In the Plane at Terminal With a Barrett in My Hands Again Party in the Usa Modern Warfare Parody

"Let's do a Dr. Ruth spoof," says Herb Kelleher, jumping to his anxiety in a spasm of creativity. Kelleher is brainstorming with three of his top managers in his chaotic Southwest Airlines function near Dallas' Love Field. The task at hand is to come up upward with skit ideas for an airline-industry conference. Kelleher envisions a scene in which Dr. Ruth would exist on the telephone talking to Robert Crandall, the annoying head of Dallas-based American Airlines, which has simply become the largest domestic carrier. "Remember. Bob," Kelleher says, mimicking the tiny sex doctor, "size isn't everything."

The focus shifts to New York deal-maker Donald Trump and his attempt to buy the Eastern Airlines Shuttle, which runs betwixt Boston, New York, and Washington. Someone suggests a musical parody: "The Lady is a Trump." Then Kelleher lights on the battle for the entertainment-park business. Kelleher'south own Southwest Airlines could be creative fodder for this one; in 1988 it became the official airline of Sea Earth. Delta has Disneyland and Disney World. Kelleher suggests taking a poke at United, which not only does not accept an amalgamation but besides just lost its place as the largest airline. "Why non make United the official airline of Popeyes fried chicken?" he suggests.

The meeting epitomizes the Kelleher personality: his irreverence, his spontaneity, his zaniness, and, nearly of all, his competitiveness. The airline he helped constitute and now runs is a direct extension of that personality—Kelleher himself oft stars in the company's offbeat commercials. In an industry aggress by turmoil and takeovers, Southwest thrives by making its ain rules.

At 57, Kelleher looks and acts like a first-generation astronaut, a hard-driving, hard-drinking, fast-living sort of guy whose swept-dorsum hair frames a prominent widow'south peak and madcap blue eyes. His office is filled with small porcelain statues of wild turkeys, a tribute to his drink of choice. He smokes five packs of cigarettes a mean solar day, rarely drawing a clean jiff of air, simply so far he is in proud and happy defiance of the laws of health.

To understand that the man and his airline are one, all you demand to practice is get aboard one of his planes. You know the shtick. It's seven-thirty in the morn. You're sleepy. Your tummy is in knots. Yous're under pressure. You merely want to drinkable your coffee, read your memos, and go to your meeting. And then it starts: the Southwest Experience. The big-haired flight attendants all look similar they went to the same West Texas high school. They are dressed in everything from amorphous shorts and wild-print shirts to reindeer outfits. They give you rubber information in rap, sing Christmas carols, or tell you the wrong time on purpose. Anything for a laugh. You coffin your head in work. They're non going to get you this time. You lot wish they would cut it out. "Every bit soon as y'all set both cheeks on your seats, nosotros tin can get this former bird moving," comes the microphonic twang from the front of the airplane. There may exist no nutrient, no closets, no leg space, but at 7-30 in the morning, you're belted in your seat, laughing like a perfect fool.

Since June xviii, 1971, when Southwest made its outset flight from Dallas to San Antonio with x paying customers, Texas has never been the same. By making flying around Texas easier than driving, Southwest immediately achieved the incommunicable—information technology separated Texans from their cars. Its virtual monopoly of the Texas commuter market has made it a modern-day cattle bulldoze, the master means of getting our appurtenances—that is, ourselves—to market place.

Southwest has radically altered our psychic landscape. The distance between any 2 of the ten major cities in Texas linked by Southwest is roughly 55 minutes. Y'all tin can exit Harlingen or Dallas on a morning flight and practice a bargain in Houston over breakfast. Kelleher is living proof that the airline has made driver marriages possible: he lives in Dallas, his wife, Joan, lives in San Antonio, and they see each other on weekends via Southwest.

Years ago Southwest issued bumper stickers that said: "Wing Southwest. Herb Needs the Money." Information technology worked; Southwest has made Kelleher—who is the president, the chairman of the lath, and the master financial officer—a rich man. In salary lonely he makes nigh $400,000 a year, and he is Southwest's largest individual shareholder, owning 441,465 shares worth roughly $5 million. Today Southwest is the eleventh-largest airline in the state and one of the strongest carriers in the nation. In 1988, with Texas yet in a slump and the airline industry in upheaval, Southwest fabricated $57 1000000 in profits, its best year always, and it reported $860.4 million in revenues. Kelleher predicts that past 1990 Southwest will acme $1 billion, the industry'southward ain benchmark of a major carrier. (By comparison, American's revenues last twelvemonth were $eight.5 billion.)

