love to St. Louis and Kansas City quickly started in December of 2005.

At a June 15, 2006 joint press conference by the City of Dallas, the City of Ft. Worth, DFW Airport, American Airlines, and Southwest Airlines, the preceding parties announced a tentative agreement on how the Wright Amendment was to be phased out. The agreement needs to be integrated into Congressional legislation and passed, and signed by the President before becoming effective. The parties have a goal of doing so by December 31, 2006. Highlights of the agreement are the immediate elimination of through-ticketing prohibitions, and unrestricted flights to all 50 states 8 years after the legislation taking effect.

Southwest remains the dominant passenger airline at Love Field, maintains its headquarters, hangars, and flight simulators adjacent thereto, and reflects its ties to Love Field in its ticker symbol (LUV).

Despite the restrictions on its home base, Southwest proceeded to build a successful business on an unusual model: flying multiple short, quick trips into the secondary (more efficient and less costly) airports of major cities, using primarily only one aircraft type, the Boeing 737.

Flights

Current Service

Southwest is one of the few airlines to depart from the more traditional "Hub-and-Spoke" flight routing system. It has notably large operations in certain airports. These include Baltimore-Washington International Thurgood Marshall Airport, Chicago's Midway Airport, Houston's Hobby Airport, Las Vegas' McCarran International Airport, Nashville International Airport, Oakland International Airport, Phoenix Sky Harbor International Airport in Phoenix, and San Diego International Airport. Southwest also has large operations at Orlando International Airport and Tampa International Airport, where it handles a large amount of tourist traffic to various cities throughout the eastern United States. Currently, Southwest serves 63 cities in 32 states.

As part of its effort to control costs, Southwest tries to utilize secondary airports which generally have lower costs and are more convenient to travellers than the major airports at some destinations. For example, Southwest flies to Fort Lauderdale-Hollywood International Airport in South Florida, Love Field in Dallas, T. F. Green Airport in Providence, Rhode Island, Midway Airport in Chicago, BWI Airport near Baltimore, Maryland and Washington, D.C., and Oakland International Airport and Mineta San Jose International Airport in the Bay Area instead of Miami International Airport, DFW International, Logan International Airport in Boston, O'Hare International, and San Francisco International respectively.

Southwest makes exceptions where necessary, and flies into some larger airports in major cities, such as Los Angeles International, Phoenix Sky Harbor International Airport, Philadelphia International, and Pittsburgh International.

Markets Lacking Southwest Service

Due to intense competition from near-monopoly airlines such as United, Northwest, and others, some markets are not cost-effective for Southwest. New York City area flights are serviced from Long Island's MacArthur Airport or through Southwest's codeshare with ATA to LaGuardia Airport. Southwest had stopped flying out of the Denver (Stapleton Airport) market in 1986 due to the high costs associated with ATC delays attributable to Stapleton's closely-spaced runways. Southwest reinstated service from the new Denver International Airport on January 3, 2006. Large cities without Southwest service include Minneapolis / St. Paul, Charlotte, Atlanta and Milwaukee.

Top Ten Airports

**Southwest Airlines' Top Ten Airports: (as of February 22, 2006)**
City	Daily Departures	Number of Gates	Nonstop Cities Served	Service Established
Las Vegas	216	21	51	1982
Phoenix	200	24	41	1982
Chicago Midway	200	29	43	1985
Baltimore/Washington	165	19	34	1993
Oakland	138	11	20	1989
Houston Hobby	134	17	28	1971
Dallas (Love Field)	120	14	14	1971
Los Angeles (LAX)	118	12	19	1982
San Diego	92	10	16	1982
Orlando	90	9	28	1982

New service

Southwest announced 15 additional daily roundtrip flights starting in July and August 2006 with 12 of those for Denver including 4 new routes for the airport as follows :

From July 17th =

Denver-Baltimore = Incr from 1 to 2 a day
Denver-Chicago MDW = Incr from 4 to 5 a day
Denver-Houston = 1 new flight
Denver-Phoenix = Incr from 5 to 6 a day
Houston-Tampa = Incr from 2 to 3 a day

From August 4th =

Denver-Houston = Incr from 1 to 2 a day
Denver-Kansas City = 4 new flights
Denver-Las Vegas = Incr from 6 to 7 a day
Denver-Nashville / Denver-Orlando = 1 new flight

From August 17th =

Oakland-Baltimore = 1 new flight
Oakland-Boise = Incr from 1 to 2 a day

From September 14th=

Detroit Metro-Baltimore = 4 flights a day

Washington-Dulles

Beginning October 5, 2006, Southwest will operate 12 daily flights from two gates in Dulles Airport's Concourse B. The new service is as follows:

Dulles to Chicago-MDW = 7 daily departures
Dulles to Las Vegas = 1 daily departure
Dulles to Orlando = 2 daily departures
Dulles to Tampa Bay = 2 daily departures

Southwest announced plans to begin Dulles service earlier this year, but kept destinations secret until now. The official announcement can be found here.

