Revisionist History Introducing Business History: How Free Whisky, Hot Pants and Low Fares Led to Southwest's Success
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Nov 19, 2025 Discover the quirky origins of Southwest Airlines, from free whisky giveaways to bold branding with hot pants. Unravel the story of how Herb Kelleher's vision led to cheap late-night flights and a revolutionary seating policy. Learn how the airline thrived in an era of regulation and fought against legacy carriers to take off. Delve into its operational tactics, like ten-minute turnarounds, and see how external challenges, including pandemics and technological failures, have shaped its path. Reflect on how competitive pressures have shifted the industry landscape.
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Triangle Napkin Origin
- Herb Kelleher and Rollin King sketched a Texas triangle on a napkin and planned an intrastate airline connecting Dallas, San Antonio, and Houston.
- They used state regulation loopholes to avoid federal route and pricing controls and launched Southwest.
Regulation Shaped Airline Pricing
- 1960s federal regulation fixed airline prices, forcing carriers to compete on service rather than price.
- That produced luxurious, costly air travel where lower fares were seldom an option.
$10 Late-Night Fare Experiment
- Lamar Muse experimented selling $10 late-night tickets on empty maintenance return flights and drew a flood of new customers.
- The cheap off-peak fares brought entirely new demographics into flying and boosted demand.
