Business Wars Encore: Southwest vs American Airlines | Free LUV | 6
Jul 12, 2021
The podcast explores the fierce competition in the airline industry during the mid-1980s, highlighting the rise of low-cost carriers like People Express. It examines Southwest Airlines' unique culture and resilience, thanks to dedicated employees fostering a friendly atmosphere. The discussion shifts to economic turmoil, revealing how Southwest thrived while larger airlines struggled. The rivalry intensifies in the 1990s, showing American Airlines facing financial losses as Southwest boldly expands its low-cost strategies in a turbulent market.
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Deregulation and No-Frills Airlines
- Deregulation led to a surge in no-frills airlines, but many failed.
- People Express, one successful example, offered extremely low fares, even charging for coffee.
Burr's Mother's Flight
- People Express's CEO, Donald Burr, discovered his mother was flying American.
- This was due to a 70% off sale, despite People Express offering free flights.
Kelleher and Crandall's Exchange
- Herb Kelleher compared competing with American to Finland being in Russia's shadow.
- Bob Crandall retorted, unlike the Soviets, he wasn't reducing his arsenal.