The Southwest Effect

The success and profitability of Southwest's business model led to a common trend being named after the company: The Southwest Effect. Since Southwest's original mission in Texas was to make it less expensive than driving between two points (in the early 1970s, during the first major energy cost crisis in the U.S.), they developed a template for entering markets at rates that allowed the airline to be profitable, yet only on the basis of lean operations and high aircraft utilization. The key concept to the Southwest Effect is that when a low fare carrier (or any aggressive and innovative company) enters a market, the market itself changes, and usually grows dramatically. For example, when fares drop by 50% from their historical averages, the number of new customers in that market may not just double, but actually quadruple, or more. More on the origin of the term.

Southwest has been a major inspiration to other low-cost airlines, and its business model has been repeated many times around the world. Europe's easyJet and Ryanair are two of the best known airlines to follow Southwest's business strategy in that continent (though easyJet operates two different aircraft models today), while Canada's WestJet is using Southwest's modus operandi in that country. New Zealand's Freedom Air and Thailand's Nok Air are other examples of airlines that are based on Southwest's system.

Morris Air

One airline influenced by Southwest was Morris Air, founded by June Morris and David Neeleman and operating in Utah. Southwest Airlines purchased Morris Air and absorbed the capital and routes into its inventory and service. David Neeleman worked with Southwest until his non-compete agreement expired. Then Neeleman founded jetBlue, a competing airline that also incorporates many principles and practices pioneered by Southwest, including building a positive, warm employee culture and operating a simple fleet.

ATA Airlines

ATA Airlines, one of Southwest Airlines main competitors in the Chicago market operated out of Midway Airport alongside Southwest. ATA declared bankruptcy, and in 2004, Southwest injected capital into ATA that (among other things) would have resulted in Southwest's 27.5% ownership stake in ATA upon their exit from Chapter 11 bankruptcy proceedings.

Southwest also entered into its first domestic codesharing arrangement with ATA, which enabled Southwest Airlines to serve ATA markets in Hawaii, Minneapolis, and New York City (LaGuardia Airport). (Some years earlier, Southwest had a short-lived traditional codeshare arrangement with Icelandair at Baltimore-Washington International Thurgood Marshall Airport.)

In late 2005, ATA secured $100 million in additional financing from the firm of Matlin Patterson, and Southwest's original deal with ATA was modified such that Southwest no longer retained the 27.5% stake (or any other financial interest) in ATA. The codeshare arrangement, however, continues to remain in place and continues, with some internal controversy, to expand.

Corporate culture

Intertwined with Southwest's innovative business model has been a consistent emphasis on the value of people, both customers and employees. From the beginning of its operations, Southwest urged employees to have fun doing their work, and to make the experience of flying Southwest not only convenient but enjoyable.

Distinct customer service philosophy

The experience of flying on Southwest is quite different from that of most other U.S. airlines. Tickets must be bought from the airline itself, and can't be purchased through a travel agent or through common online venues like Orbitz or Travelocity. The airline's tickets can be bought over the phone or online at the company's website which features Web only fare discounts. Unlike other major airlines, Southwest reservations can be changed at will, without penalty (save the potentially additional cost of the new reservation). This makes Southwest a very flexible service for customers.

Southwest Experience

Customers are not assigned seats; rather, they are assigned to a "boarding group" depending on their check-in time (earlier check-ins get to board earlier), and are left to find their own seats on the plane. In May 2006, it was announced in a shareholders meeting that they were weighing the costs of adopting an assigned-seating system in 2008, as part of a reservations-technology overhaul now under way. Meal service is less than on historically full service airlines, with shorter flights receiving just a single small snack and soft drink, and longer flights meriting a "Snack Pack" of prepackaged goods. In the post-9/11 era these meals in a bag typically exceed the food served on full-service airlines like United or American. Although there is no video entertainment, Southwest is known for colorful boarding announcements and crews that burst out in song.

For all the leanness in comforts, which helped it pass through the post-9/11 travel slump as one of the few profitable major American airlines, Southwest manages to maintain excellent customer satisfaction ratings.

