Behind the Money Business History: The Secret of Southwest’s Success
24 snips
Dec 3, 2025 Discover how Southwest Airlines created a unique business model that shook up the airline industry. Hear about the daring legal battles Herb Kelleher faced to get started and the innovative $10 fares that drew in customers. Explore the playful brand personality that made Southwest memorable, along with a risky operational collapse after a winter storm. As the airline adapts to modern pressures, including assigned seating and evolving strategies, the story highlights the balance between profitability and growth.
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Triangle Napkin Origin
- Herb Kelleher and Rollin King sketched a Texas triangle on a napkin and launched Southwest to serve Dallas, San Antonio and Houston.
- They exploited intrastate rules to avoid federal route and price controls and started a different kind of airline.
Regulation Invited Service Competition
- Late-1960s airline regulation fixed routes and prices so carriers competed on service instead of price.
- That regime made flying expensive and created space for a low-price challenger once intrastate loopholes were used.
The $10 Late-Night Experiment
- Lamar Muse sold late-night seats for $10 on empty return flights and found a new customer base that had never flown before.
- That experiment created cheap off-peak fares and helped Southwest grow demand rather than steal incumbents' customers.
