Early in the new year, the aviation industry lost one of its brightest and most eccentric stars. Herb Kelleher, the ostentatious and larger-than-life former CEO of Southwest Airlines, died at the age of 87.
Kelleher was perhaps more than any other man responsible for democratizing air travel and bringing a Texas-sized personality of fun and audacity to the skies. Kelleher started in the early 1970s as Southwest Airlines’ attorney, while the company spent its first five years of its existence fighting the aviation cartel of the four established airlines and the Civil Aeronautics Board. The board regulated the airline industry in such a way that the four incumbent airlines had effective veto power over routes, prices, and the entrance of any new competitors.
By way of Reason’s Matt Welch, Kelleher argued that the government’s “thesis was that if a new airline was gonna take one passenger — one, that’s what they said — one passenger away from an existing airline, it can’t be certificated.” Kelleher bemoaned the fact that “the existing airlines had 90 percent of all the revenue passenger miles in 1938, and also had 90 percent of all the revenue passenger miles in 1978, at the time of deregulation.” This state of affairs, thanks in large measure to his fight against the airline cartel, was not long for this world.
Southwest’s early investors spent a fortune fighting the board in court, and Kelleher, famously, promised to pay the remainder out of his own pocket if they lost the case in the Texas Supreme Court. Southwest won, of course, and Kelleher quickly ascended to the position of CEO of the company. Southwest started as a regional flyer inside the borders of the great state of Texas, where it was shielded from much of the onerous interstate regulation promulgated by the Civil Aeronautics Board. With the deregulation of the airline industry in the late 1970s, Southwest raced into new markets and the company’s growth exploded. By the mid-1990s, Southwest was a top domestic carrier with a brand-new headquarters in Dallas and hundreds of flights across the country each day.
Kelleher was eccentric, and he was dramatic, but he was also an entrepreneurial genius who stood fast for what he thought was right, and we are all the better for it. In a time when the major airlines eschewed smaller, regional airports, Kelleher fought to keep Dallas Love Field as a major Southwest hub, even as the Wright Amendment prohibited travel from Love Field to anywhere not within the state of Texas or the four neighboring states of Louisiana, Arkansas, Oklahoma, and New Mexico. The amendment was the product of Fort Worth-based U.S. Representative Jim Wright, enacted under the auspices of protecting the market share of Dallas/Fort Worth Airport (DFW). But Kelleher didn’t care; in the face of such blatant crony capitalism and government favoritism, Southwest continued to operate out of Love Field on through when the amendment was finally repealed in 2014.
Kelleher also helped introduce many air travel innovations, such as variably pricing the same route, allowing the market to better sort air travelers across time and helping to dramatically lower the average cost of each flight and enable lower fares across the board. Kelleher further slashed costs by getting Southwest out of the business of serving meals, and establishing a friendly, warm, relaxed atmosphere that contrasted sharply with the stodgy and veritably bourgeois zeitgeist of the established airline cartel. He was the only CEO to lobby against post-9/11 bailout money for the airline industry, and he fought an “arm wrestling duel,” cigarette in tow, with the CEO of Stevens Aviation, for the rights to the slogan “Just Plane Smart.”
In total, Kelleher was a man with a vision of treating his employees like family and extending that family to encompass customers of all economic and social backgrounds. He democratized the skies, and it is in no small part because of him that “you are now free to move about the country.”
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