Rapid Rewards

Southwest's frequent flier program is called Rapid Rewards. Currently, customers receive one credit per each one-way ticket (even though the flight may have stopovers). Previously a .5 credit bonus was offered for each segment booked online, (i.e., each round-trip ticket booked online received a total of 3 Rapid Rewards credits). This was discontinued in late 2005. Double Rapid Rewards credits used to be awarded for online booking, but this policy was eventually modified in early 2005. In addition, one-half credit is also earned for using a Southwest partner to book any car rental and/or hotel stay, regardless of whether a Southwest flight is involved. Therefore, by booking one's flight online, and using a SWA partner for one's hotel stay and car rental, one may receive 3 Southwest Rapid Rewards credits per trip. This arrangement has consistently proved popular with frequent fliers, and has won numerous Freddy Awards over the years. After recent program modifications it is unknown how the customer base will be impacted and whether the airline will continue to earn Freddy Awards.

In February 2006, Southwest instituted Capacity Controls to redeming its free tickets. This means that the airline limits the seats offered to frequent travelers using free certificates on each flight, whereas previously if there was a seat available, you could use the award, provided you were not flying on one of the five blackout dates.

In early 2006, Southwest expanded its codeshare agreement with ATA Airlines and now allows redemption of award tickets on Hawaii flights at the rate of two awards per round trip flight. Travelers can also earn twice the normal number of credits on Hawaii-bound flights.

Playful, effective advertising

The company, from inception, employed humor in its advertising. Examples include "Just Plane Smart," "The Somebody Else Up There Who Loves You" and "THE Low Fare Airline". The airline's current slogan is "A Symbol of Freedom". A select history of print and video ads are available on the company website^*.

Since the 1990s, Southwest has been running a television ad campaign based on the phrase "Wanna get away?". The commercials present comical, embarrassing situations in which people find themselves wanting to "get away". Most ads are accompanied by the sound clip "^* You are now free to move about the country".

The PA "ding" has become synonymous with Southwest Airlines, and inspired the name of an online ticket offer program, Ding!.

"Just Plane Smart"

Shortly after Southwest started using the "Just Plane Smart" motto, Stevens Aviation, who had been using "Plane Smart" for their motto, threatened a trademark lawsuit. Instead of a lawsuit, the CEOs for both companies staged an arm wrestling match. Set for two out of three rounds, the loser of each round was to pay $5000 to the charity of their choice, with the winner gaining the use of the trademarked phrase. A promotional video was created showing the CEOs "training" for the bout (with CEO Herb Kelleher being helped up during a sit up where a cigarette and glass of scotch was waiting) and distributed among the employees and as a video press release along with the video of the match itself. Herb Kelleher lost the match for Southwest, with Stevens Aviation winning the rights to the phrase. Kurt Herwald, CEO of Stevens Aviation, immediately granted the use of "Just Plane Smart" to Southwest Airlines. The net result was both companies having use of the trademark, $15000 going to charity and a healthy dose of goodwill publicity for both companies.

Colorful personalities

Southwest employees are generally well-known for friendliness, which is often attributed to a unique "love-based" corporate atmosphere that made chairman and founder Herb Kelleher a celebrity in the business world. The President of Southwest is former corporate secretary Colleen Barrett, who has been with the company since day one. Southwest's CFO is Laura Wright.

Concerns attributed to labor unrest and complaints by the Transportation Workers Union (TWU) representing Southwest flight attendants were reportedly a factor in the recent resignation of Kelleher's hand-picked replacement as CEO. Jim Parker resigned in July 2004 and was replaced by Chief Financial Officer Gary Kelly. ^*

Southwest is the basis of the American version of the reality show Airline.

Fleet

Southwest's fleet is entirely made up of Boeing 737 aircraft.

Type	Number	Seats	Notes
737-300	194	137	Short haul / domestic
737-500	25	128	Short haul / domestic
737-700	245	137	Medium haul / domestic

Southwest has been a launch customer for all three of the Boeing 737 variants it currently operates, and was the first airline to put both the Model 500 and next-generation Model 700 into service ^*.

Southwest's fleet has an average age of about 9.5 years, and fly an average of about 7 flights per day. Per the 2004 Annual report, the average daily utilization is 11:20.

Southwest's seats are no narrower than any other operator of 737s in the U.S. JetBlue, United Airlines and a few other competitors operate the Airbus A320 series, which does tend to have slightly wider seats. However, the overall comfort level of Southwest's seating is a matter of taste. Due to Southwest's unusually generous seat pitch and leather seats, many travelers find their seating superior to that of other U.S. domestic airlines.