Nevertheless, Kelleher clings to an underdog mentality. Before his first plane got off the ground, Kelleher spent three years in bruising legal warfare with Braniff and Texas International for the very correct to fly. Southwest now serves 27 cities, sixteen of them outside of Texas, and in 1988 Southwest carried 14 million passengers with a fleet of 85 jets. According to airline-industry calculations, rider traffic every bit a whole expanded by iv percent last yr; Southwest grew by 16 percent. Kelleher the competitor is always looking for new conquests. His plan is to have the airline double in size—in revenues and number of planes—by the mid-nineties.

It is success achieved the Kelleher way—by existence an iconoclast and going it alone. Southwest doesn't lure us with gourmet meals, leather seats, or costless newspapers. It treats us similar cattle, but it gets us where nosotros have to go, when nosotros have to go, and commonly on time. (After all, who needs food or comfort when we're having and so much fun?) Southwest had an easy time adjusting to deregulation, which sent the residual of the industry reeling in 1978. Considering Southwest started out operating only inside state borders, it has always existed in a deregulated environment. As a result, Kelleher'southward mantra is: simple and fast. Southwest is the only airline in the country that won't make connections with other airlines. Nor are Southwest's flights role of travel agents' computerized reservation system; Kelleher refuses to pay the fee for the privilege. Southwest's tickets look like grocery receipts, which makes them far cheaper than the multipage tickets issued by other airlines. And Southwest was the outset in the manufacture to sell tickets through automated teller machines.

In that location's more. A few years ago Kelleher ordered the closets removed from the front of the planes because he noticed that parting passengers dawdled in front of them. When a cash crunch forced the sale of an airplane in 1972, pilots were ordered to fly the same schedule as earlier, but with three planes to encompass the route instead of iv. The only manner to do that was to get the plane to the gate and dorsum into the air inside ten minutes. Today 85 percent of Southwest flights turn around within xv minutes; 30 percent accomplish it in ten. Moves such as those are why information technology costs Southwest 5.7 cents per passenger mile to operate the airline, the lowest in the industry, which in turn is why Kelleher is able to offer some of the everyman fares effectually.

Southwest sees its mission as different from that of other airlines. Most of them operate on a hub-and-spoke system. That ways, for example, that if you want to go to New York from smaller spoke cities such as Austin or San Antonio, commencement you have to fly to the hub city of Dallas. Southwest flies from betoken to signal, carving out its own market while avoiding direct competition with the majors. As Kelleher says, "We don't fly to Dallas because we want to go to New York. We fly to Dallas and Houston because they are worthy destinations in and of themselves."

"You're crazy. Permit's do it."

Among the mementos lining Herb Kelleher's part—the toy cars and planes, the white shirt he wore on his offset solo flying in a private airplane—is a framed napkin with a triangle scribbled on information technology. At the acme of the triangle is a dot that represents Dallas, on the left is one indicating San Antonio, to the right is Houston. This napkin is a facsimile of the napkin that businessman Rollin King drew on in 1966 when he came to Kelleher's San Antonio police force function to seek legal help with his charter-airplane business. King pitched the idea of starting an airline to connect Texas' three largest cities. The reason Southwest Airlines exists is that Kelleher was a very bored San Antonio Lawyer. When Rex said, "Herb, allow'southward offset an airline," Kelleher replied, "Rollin, you're crazy. Let's do it."

Or at to the lowest degree Kelleher said something like that. Herb often serves every bit his own Homer—he has a tendency to record and embellish legends even as he lives them. Male monarch recalls that when he drew the triangle, he knew his thought would work, but Kelleher was consumed with doubts nigh whether an intrastate airline would e'er wing. Nonetheless, Kelleher was seized past the simplicity of the idea, put upward $20,000 of his own money, and became counsel to the would-be enterprise.

Who is this human being who took a crazy idea and transformed Texas? Kelleher was born on March 12, 1931, in Camden, New Jersey. He grew up in nearby Haddon Heights, a middle-class suburb of Philadelphia, where his father was a manager of the Campbell Soup Company. His female parent, Ruth, was 38 years old when Herb was built-in and already had three older children, two boys and a girl. "I ever causeless I was a slipup," Kelleher says. When Herb was just 12, his begetter died of a heart assault. Past the time he was an adolescent, one of his brothers had been killed in the war and his other siblings had moved abroad. Suddenly Herb was his female parent's only kid, and like many successful men, he credits her as his strongest influence. "She never coddled me," says Kelleher. "She e'er encouraged me to be independent." He worked half dozen summers at the Campbell Soup factory, and he played sports, both basketball and football, well into dark most evenings.

