Southwest Airlines Co. (NYSE: LUV) is an American low-cost airline based in Dallas, Texas. Southwest is the largest airline in the United States, based upon domestic passengers carried, as of June 30, 2010[update].[2] Southwest operates more than 3,400 flights a day, as of March 2011[update], utilizing a fleet of 552 aircraft.[3][4]
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Southwest Airlines traces its roots to the March 15, 1967 incorporation of Air Southwest Co. by Rollin King and Herb Kelleher to provide service within the state of Texas.[5][6]
Kelleher believed that by providing intrastate service within Texas, the airline could avoid federal regulation.[7] Three incumbent airlines, Braniff, Trans-Texas, and Continental Airlines, initiated legal action which was not resolved for three years. Air Southwest prevailed in 1970 when the Texas Supreme Court upheld Air Southwest’s right to fly within Texas.[8] The Texas Supreme Court's decision became final on December 7, 1970, when the U.S. Supreme Court declined to review the case without comment.[9]
The story of Southwest’s legal fight was turned into a children’s book, Gumwrappers and Goggles by Winifred Barnum in 1983. In the story, TJ Love, a small jet, is taken to court by two larger jets to keep him from their hangar and to stop him from flying. In court, TJ Love’s right to fly is upheld after an impassioned plea from a character referred to as "The Lawyer". While no company names are mentioned in the book, TJ Love’s colors are those of Southwest Airlines, and the two other jets are colored in Braniff and Continental’s colors. The Lawyer is designed to resemble Herb Kelleher. The book was adapted into a stage musical, Show Your Spirit, sponsored by Southwest Airlines, and played only in city towns serviced by the airline.[10]
On March 29, 1971, Air Southwest Co. changed its name to Southwest Airlines Co.[6] Operating from its Dallas, Texas, headquarters, Southwest Airlines began customer service on June 18, 1971, offering service to the Texas cities of Houston, Dallas and San Antonio using three Boeing 737 aircraft.[4]
Southwest Airlines founder Herb Kelleher studied California-based Pacific Southwest Airlines extensively, and used many of the airline’s ideas to form the corporate culture at Southwest. Early flights used the same "Long Legs And Short Nights" theme for stewardesses on board typical Southwest Airlines flights. A committee of individuals, including the same person who had selected hostesses for Hugh Hefner's Playboy jet, selected the original flight attendants for Southwest Airlines. The selection resulted in a group of female flight attendants who were described as long-legged dancers, majorettes, and cheerleaders with "unique personalities". Southwest Airlines and Herb Kelleher proceeded to dress these individuals in hot pants and go-go boots.[11]
The rest of 1971 and 1972 saw operating losses. One of the four aircraft was sold to Frontier Airlines and the proceeds used to make payroll and cover other expenses. Southwest continued to operate a schedule predicated on four aircraft but using only three, and in so doing the "ten minute turn" was born, and was the standard ground time for many years.[12]
The Wright Amendment of 1979 is a federal law governing traffic at Dallas Love Field, an airport in Dallas, Texas. It originally limited most nonstop flights to destinations within Texas and neighboring states. The limits began phasing out in 1997 and 2005. In 2006, the amendment was repealed leaving some restrictions intact until 2014 but with an added restriction on the number of gates allowed.[13]
When airline deregulation came in 1978, Southwest began planning to offer interstate service from Love Field. This caused a number of interest groups affiliated with Dallas-Ft. Worth Airport, including the city of Fort Worth, to push the Wright Amendment through Congress to restrict such flights.[14] Under the restrictions of the amendment, Southwest, and all other airlines, were barred from operating, or even ticketing passengers on flights from Love Field to destinations beyond the states immediately surrounding Texas. In effect, to travel through Love Field, a passenger and luggage would have to deplane and fly on a separate ticket, on a separate aircraft.
The Wright Amendment’s restrictions did not apply to aircraft configured with 56 or fewer seats. In 2000, Legend Airlines attempted to operate long distance business-class flights using older DC-9s with 56 seats, but did not have the resources to survive American Airlines's legal and marketing attacks, and quickly ceased operations. Southwest did not use the 56 seat loophole, even with its market strength at Love Field and the availability of more modern regional jets such as the CRJ-700/900 and the Embraer ERJ 145 family.