Currently, Southwest is purchasing only the 737-700, since the 737-300 and the 737-500 are out of production. The 737-700 is quiet and powerful, gaining altitude more quickly, diminishing the noise perceived by people on the ground. These planes help reduce noise at airports served by Southwest.

Livery

Southwest's original primary livery was beige and red, with orange on the tail end, and pinstripes of white separating each section of color. The word 'Southwest' appears in white on the beige portion of the tail. (Although, on the original three 737-200s, from June of 1971, the word 'Southwest' was placed along the upper rear portion of the fusilage, with the word 'Airlines' painted on the tail where 'Southwest' is today. Example: N21SW

Southwest introduced the Canyon Blue Fleet in 2001, its first primary livery change in its 30-year history. Spirit One ^* was the first plane painted in the color scheme. The new livery replaces the primary beige color with canyon blue and changes the Southwest text and pinstripes to gold. The pinstripe along the plane is drawn in a more curved pattern instead of the straight horizontal line separating the colors in the original. The original livery is gradually being phased out, but three aircraft will remain in the original livery to commemorate Southwest's original three cities.

All of the 737-700 series aircraft, have been fitted with winglets have "Southwest.com" written on the outer faces of the winglets. 737s with the original livery or any of the special liveries do not have this writing at this time.

Some Southwest planes feature special themes, rather than the normal livery. These theme planes have been given special names, usually ending in "One". Some of the most well-known examples are:

Shamu: The three airplanes are painted to look like an Orca, with advertisements for SeaWorld. (N334SW), (N713SW), (N715SW)
- The first aircraft to be painted in the "Shamu" scheme was N334SW (1988), a 737-300, and it was later followed by N507SW (Shamu II) and N501SW (Shamu III), both 737-500s. Subsequent to the retirement of Southwest's 737-200s, the 737-500s began to stay within a smaller geographic area formerly operated by the 737-200s, and as such, Sea World was no longer getting the optimal national exposure from these two aircraft. Two 737-700 aircraft, N713SW and N715SW, were repainted as the new Shamu aircraft, and both N501SW and N507SW were eventually repainted in Canyon Blue colors. All three current Shamu aircraft are no longer referred to as Shamu I, II, or II. The artwork on the nose of each aircraft simply states "Shamu".

Lone Star One: (1990) The flag of the state of Texas applied across the airplane. (N352SW)
Arizona One: (1994) The flag of the state of Arizona applied across the airplane. (N383SW)
California One: (1995) The flag of the state of California applied across the airplane. (N609SW)
Silver One: (1996) 25th Anniversary airplane. (N629SW, Original, Canyon Blue)
Triple Crown One: (1997) Livery dedicated to the employees of Southwest, in recognition of Southwest receiving five Triple Crown airline industry awards (best on-time record, best baggage handling, and fewest customer complaints). (N647SW)
Nevada One: (1999) The flag of the state of Nevada applied across the airplane. (N727SW)
New Mexico One: (2000) The flag of the state of New Mexico applied across the airplane. (N781WN)
Spirit One: (2001) 30th Anniversary airplane. (First Aircraft in New Canyon Blue paint scheme) (N793SA)
Maryland One: (2005) The flag of the state of Maryland applied across the airplane. (N214WN)
Slam Dunk One: (2005) Basketball superimposed on side of aircraft and a different NBA team logo on each overhead bin in the cabin, recognizing Southwest's partnership with the National Basketball Association. (N224WN)
Southwest has also taken delivery of the 5,000th 737 produced (February 13, 2006). (N230WN)

All special planes prior to Spirit One originally wore the standard beige, red and orange livery colors on the vertical stabilizer and rudder. Subsequent special editions -- Maryland One and Slam Dunk One, so far -- feature tails with the canyon blue color scheme, and all earlier specials, with the exception of Triple Crown One and Nevada One have been repainted to match.

Incidents and accidents

Southwest Airlines has never had a passenger fatality, making it among the safest airlines in the world. The airline has had two major incidents of note, one involving a ground fatality.

On March 5, 2000, Southwest Airlines Flight 1455 overran a runway at the Bob Hope Airport in Burbank, California, leaving 43 injured but no fatalities. The incident resulted in the dismissal of the pilots.

On December 8, 2005, Southwest Airlines Flight 1248 skidded off a runway at Midway Airport in Chicago. The plane was landing in heavy snow conditions. Joshua Woods, a young boy, was killed in a car struck by the plane after it had skidded into a street. There were also several minor injuries reported from passengers onboard the aircraft and on the ground.

External links

1971 establishments | Southwest Airlines | Low-cost airlines

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