When Kelleher was eighteen years one-time, he played a basketball game that established his lifelong leadership mode. He was the president of his class at Haddon Heights High and a well-known basketball star. On this particular night Kelleher had managed to score 29 points simply before the end of the game and was within one shot of becoming Haddon Heights' best scoring champion. In that location he stood in the center of the court, dribbling the ball aimlessly. The coach chosen time-out. "What's the matter, Herb?" he demanded. Herb said he was refusing to shoot because he didn't want to separate himself from the rest of the squad. The next affair he knew, Herb was surrounded by teammates urging him to go for the shot. Herb wanted to exist drafted by his peers for a place of preeminence. Once he was, he didn't asphyxiate. He left the huddle, took the shot, and fabricated the needed two points. At a crucial time in Southwest's history, he would play out a corporate version of the game.

Herb went off to college at Wesleyan Academy in Middletown, Connecticut, where he majored in philosophy and literature. Had he not agreed to go on a blind date with Joan Negley, a socially correct San Antonio daughter who was attention Connecticut Higher, Herb might never have fix foot in Texas. They met at a basketball game. "I had heard what a great basketball star he was," says Joan, "but that night he sat on the bench the whole game. I retrieve the coach let him play the final minute and a one-half." After the game, they went out for hamburgers, and Joan had to pay the check. Herb had no coin. He chosen her "J.P.," after the tardily financier J.P. Morgan, a nickname that stuck.

They were married in 1955 in San Antonio. Kelleher, eager to pursue a career that would give him financial independence, attended law school at New York University, where he fabricated law review and graduated with honors in 1956. He clerked for the Supreme Court of New Jersey and then joined the largest law house in the state. Past then, he and Joan had two children and Kelleher was well on his way to becoming a successful corporate lawyer. On vacations they would come to San Antonio and to Joan's family ranch near Big Bend. Slowly, Texas became function of Kelleher'due south imagination. Joan never asked him to move to San Antonio for fear he would say yes and later on experience he had been pressured. "One day I was walking in the snowy muck in Newark, and I thought to myself, 'I could be in Texas,'" he says, explaining their 1961 move.

Joan has the languid, well-mannered demeanor of a adult female who has known comfort and privilege all her life and feels no compulsion to flaunt information technology. Her family'south fortune is derived from ranching and insurance interests. Information technology is entirely possible that the reason Joan never asked Herb to move to San Antonio is that she enjoyed being away from the order in which she was raised. Since her return, she has worked for various borough causes, such as historic preservation, simply mainly she has raised her family unit.

Kelleher has had footling fourth dimension for the conventions of domesticity. "He changed a diaper in one case and threw up," says Joan. The couple have four children: Julie, 31, works with animals at Sea World; Michael, 29, has a retail software store; Ruth, 27, is a lawyer who works for the Texas Senate; and David, 25, is bartender at a San Antonio restaurant. The Kellehers' wedlock may take run according to fifties rules, just now has an eighties twist: He lives in a University Park townhouse in Dallas, and she lives in their home in Olmos Park. Neither of them regards their driver marriage as foreign. "I knew what kind of man I was marrying earlier I married him," says Joan.

When Kelleher starting time arrived in San Antonio, Joan's family moved chop-chop to become him established. Her stepfather, John Catto, a wealthy insurance broker, took him downtown to run into Wilbur Matthews, the starched sultan of the local legal customs and the caput of the house of Matthews and Branscomb. Kelleher sat passively every bit the two men arranged for him to bring together Matthews' firm. The subject of compensation never came upwards.

Kelleher had been in boondocks less than a month earlier Alfred Negley, his brother-in-law, introduced him to John Connally, who was running for governor. Connally was sufficiently impressed to put Kelleher in charge of his gubernatorial campaign in northern Bexar County. Connally won the governor'due south race in 1962 with a boost from Bexar County. Some people struggle for generations to become a role of the small power circle in San Antonio; Kelleher found himself a consummate insider within less than a year.

Next he took his place at Wilbur Matthews' law frim, which at the fourth dimension operated at a genteel step that immune for the serving of tea in the early afternoon. But Kelleher was constitutionally unsuited for a genteel style of life. He worked well into the dark on complicated cases, ever writing out his legal briefs on yellow pads in his flowing cursive. Only he was chronically disorganized. I night the security guard walked into Kelleher's office and mistook his mess for signs of a struggle. The guard telephoned police and reported a break-in. "Every twenty-four hours I went to work I felt my shoulders droop a little more than," Kelleher acknowledges.

