SOUTH WEST AIRLINES

Southwest Airlines Co

 (NYSE: LUV) is an American airline based in Dallas, Texas. Southwest is the largest airline in the United States, based on domestic passengers carried, as of June 30, 2010.[2] Southwest operates more than 3,400 flights a day, as of March 2011, utilizing a fleet of 552 aircraft

Foundation

Southwest Airlines traces its roots to the March 15, 1967 incorporation of Air Southwest Co. byRollin King and Herb Kelleher to provide service within the state of Texas

Legal action by competitors

Kelleher believed that by providing intrastate service within Texas, the airline could avoid federal regulation. Three incumbent airlines, Braniff, Trans-Texas, and Continental Airlines, initiated legal action which was not resolved for three years. Air Southwest prevailed in 1970 when theTexas Supreme Court upheld Air Southwest’s right to fly within Texas. The Texas Supreme Court's decision became final on December 7, 1970, when the U.S. Supreme Court declined to review the case without comment.

The story of Southwest’s legal fight was turned into a children’s book, Gumwrappers and Gogglesby Winifred Barnum in 1983. In the story, TJ Love, a small jet, is taken to court by two larger jets to keep him from their hangar and to stop him from flying. In court, TJ Love’s right to fly is upheld after an impassioned plea from a character referred to as "The Lawyer". While no company names are mentioned in the book, TJ Love’s colors are those of Southwest Airlines, and the two other jets are colored in Braniff and Continental’s colors. The Lawyer is designed to resemble Herb Kelleher. The book was adapted into a stage musical, Show Your Spirit, sponsored by Southwest Airlines, and played only in towns serviced by the airline

Name change and first revenue flight

On March 29, 1971, Air Southwest Co. changed its name to Southwest Airlines Co. Operating from its Dallas, Texas headquarters, Southwest Airlines began customer service on June 18, 1971, offering service to the Texas cities of Houston, Dallas and San Antonio using three Boeing 737 aircraft

Early corporate culture

Southwest Airlines founder Herb Kelleher studied California-based Airlines extensively and used many of the airline’s ideas to form the corporate culture at Southwest, and even on early flights used the same "Long Legs And Short Nights" theme for stewardesses on board typical Southwest Airlines flights. The original flight attendants that worked for Southwest Airlines were chosen by a committee of individuals that included the same person who had selected hostess for Hugh Hefner’s Playboy jet. The selection resulted in a group of female flight attendants that were described as long-legged dancers, majorettes, and cheerleaders with "unique personalities". Southwest Airlines and Herb Kelleher proceeded to dress these individuals in hot pants and go-go boots

Early losses and financial troubles

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

Wright Amendment

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 Dallas-Ft. Worth Airport, including the city of Fort Worth, to push the Wright Amendment through Congress to restrict such flights.[13] Under the restrictions of the amendment, Southwest, and all other airlines, were barred from operating, or even ticketing passengers on flights from Love Field to destinations 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

The Wright Amendment’s restrictions did not apply to aircraft configured with 56 or fewer seats. In 2000, Legend Airlines attempted to operate long distance business-class flights using older DC-9s with 56 seats, but did not have the resources to survive American Airlines's legal and marketing attacks, and quickly ceased operations. Southwest did not use the 56 seat loophole, even with its market strength at Love Field and the availability of more modern regional jets such as the CRJ-700/900 and the Embraer ERJ 145 family.

Southwest’s efforts to repeal or even alter the Wright Amendment were met with opposition from American Airlines and Dallas Ft. Worth International Airport. Both American Airlines and DFW contended that repeal of the Wright Amendment restrictions would cripple DFW, while Southwest contended that repeal of the Wright Amendment would be beneficial to both Love Field and DFW.[citation needed] Continental Airlines has a successful hub and spoke operation atHouston Bush Intercontinental Airport despite unrestricted competition from Southwest at Houston Hobby Airport.

In 1990 the airline registered its aircraft in Houston so it could pay aircraft taxes in Houston, even though the actual corporate headquarters were in Dallas. Southwest was not physically relocating any assets, but Texas state law allowed the airline to choose either Dallas or Houston as the city of registry of its aircraft.[

In 1997, Southwest’s efforts began to pay off with the Shelby Amendment, which added the states of Alabama, Mississippi and Kansas to the list of permissible destination states. Southwest began offering non-stop service between Dallas Love Field and Birmingham, Alabama, which it could not do prior to the enactment of the Shelby Amendment.

In late 2004, Southwest began 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 Love Field to St. Louis and Kansas City quickly started in December 2005.

At a June 15, 2006 joint press conference held by the city of Dallas, the city of Ft. Worth, Dallas-Ft. Worth Airport, American Airlines, and Southwest Airlines, the said parties announced a tentative agreement on how the Wright Amendment was to be phased out. Both the U.S. Senate and House of Representatives passed Wright-related legislation on September 29, 2006, and it was signed into law by PresidentGeorge W. Bush on October 13, 2006. The new law became effective on October 16, 2006, when the FAA Administrator notified Congress that any new aviation operations occurring as a result of the new law could be accommodated without adverse effect to the airspace]

Southwest started selling tickets under the new law on October 19, 2006. Highlights of the agreement are the immediate elimination of through-ticketing prohibitions, and unrestricted flights to domestic destinations eight years after the legislation takes effect. Because of the agreement, nationwide service became possible for Southwest; the law also defined the maximum number of gates at Love Field. Southwest controls all of the Love Field gates except for four gates controlled by American Airlines, Continental Airlines, and Delta Air Lines. The future of the Legend Airlines terminal for use by commercial airlines is in doubt because of the limit on number of gates.Southwest remains the dominant passenger airline at Love Field, maintains its headquarters, hangars, training centers, and flight simulators adjacent thereto, and reflects its ties to Love Field in its ticker symbol (LUV)