Business Wars Encore: Southwest vs American Airlines | The Cult of Herb | 5
Jul 7, 2021
Herb Kelleher's dynamic leadership at Southwest Airlines takes center stage, showcasing his efforts to navigate the FAA's restrictive slot system. The story highlights the fierce rivalry with American Airlines during the transformative deregulation era. Listen in as strategic maneuvers and unexpected challenges reshape the airline industry. Kelleher's bold moves, including the acquisition of Muse Air, set the tone for intense competition and innovation, illuminating how charisma and culture play pivotal roles in the airline landscape.
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American's Hub-and-Spoke Model
- American Airlines shifted to a hub-and-spoke model in Dallas, mirroring Delta's Atlanta strategy.
- This move aimed to consolidate passengers and crush Braniff, their main competitor in Dallas.
Kelleher's Slot System Ploy
- The 1981 air traffic controller strike led to the FAA implementing a slot system, rationing takeoffs and landings.
- Herb Kelleher attempted to exploit this system by resurrecting a defunct subsidiary, Midway Southwest Airlines, to gain more slots.
Kelleher's Meeting with the FAA
- Kelleher's Midway Southwest ploy was discovered by the FAA.
- FAA administrator Lynn Helms, amused by Kelleher's scheme, let him off with a warning.