Then Rollin King entered his life and scribbled the triangle on the napkin, and Kelleher was bored no more. Kelleher took Rex and his idea for Southwest Airlines with him when he left Matthews' constabulary firm in 1970 and joined Jesse Oppenheimer and Stanley Rosenberg—2 other restless San Antonio lawyers—to form a new firm.

If King was the father of Southwest Airlines, Kelleher was its midwife. His $20,000 made him a founding shareholder. He went to the same men who had given coin to Connally'southward entrada—John Peace, Robert Strauss, Dolph Briscoe, Curtis Vaughan, and other power brokers—and raised the starting time $543,000.

On November 27, 1967, Kelleher filed an application with the Texas Aeronautics Commission to launch Southwest Airlines with flights betwixt Dallas, Houston, and San Antonio. The application was approved unanimously, and so the war began. Braniff and Trans-Texas (the forerunner of Frank Lorenzo'southward Texas International) challenged the commission'due south conclusion in an Austin district court. At effect was whether Texas travelers were adequately served by existing airlines. The side by side iii years of Kelleher'southward life were absorbed in legal battles that went all the mode to the U.South. Supreme Courtroom. Merely Kelleher'due south future competitors weren't content to fight it out in court. Kelleher afterward showed that executives of Texas International, in a motion designed to scare off Southwest investors, had filed numerous complaints against Southwest with the Civil Aeronautics Board. It is hard to imagine what the complaints were in reference to since Southwest had no pilots, planes, or passengers at the time.

"I have often said that if Braniff and Texas International had left us lone and not been so rotten and muddied and tried to sabotage united states of america every footstep of the way, Southwest Airlines would not exist in business today," says Kelleher. "They were too stupid to realize the psychology of the state of affairs. The more dirty tricks they played, the more resolved I became to beat them."

But by the summer of 1969 almost everyone but Kelleher was losing resolve. Southwest's board of directors was prepare to give up. The original $543,000 was gone, most of it to legal battles, two of which Kelleher had lost. But he believed he could win on appeal and desperately wanted the chance. Kelleher made an offer to the board: if they would proceed going, they wouldn't have to pay him unless he ultimately won. They accepted his challenge. Kelleher worked like a demon, one time going 48 hours straight to prepare for a hearing, then leaving the court to go to a cocktail political party to heighten money for Southwest. Finally, in December 1970 his take a chance paid off. The U.S. Supreme Court declined to hear an appeal by Braniff and Texas International of a instance that Kelleher had won before the Texas Supreme Courtroom. Southwest was set to take off. It had $143 in the depository financial institution and $100,000 in past-due bills—virtually of it owed to Kelleher.

Mr. Inside

For the next few years Kelleher was fabricated Mr. Inside at Southwest Airlines. He was the company's lawyer, spending his time negotiating contracts with Boeing for the purchase of airplanes, writing stock offerings, and raising money. He too served as a mediator betwixt Rollin Male monarch, who became the principal operations officer, and Lamar Muse, a flamboyant airline veteran who came to work as Southwest'due south president. Rex and Muse both had stiff, normally conflicting views near what was best for Southwest Airlines; the effect was a protracted power struggle.

Early on, Muse tried unsuccessfully to remove Rex from the board. Then, over the objections of the board, Muse fabricated his son, Michael, an officeholder of the company. Kelleher tried to make peace betwixt Muse and King but to no avail. In 1978 Muse made another power play. He went to the board and said that either King went or he went. King stayed and the board voted to accept Muse'due south resignation. Kelleher was torn between both men and abstained from the vote.

King thought he would exist named every bit the new president, but the board instead turned to Kelleher. "I was surprised," says Kelleher. "Information technology was not something I sought, but there I was—1 minute Lamar was in charge, and the adjacent infinitesimal I was." King remains a fellow member of the lath. Just as at the Haddon Heights basketball game, Kelleher was drafted to lead his peers.

His human relationship with Muse took a Shakespearean plough in 1981, when Kelleher—who by and so was then totally in command of Southwest Airlines that employees were calling him Southwest's Begetter, Son, and Holy Ghost—found himself in an all-out war with his old friend. Bitter over being kicked out of Southwest, Michael Muse had raised enough money to start a yuppie version of Southwest—Muse Air. He started competing with Southwest in Texas, California, and Florida with sleek blueish-and-white airplanes, meal service, assigned seats, and not-smoking flights. Employees at Southwest had a nickname for Muse Air. They called it "Revenge Air."