Southwest’s efforts to repeal or even alter the Wright Amendment were met with opposition from American Airlines and Dallas Ft. Worth International Airport. Both American Airlines and DFW contended that repeal of the Wright Amendment restrictions would cripple DFW,[15] while Southwest contended that repeal of the Wright Amendment would be beneficial to both Love Field and DFW. Continental Airlines has a successful hub and spoke operation at Houston Bush Intercontinental Airport despite unrestricted competition from Southwest at Houston Hobby Airport.
In 1990 the airline registered its aircraft in Houston so it could pay aircraft taxes in Houston, even though the actual corporate headquarters were in Dallas. Southwest was not physically relocating any assets, but Texas state law allowed the airline to choose either Dallas or Houston as the city of registry of its aircraft.[16]
In 1997, Southwest’s efforts began to pay off with the Shelby Amendment, which added the states of Alabama, Mississippi and Kansas to the list of permissible destination states. Southwest began offering non-stop service between Dallas Love Field and Birmingham, Alabama, which it could not do prior to the enactment of the Shelby Amendment.
In late 2004, Southwest began actively seeking the full repeal of the Wright Amendment restrictions. In late 2005, Missouri was added to the list of permissible destination states via a transportation appropriations bill. New service from Love Field to St. Louis and Kansas City quickly started in December 2005.
At a June 15, 2006 joint press conference held by the city of Dallas, the city of Ft. Worth, Dallas-Ft. Worth Airport, American Airlines, and Southwest Airlines, the said parties announced a tentative agreement on how the Wright Amendment was to be phased out. Both the U.S. Senate and House of Representatives passed Wright-related legislation on September 29, 2006, and it was signed into law by President George W. Bush on October 13, 2006. The new law became effective on October 16, 2006, when the FAA Administrator notified Congress that any new aviation operations occurring as a result of the new law could be accommodated without adverse effect to the airspace.
Southwest started selling tickets under the new law on October 19, 2006. Highlights of the agreement are the immediate elimination of through-ticketing prohibitions, and unrestricted flights to domestic destinations eight years after the legislation takes effect. Because of the agreement, nationwide service became possible for Southwest; the law also defined the maximum number of gates at Love Field. Southwest controls all of the Love Field gates except for four gates controlled by American Airlines, Continental Airlines, and Delta Air Lines. The future of the Legend Airlines terminal for use by commercial airlines is in doubt because of the limit on number of gates.
Southwest remains the dominant passenger airline at Love Field, maintains its headquarters, hangars, training centers, and flight simulators adjacent thereto, and reflects its ties to Love Field in its ticker symbol (LUV).
The President and CEO of Southwest is Gary C. Kelly. Kelly replaced former CEO Jim Parker on July 15, 2004 and assumed the title of "President" on July 15, 2008, replacing former President Colleen Barrett.
Former CEO Jim Parker led Southwest from mid-2001, keeping alive Southwest's unprecedented streak of profitability and guiding its growth as it became the largest commercial carrier in the domestic United States. Jim Parker abruptly quit as CEO and vice chairman for "personal reasons" though it's suspected that he stepped down after failing to reach an agreement with the flight attendant union, TWU Local 556, which made their labor strife (and displeasure with the Southwest CEO) public.
Southwest's CFO is Laura Wright. In July 2007, Herb Kelleher resigned his position as Chairman. Colleen Barrett left her post on the Board of Directors and Corporate Secretary in May 2008 and President in July 2008. Both are still active employees of Southwest Airlines.
Southwest hired its first black pilot, Louis Freeman, in 1980. In 1992, he was named the first black chief pilot of any major U.S. airline.[17]
In contrast to non-union competitor JetBlue Airways, Southwest maintains its profitability and low-fare, low-cost business model while being heavily unionized. The Southwest Airline Pilots' Association, a union not affiliated with the Air Line Pilots Association, represents the airline's pilots.[18] The Aircraft Maintenance Technicians' are represented by the Aircraft Mechanics Fraternal Association (AMFA).[19] Customer Service Agents and Reservation Agents are represented by the International Association of Machinists and Aerospace Workers Union (IAM). Flight Dispatchers, Flight Attendants, Ramp agents and Operations agents are represented by the Transport Workers Union (TWU).
As of May 2011[update] Southwest Airlines has completed four acquisitions which have helped the airline to grow its revenue base and destinations served.