But Michael Muse couldn't crevice Southwest's agree, and by 1984 Muse Air was practically bankrupt. Lamar took over the operation and put Muse Air up for sale. Kelleher was fearful that Frank Lorenzo would buy it and use Muse Air's gate positions at Houston Hobby to go later Southwest.

1 day Kelleher telephoned Lamar Muse and suggested a meeting. When Muse walked through the door of Kelleher's townhouse, Kelleher asked, "Lamar, are you more interested in running an airline or going fishing in Vancouver?" Lamar told him he'd rather go fishing. Two hours afterward, Kelleher had agreed to buy Muse Air. The cost came to $76 million.

Not only did Kelleher knock out Muse Air, merely when it was over, Herb, not Michael, had emerged as Lamar'southward good corporate son. Michael never forgave his father for selling his airline, and even at present Michael refuses to speak to him. But Kelleher and Lamar Muse remain friends. "Herb and I have raised a lot of hell together," Muse told me. "He's the best friend anyone ever had and the toughest competitor on earth."

Corporate Culture

At Easter the head of the eleventh-largest airline in the land has been known to fly as the Easter Bunny. On St. Patrick'south Solar day Kelleher has flown equally a leprechaun. On this 24-hour interval he is traveling equally just his zany self. "I just dear these iii-hundreds," Kelleher is saying as we make our way to the rear of the Boeing 737-300, which seats 137 customers, 15 more than the 737-200. Most of the passengers instantly recognize Kelleher from the company'due south advertising campaigns. They recollect the advertizement in which Herb is locked out of a Southwest airplane because he talks likewise long almost the airline'due south on-time record. Equally he distributes peanuts on the flight from Dallas to Houston, the passengers respond to Kelleher with an exuberance usually reserved for one-time high schoolhouse buddies. "Would y'all care for peanuts? I grow them in my basement," Kelleher says to a beer-drinking man of affairs from Lubbock. "Herb," says the businessman, "I gotta tell you. You're the ugliest flying attendant I've always laid eyes on." The entire rear of the plane finds the scene uproarious.

That kind of behavior is woven into the life of Southwest Airlines. More than beingness just a business, information technology approaches being a cult, with 6,500 employees for members. The employees ain ten pct of the airline, and ownership begets loyalty. Each new employee is shown the Southwest Shuffle videotape, which describes the workings of each department—from the baggage handlers to the pilots to the secretarial puddle—in rap. (This one is sung by the mechanics: "When you need spare parts to put on the plane/We get the right ones/And we order it once again.") Every Friday at noon, the employees in Dallas gather in the parking lot at their headquarters for a cookout. Well-nigh companies this size frown on nepotism. Not Southwest. "Nosotros've got as many equally six members of the same family working for usa," says Kelleher. "Why, some of our employees have been married to one employee, divorced, and married to two, maybe three others." (Since the Michael Muse experience, though, there is an anti-nepotism rule amongst the company's seventeen officers.) Kelleher's list of employees is updated constantly, and he tries to know the names of all of them. They call him Herb or Herbie, but never Mr. Kelleher. On Blackness Wednesday—the day before Thanksgiving and traditionally the busiest day of the yr for airlines—Herb works in the baggage section at Love Field, loading and unloading customer bags.

His management style is fiercely anti-hierarchical. Each week about two hundred letters arrive from passengers, and Kelleher or Colleen Barrett, the vice president for administration, reads every one of them. Barrett is Kelleher'due south alter ego. Together, Herb and Colleen—as all the employees refer to them—run Southwest Airlines. If there'south a problem, Herb and Colleen pull together a group of employees and talk until a solution emerges.

Barrett, a friendly, no-nonsense woman of 43, has worked for Kelleher since 1968, when he was a lawyer in San Antonio and she became his secretarial assistant. Her outset duty was to set upwards a filing system; Kelleher had ten years' worth of cases piled on and around his desk. Barrett still performs some secretarial duties, though she is clearly an executive as well. Kelleher calls her his "beeper" because she does her best to move him from meeting to meeting. They unapologetic workaholics who put in jammed days and and then go domicile to more work in neighboring townhouses. "Colleen gives me all the freedom and latitude of a prisoner in a North Korean prison camp," he says.

All of the primary aspects of Kelleher'south personality—his obsessiveness, his slap-happiness, his combativeness—are not merely present within the culture of Southwest Airlines, they are celebrated there. No one gets angry at Kelleher for being late, because no one expects him to be on time (which, notwithstanding, does not hold true for his airplanes—

Southwest has i of the best on-fourth dimension records in the manufacture). His girl Ruth says her father takes pranks and games so seriously that one night they played a form of tag until ii a.m. Finally, she fell into her bed exhausted and was in a hazy slumber when she felt her father lightly bear on her big toe. "Gotcha," he said, chuckling off to bed.