Southwest paid US$60.5 million in stock and cash for Muse Air when Muse was on the verge of collapse in 1985. After completing the acquisition, Southwest renamed MuseAir TranStar Airlines. TranStar became a wholly owned subsidiary of Southwest and operated as an independent airline. Unwilling to compete in a fare war against Frank Lorenzo's Texas Air, Southwest eventually sold TransStar's assets to Lorenzo in August 1987.[20][21]
Southwest acquired Morris Air, a competing airline based in Salt Lake City, Utah, in 1992, paying US$134 million in stock.[22] After completing the purchase, Southwest absorbed the capital and routes of Morris Air into Southwest's inventory and service, including Morris' Pacific Northwest destinations not previously served by Southwest.[23] One founder of Morris Air, David Neeleman, worked with Southwest for a short period before leaving to found JetBlue Airways, a competing airline.[24]
Southwest paid US$7.5 million to acquire certain assets from bankrupt ATA Airlines in 2008. Southwest's primary reason for making the purchase was to acquire the operating certificate and New York LaGuardia Airport landing slots formerly controlled by ATA. While some preferential hiring was indicated at the time of the purchase, the transaction ultimately did not include the purchase of any aircraft, facilities or transfers of employees directly from ATA.[25]
On May 2, 2011 Southwest Airlines completed the acquisition of AirTran Airways by purchasing all of the outstanding common stock, corporate identity and operating assets of AirTran Holdings, Inc. (former stock ticker NYSE:AAI), the former parent company of AirTran Airways. Southwest Airlines first announced the acquisition on September 27, 2010 and received final approval from the United States Department of Justice on April 27, 2011. Southwest Airlines estimates the transaction's value at $3.2 billion and expects one time costs to integrate the two airlines of $500 million, with cost synergies of approximately $400 million annually. The greatest impact on Southwest will likely be the elimination of a direct low-cost competitor, access to Atlanta, and the addition of landing slots in the New York and Washington DC areas. Southwest expects to obtain a single operating certificate from the United States Federal Aviation Administration in the first quarter of 2012, but expects that full integration of AirTran into Southwest's operations may take several years. An entity called Guadeloupe Holdings was formed by Southwest and currently acts as a wholly owned subsidiary of Southwest Airlines and holding company for Airtran's current operations and assets. Southwest's organized labor groups have ceded contractual "scope" provisions pending acceptable negotiated seniority integration agreements. Operations of the two airlines will remain isolated until terms of this integration are fully negotiated (or arbitrated). Bound by federal law, such as McCaskill-Bond legislation, as well as a four-party process agreement, Southwest has confirmed that it will integrate all of the pilots in a fair and equitable manner. Other labor groups will be integrated in accordance with their respective collective bargaining agreements and federal law. Southwest's ground operations have begun handling Airtran's aircraft in Florida stations, and other cross-operational asset handling from the Guadeloupe operations will begin over the coming months by Southwest.[3]
Southwest currently plans to absorb AirTran Airways's smaller low-capacity 88 Boeing 717 aircraft into the Southwest fleet, as well as their comparable Boeing 737 aircraft, and plans to begin changing AirTran liveried aircraft to the Southwest livery beginning in 2012. Airtran's Boeing 737 orders and options will remain in place and those deliveries to the Southwest operation will occur over the coming years. With the proposed integration of the two airlines, the combined fleet could potentially number 690 aircraft.[3]
The purchase potentially expands Southwest's service to 38 additional destinations including Mexico, the Caribbean, and Atlanta, an AirTran hub and the largest U.S. city not served by Southwest. Higher labor rates may prohibit operations in some outlying markets, and thus uncertainty exists as to individual market viability, revenue enhancement, and negotiated labor accords. Model reviews of these markets are ongoing by Southwest.[26] Traditionally averse to hub operations, Southwest Airlines CEO Gary Kelly stated at the time the acquisition closed that Southwest needed to fully understand the airline's operations in Atlanta before making any changes or reductions at that airport. With recent Department of Justice approval, data sharing has begun, and Airtran's operational review by Southwest will be completed in the coming months.[3] On October 10, 2011, USA Today reported that Southwest has announced that it will "unwind" and dismantle the Atlanta airport Airtran hub. The changes will ultimately affect Atlanta's overall daily flight operations up to a 13% loss. Southwest has been quiet about the hub changes until date. Many Airtran smaller market airports/routes may see more limited or eliminated service.[27]
In its attempts to grow revenues through acquisitions, Southwest has not always been successful and has historically demonstrated caution when deals threaten employee morale and culture. Learning from history, Southwest elected to acquire AirTran Airways and combine the two carriers, "Without any labor contingency."