Kelleher'due south daily schedule is crammed with duties that nurture the organization he has created. Every month he personally easily out Winning Spirit awards to employees who were selected past fellow workers for exemplary functioning. In Dec he gathered thirteen honor-winners in a conference room for the company ritual. In that location sabbatum muscular Vincent Lujan, an Albuquerque ramp agent. While cleaning an airplane, Lujan establish a purse containing $800 and several credit cards. He turned it over to his supervisor, who institute the owner. That act of honesty won him companywide recognition. Lujan received two free airline tickets and a bear hug from Kelleher. Cindy Burgess, a Dallas flight attendant, earned the same treatment for befriending Kisha, an eighteen-month-old girl who was en route from Amarillo to Dallas for a kidney transplant. Since Kisha had been hospitalized in Dallas, Burgess had run errands for her parents, including washing and ironing their dress. Kelleher's voice swelled with emotion as he described how Burgess had hired a babe-sitter to look after her own two children then she could help Kisha. Kelleher was the head of the clan, gathering his favorite few. The more than heartrending the story, the ameliorate he liked it.

Southwest'south culture is constantly existence refined. The force per unit area to behave like other airlines is enormous; Kelleher fights it at all costs. In a monthly meeting with dispatchers, who supervise the routings of the airplanes, Kelleher says that he has received several letters from passengers who complain that when they telephone call ahead, they receive inaccurate information nearly their flights. The dispatchers tell him that the solution is to invest in a computerized system at a cost of $100,000 per plane that would give dispatchers upwardly-to-the-minute flight information. It is standard at major carriers. Kelleher thinks information technology'south not essential and therefore non worth the expense; he likes keeping Southwest low tech.

One of his basic premises is that Southwest must stay on the offensive At a senior-management group coming together, Kelleher hears a agonizing report: If a proposed new noise rule goes into effect in San Diego, Southwest won't be able to comply. He turns stern and serious. "I'1000 willing to sue," he tells his managers. "The carriers who aren't opposing it are doing a real disservice. This is the kind of thing that spreads and makes it impossible to do business organisation. Sue 'em."

The only fourth dimension Kelleher has run into problem was when he purchased Muse Air, which he renamed TranStar. The competitive side of him wanted TranStar, and information technology made practiced sense for him to block Lorenzo from purchasing it. But TranStar offered meals long-haul routes, and connections with other airlines. It stood in perfect juxtaposition to Southwest. He tried to sole the trouble past running the ii airlines every bit totally separate operations, just external and internal pressures proved to be also keen.

Externally, he was in a fare war with Lorenzo, who slashed one-way fares between Los Angeles and Houston to $79 to keep TranStar from making inroads at Hobby. Internally, employees from TranStar and Southwest were at odds. Nowhere was the anger more apparent than amidst the pilots. Southwest pilots believed that their job security was threatened past TranStar'southward lower wages.

One solar day, Kelleher faced the Southwest pilots across the bargaining table. He could not empathize why they were worried. Only the pilots viewed the $76 million he had spent to purchase Muse Air as coin that could have upgraded Southwest'southward fleet and the pay scales of Southwest's pilots. To protect their own seniority, the Southwest pilot'due south union wanted to correspond the Muse Air pilots. When Kelleher insisted on keeping the 2 piece of work forces separate, ane of the pilots looked Kelleher in the eye and said, "This is merely the low-down, cutthroat kind of affair Frank Lorenzo would do to his employees." Kelleher's image of himself was violated. He flew into a rage and broke off negotiations for weeks. The agreement they eventually reached was rejected past TranStar pilots because it put them near the bottom of Southwest'due south seniority system and offered limited job security. When Kelleher refused to negotiate direct with the TranStar pilots, a few fifty-fifty put bumper stickers on their cars that said: "Will Rogers never met Herb Kelleher."

On Baronial nine, 1987, Kelleher implicitly declared defeat. He airtight down TranStar and sold many of the airplanes to Lorenzo. The TranStar experience was a costly one. That yr Southwest made merely $20 million, a sixty percent drop from 1986. Even more than being a fiscal bleed, the purchase was an egregious example of Kelleher going against his own strengths and the philosophy of the airline. Merely wallowing in what went incorrect is non role of Southwest'due south civilization. Fifty-fifty now Kelleher prefers to encounter it equally a good try, not a mistake. "If things had turned out differently," he says, "nosotros would have had a hell of a foothold on the long-booty market out of Hobby.

Keep Moving

In belatedly 1978 Kelleher called a coming together of his senior officers and told them Southwest Airlines could not just settle back and rely on Texas business commuters as a cash cow. Like a jet airplane, Herb Kelleher and his airline need to go along moving. "Nosotros had run our string in Texas. Our growth was stymied," Kelleher recalls. Indeed, Southwest was too dependent on the Texas economy. At one time 50 percent of the airline's revenues flowed from the Dallas-Houston route. Southwest needed to diversify geographically. The senior officers were reluctant to venture as well far out of Texas. "It was well-nigh a mystical thing," explains Kelleher. "It'due south like nosotros were scared of the outside earth." But Kelleher'south fears were exactly the opposite—he didn't want to be fenced in. Of grade, Kelleher prevailed. Southwest started service to New Orleans, Oklahoma City, Tulsa, San Francisco, St. Louis, Chicago, and Detroit. Given the driblet in oil prices and real manor values, it's a good thing Kelleher did not sit back and count on Texans to provide him with a sinecure. Today just iv to 6 percent of the airline'southward revenues are derived from Dallas-Houston travelers.

Function of Southwest's problem was that it could not expand from its base at Love Field. In early 1979 then House majority leader Jim Wright of Fort Worth, in an effort to protect the hub condition of DFW airport, tried to ban all interstate traffic out of Love Field. Kelleher flew to Washington for a iii-month battle, mustering all of his political skills and personal connections to fight 1 of the most powerful men in Washington. Kelleher quickly ceded Wright the House side and concentrated his efforts on the Senate, where an old buddy from constabulary school, Oregon senator Bob Packwood, tied up every piece of aviation legislation until Wright agreed to compromise. The compromise, known as the Wright Amendment, gives Southwest the right to wing out of Beloved Field to the iv states bordering Texas.

What the Wright Amendment ways is that Southwest passengers can't fly straight from Love Field to Los Angeles; they have to buy a ticket for each leg of the journeying. Moreover, their bags can't fly direct either only must be removed from the airplane and reloaded at every hop. The amendment fifty-fifty prohibits Southwest from ad its Los Angeles flights in the Dallas expanse.

Financial analysts and the large carriers regard the Wright Amendment as a boon to Southwest since information technology is the lone carrier out of Dearest. Kelleher doesn't. "If other carriers think information technology'south and so great, let them come into Love and live with it," he says. Why doesn't he do what he'southward good at—challenge the amendment in court? "Because I told Jim Wright I wouldn't when I sat down in his role and we wrote the compromise," he says.

Unable to expand any further out of Love Field, Kelleher began looking for a new base of expansion and settled on Phoenix. Since 1984, Kelleher has doubled Southwest'southward daily departures from Phoenix Heaven Harbor International Airport, and he is at present in a head-to-head battle with America Due west, which is based in Phoenix and has the largest share of the market. Southwest operates out of dingy xl-year-old Concluding 1, and then old fashioned that passengers accept to walk outside to go from one gate to another. Far from being ashamed of the facility, Kelleher launched an advertizement entrada, bragging that Concluding 1 is more user-friendly to parking areas. Meanwhile, America West holds forth in modernistic, fortresslike Terminal Three. Southwest won't remain in Terminal One forever. Over the strong objection of America West, Kelleher won an 8­–0 victory before the Phoenix City Quango in December for access to sixteen gates at the aerodrome'south fourth terminal, which will exist completed in 1990. Past then, Kelleher expects Phoenix to be Southwest's busiest city.

Last Nov Kelleher went on an all-out raid in the Phoenix area by slashing fares and aggressively advertising Southwest's on-time record. America Due west'due south chief executive, Ed Beauvais, matched Kelleher fare cut for fare cut. At present both airlines are offering $19 one-manner tickets from Phoenix to Los Angeles, San Diego, and Las Vegas. Some analysts believe that Kelleher may be non simply later on the Phoenix market place but out to have over America West as well. Beauvais expanded rapidly, and in 1987 showed a loss of $45.seven million, but he quickly moved to cutting flights and personnel and is managing to hang on.