On July 30, 2009, Southwest Airlines announced a $113.6 million bid for bankrupt Frontier Airlines Holdings, the parent company of Frontier Airlines. Southwest planned to initially operate Frontier as a stand-alone carrier, eventually absorbing the airline and replacing Frontier's aircraft with Boeing 737s.[28] Less than one month after submitting its bid, Southwest learned on August 14 that it had lost the initial bidding to Republic Airways Holdings, and elected not to counter or pursue the deal further. Industry experts had expected Southwest to win the initial round of bidding, allowing Southwest to grow its presence in Denver and serve international destinations. Southwest stated that its requirement for pilots' unions at both companies to reach a negotiated (not arbitrated) agreement as a condition of acquisition was a key factor in its abandonment of its bid. Frontiers Airlines quickly recovered from its recent bankruptcy.[29]
In 2008, Southwest contracted with Pratt and Whitney to supply the proprietary Ecopower water pressure-washing system, which allows Southwest to clean grime and contaminants off engine turbine blades while the aircraft is parked at the gate. Frequent use of the Ecopower system is estimated to improve fuel efficiency by about 1.9%.[30][31]
On March 16, 1995, Southwest became one of the first airlines to have a website. Originally called the "Southwest Airlines Home Gate", passengers could view schedules, a route map, and company information at Iflyswa.com.[32] Southwest.com is the number one airline website for online revenue, according to PhoCusWright. Nielsen/Netratings also reports that Southwest.com is the largest airline site in terms of unique visitors.[4] In 2006, 70 percent of flight bookings and 73 percent of revenue was generated from bookings on southwest.com. As of June 2007[update], 69 percent of Southwest passengers checked in for their flights online or at a kiosk.[4]
On March 6, 2008, Federal Aviation Administration (FAA) inspectors submitted documents to the United States Congress, alleging that Southwest allowed 117 of its aircraft to fly carrying passengers despite the fact that the planes were "not airworthy" according to air safety investigators.[33] In some cases the planes were allowed to fly for up to 30 months after the inspection deadlines had passed, rendering them unfit to fly. Records indicate that thousands of passengers were flown on aircraft deemed unsafe by federal standards. Southwest declined comment at the time, and US Representative James Oberstar advised a hearing would be held.[33][34]
On March 12, 2008, Southwest Airlines voluntarily grounded 44 planes to check if they needed further inspection. The FAA claimed that Southwest Airlines flew almost 60,000 flights without fuselage inspection. Southwest Airlines faced a $10.2 million fine if they violated FAA regulations. There have also been rumors that the FAA knew about Southwest Airlines violations but decided not to fine the airline because it would disrupt the service of Southwest.[35]
On March 2, 2009, Southwest settled these claims, agreeing to pay the FAA fines of $7.5 million for these safety and maintenance issues. The original fine of $10.2 million – a sum which would have been the largest fine in the agency’s history – was lowered after a year of negotiations. The FAA gave Southwest two years in which to pay the fine.[36]
On August 26, 2009 the FAA investigated Southwest for installing improper parts on about 10% of its jets. The work was performed by an outside maintenance company. The FAA stated that the parts do not present a safety danger, but the airline was given until December 24, 2009 to replace the parts with those approved by the FAA.[37] The FAA is still determining whether it will fine Southwest or its vendor.[38]
The Southwest Airlines headquarters are located on the grounds of Dallas Love Field in the Love Field neighborhood of Dallas, Texas.[4][39]
Previously the airline was headquartered in the 1820 Regal Row building in Dallas, by Love Field.[40] Southwest moved into its current headquarters in 1990. At that time the headquarters had 256,000 square feet (23,800 m2) of space and approximately 650 employees.[41] The current headquarters facility was built at a cost of $15 million in 1990 dollars.[42] In early 1995 the building received an additional 60,000 square feet (5,600 m2) of space. As of 2006[update] about 1,400 employees worked in the three story building.[41]
In March 1996,[43] the airline announced that it would begin to build a 300,000 square feet (28,000 m2) addition to the existing corporate headquarters at a cost of $30 million in 1996 dollars.[44] This occurred after, on Wednesday March 13, 1996, the Dallas City Council unanimously voted to allow for the construction.[45] The airline leased two additional tracts of land, a total of 10 acres (4.0 ha) of space, from the City of Dallas to build a new pilot training facility, a headquarters expansion, and additional parking spaces. A $9.8 million new pilot training facility was built on a 5 acres (2.0 ha) plot of land owned by the city of Dallas; it was scheduled to be completed Spring 1997. With the new pilot training facility built, the old one would be removed and the company would expand its headquarters building to the north. 120,000 square feet (11,000 m2) of building space, which had a price of $16 million including fixtures, was built, making the headquarters have a total of 436,000 square feet (40,500 m2). The airline also leased 4.8 acres (1.9 ha) from the city of Dallas to build additional parking; 700 spaces were added to the existing 1,200. After the facilities announced in 1996 were added, Southwest had a total leasehold of about 24 acres (9.7 ha) of land, including its headquarters, training facilities, and parking. By the end of 1997 the expansion of the facilities at Love Field and several terminal improvements were expected to cost Southwest $47 million.[41]