Kelleher's heaviest arms in Phoenix is the same as it is in Texas—his personality. Recently he appeared on Phoenix television stations with a brown-paper bag over his head. He was identified every bit the Unknown Flyer. The thirty-second advertizing was in response to America West'due south charge that Southwest passengers are embarrassed to fly such a no-frills airline with "plain" planes. "If you're embarrassed to fly the airline with the most convenient schedules to the cities it serves, Southwest will requite you lot this bag," says the Unknown Flyer. He then offers the bag to the passengers who are embarrassed to wing the airline with the fewest customer complaints in the country. Kelleher and then lifts the pocketbook from his caput and offers to give the bag to anyone who flies Southwest "for all the money y'all'll save flying with u.s.a.." The concluding scene shows Kelleher in a shower of coin, grinning at the camera.

Such antics are a regular function of his 24-hour interval. When Kelleher painted one of his 737-300's to look similar Sea Earth'due south killer whale and christened the airplane Shamu One, he got a telephone call from American Airlines' Crandall, who congratulated him for the marketing gimmick. "Just one question," asked Crandall. "What are you going to practice with all the whale shit?" In a nanosecond Kelleher replied, "I'thou going to turn it into chocolate mousse and spoon-feed it to Yankees from Rhode Island." The following Monday, Crandall, a Yankee from Rhode Island, received a large tub filled with chocolate mousse with a Shamu spoon stuck poetically in the center.

Like Shamu, the company icon, Kelleher may exist a showboat, only his bones instincts are those of a killer. The lesson of the Phoenix war is that in the era of deregulation, it's attack or perish. Contest and mergers have wiped out the smaller, weaker airlines. The moment America W showed a loss, it became a target for conquering. Kelleher believes the reason no airline has tried to take over Southwest is its strong balance sheet. Says Kelleher in killer-whale fashion, "The way to avoid a takeover is to go on moving and stay strong."

Kelleher says he feels like he's been in the Twilight Zone: Before deregulation in 1978, the top ten carriers transported 90 pct of all passengers; in the ten years after deregulation, the same thing is still true. Nonetheless, Kelleher is still an abet of deregulation. It was Southwest's early on record of low fares and getting high investment returns that helped convince the U.South. Congress that deregulation of the industry would do good passengers. Simply deep fare cuts that are endemic to airline warfare make shareholders nervous. I evening he was lament well-nigh the fare wars over dinner with his daughter Ruth, who looked at him and said, "Stop whining, Dad. You started this."

Kelleher believes that what needs revamping are the facilities that make air travel possible. Since deregulation, traffic has nearly doubled, from 243 million passengers annually to 468 million, but a major airport hasn't been congenital since DFW, 15 years ago. Now he's lobbying Congress to build more airports, runways, and traffic-control systems. The main reason Kelleher is not expanding to the Due east Coast is that air traffic is too congested; he tin can't plough his planes around fast plenty.

Of course, the question not only for Southwest stockholders but for Texas travelers is, What's next for Herb Kelleher? Once, Kelleher fancied a career in politics; when he lived in San Antonio, he gave serious consideration to running for the Texas Senate. Lamar Muse believes to this day that Kelleher will succeed Lloyd Bentsen in the U.S. Senate. "Herb is, by nature, a political animal," Muse says. In pursuing the primary goal of the airline concern—shareholder profits—Kelleher has likewise used the airline to engage in the larger pleasures of war and politics.

Likewise, since Southwest Airlines is an extension of Kelleher, he is not prepared to imagine it without him. "The history of Southwest Airlines is however unfolding," says Kelleher. "I'm not finished yet." The lath of directors is concerned that a human who smokes v packs of cigarettes a day has not identified a clear successor. Employees wander the halls of the headquarters, wondering what would happen to them and their airline if Kelleher dropped expressionless of a heart assault. When Roy Spence, the president of Austin-based GSD&Thousand, Southwest's advertising bureau, was asked what would happen to the airline if Herb died today, Spence became slack-jawed. He took a few seconds to call up nearly it and then said, with a directly face up, "Herb ain't never going to dice."

Certainly he shows no signs of slowing down. During a rollicking Christmas office party, a group of employees performed their ain parody of the "Twelve Days of Christmas," satirizing various aspects of life at Southwest Airlines. "On the kickoff mean solar day of Christmas Herbie gave to me a Jaguar and a large raise," sang the employees. Kelleher sat at the front table, happily presiding over the pandemonium. His mood improved with each passing poetry, as employees petitioned him for no more mistagged numberless, no more frequent-flier double credits, no more Fun Fares, and every Friday off. When he rose to answer, Kelleher congratulated them with a revealing remark. "My worst fear," he told them, "is that i day Southwest Airlines will grow quondam and stuffy."

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Source: https://www.texasmonthly.com/news-politics/a-boy-and-his-airline/

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