Southwest Airlines has gained a reputation for "outside the box thinking" and proactive risk management, including the use of fuel hedging to insulate against fuel price fluctuation. Some analysts have argued against the style of profit-motivated energy trading Southwest did between 1999 and the early 2000s. They suggested that rather than hedging business risk (such as a hedge on weather to a farmer), Southwest was simply speculating on energy prices, without a formal rationale for doing so.[46]
At present, Southwest has enjoyed much positive press (and a strong financial boost) from its energy trading skills.[47][48][49] However, while most analysts agree that volatility hedges can be beneficial,[46] speculative hedges are not widely supported as a continuing strategy for profits.[50]
In the third quarter of 2008, Southwest recorded its first loss in 17 years due to its fuel-hedging contracts being of lesser value because of the drop in oil prices.[51]
The company has employed humor in its advertising. Slogans include "Just Plane Smart", "The Somebody Else Up There Who Loves You" and "THE Low Fare Airline". The airline's current slogan is "Grab your bag, It's On!". A select history of print and video ads are available on the company website.[52]
Shortly after Southwest started using the "Just Plane Smart" motto, Stevens Aviation, who had been using "Plane Smart" for their motto, threatened a trademark lawsuit.[53]
Instead of a lawsuit, the CEOs for both companies staged an arm wrestling match. Held at the now demolished Dallas Sportatorium (the famed wrestling facility) and set for two out of three rounds, the loser of each round was to pay $5,000 to the charity of their choice, with the winner gaining the use of the trademarked phrase. A promotional video was created showing the CEOs "training" for the bout (with CEO Herb Kelleher being helped up during a sit up where a cigarette and glass of whiskey (Wild Turkey 101) was waiting) and distributed among the employees and as a video press release along with the video of the match itself. Herb Kelleher lost the match for Southwest, with Stevens Aviation winning the rights to the phrase. Kurt Herwald, CEO of Stevens Aviation, immediately granted the use of "Just Plane Smart" to Southwest Airlines. The net result was both companies having use of the trademark, $15,000 going to charity and good publicity for both companies.[54]
Southwest's 2008 report that expounds on the company's commitment to the environment and reports on the airline's corporate responsibility and citizenship efforts pertaining to People, Planet, Communities, and Suppliers. Southwest Cares
Southwest has been a major inspiration to other low-cost carriers, and its business model has been repeated many times around the world. The competitive strategy combines high level of employee and aircraft productivity with low unit costs by reducing aircraft turn around time particularly at the gate.[55] Europe's EasyJet and Ryanair are two of the best known airlines to follow Southwest's business strategy in that continent. Other airlines with a business model based on Southwest's system include Canada's WestJet, Malaysia's AirAsia (the first and biggest LCC in Asia), Qantas's Jetstar (although Jetstar now operates two aircraft types), Philippines's Cebu Pacific, Thailand's Nok Air, Mexico's Volaris and Turkey's Pegasus Airlines. Although Southwest has been a major inspiration to many other airlines, including Ryanair, AirAsia and Jetstar, the management strategies, for example, of Ryanair, AirAsia and Jetstar differ significantly from those of Southwest.[55] All these different management strategies can be seen as means of differentiation from other competitors in order to gain competitive advantages.[56]
Southwest has fought against the development of a high-speed rail system in Texas. Southwest Airlines also tried advertising for non-stop services with Texas for $18 each way, but it was not approved by any of the United States Amendments.[57][58]
By 1979, Southwest flew to all of the following cities in Texas: El Paso, Amarillo, Corpus Christi, Harlingen, Lubbock, and Midland/Odessa. Interstate service began to New Orleans in 1979, and Albuquerque in 1980. Oklahoma City and Tulsa were added shortly thereafter. In 1981 Southwest co-launched the 737–300 with USAir. In 1982, the first expansion beyond the Southcentral U.S. took Southwest to the West Coast, adding Phoenix, Las Vegas and San Diego. In late 1984, the 737–300 was placed into service. Chicago Midway and St. Louis service began in March 1985, spreading to Midwest markets.[64]
As of January 2012[update], Southwest Airlines operates scheduled service to 72 destinations in 37 states, the newest being Newark Liberty International Airport on March 27, 2011.
Southwest does not use the more traditional "hub and spoke" flight routing system of most other major airlines, preferring instead the "Point to Point" system. Currently, Southwest serves 71 cities in 36 states, with more than 3,300 flights a day. It has notably large operations in certain airports. Airports with large Southwest operations include Albany (ALB), Albuquerque (ABQ), Austin (AUS), Baltimore (BWI), Nashville (BNA), Chicago (MDW), Dallas (DAL), Denver (DEN), Houston (HOU), Las Vegas (LAS), Los Angeles (LAX), Oakland (OAK), Orlando (MCO), Phoenix (PHX), San Diego (SAN), San Jose (SJC), Sacramento (SMF), Salt Lake City (SLC), and Tampa (TPA). An average of 80 percent of Southwest passengers are local passengers, meaning only 20 percent of all passengers are connecting passengers. This is significantly higher than most airlines, where passengers often connect in hub cities.[65]
As part of its effort to control costs, Southwest tries to use secondary airports which generally have lower costs and may be more convenient to travelers than the major airports to the same destinations. For example, Southwest flies to Chicago Midway Airport (MDW) in Chicago instead of O'Hare International Airport (ORD), Fort Lauderdale-Hollywood International Airport (FLL) and Palm Beach International Airport (PBI) in South Florida instead of Miami International Airport (MIA), Dallas Love Field Airport (DAL) in Dallas instead of Dallas-Fort Worth International Airport (DFW), Long Island MacArthur Islip Airport (ISP) & New York-LaGuardia (LGA) instead of New York-John F. Kennedy Airport (JFK) and Houston Hobby Airport (HOU) in Houston instead of George Bush Intercontinental Airport (IAH).
Southwest makes exceptions to its practice of serving secondary airports by flying into some larger airports in major cities, such as McCarran International Airport in Las Vegas, Phoenix Sky Harbor International Airport, Lambert St. Louis International Airport, Orlando International Airport, Minneapolis−Saint Paul International Airport, Detroit Metropolitan Wayne County Airport, Philadelphia International, Denver International Airport, Cleveland Hopkins International Airport, Kansas City International Airport, Seattle-Tacoma International, Raleigh-Durham International Airport, Bradley International Airport (Hartford, CT), Tampa International Airport and Pittsburgh International. In the Baltimore-Washington market, Southwest has limited flights into one major airport (Washington Dulles International Airport) while maintaining their east-coast focus city at the region's other major airport, Baltimore-Washington International Airport (BWI). In the Los Angeles market Southwest flies to both the major city airport, Los Angeles International (LAX), and to three of the four secondary airports, Burbank-Bob Hope Airport, Santa Ana-John Wayne Airport, and LA/Ontario International Airport. With the restoration of service out of San Francisco International Airport on August 26, 2007, Southwest now serves all three airports in the San Francisco Bay Area; the other two being Oakland International Airport and San Jose International Airport.
The airline also once served Stapleton International Airport in Denver but withdrew in 1986 because of excessive ATC delays during poor weather exacerbated by minimal separation between the runways. Southwest returned to Denver in 2006 with service to the new Denver International Airport. Southwest is expanding Denver service faster than any previous Southwest destination[66] at the cost of service to Orlando, Kansas City and Baltimore.[67]
During November 2008, Southwest applied to purchase 14 slots (for 7 roundtrips daily) previously used by ATA Airlines at LaGuardia Airport.[68] The bid was approved about a month later, and further progress was made during late March 2009. In early April, it was announced that the airline will (strategically) have a combined total of 16 daily arrivals and departures (5 and 3 each way with MDW and BWI respectively), despite the receipt of only 14 slots.[69] On June 28, 2009, Southwest successfully started serving LaGuardia Airport and the airline is confident about future growth at LGA, including expanded service to other locations.;[70][71]
On February 19, 2009, Southwest announced service to Boston's Logan airport would begin the fall of 2009 .[72] Service began August 16, 2009, with five daily roundtrips to both Baltimore-Washington and Chicago Midway.[73] Southwest says that it is complementing their service to Manchester, New Hampshire, and Providence, Rhode Island. As reported by the Boston Herald earlier this year, there is a two-gate operation with an additional 2 gates as options at Logan.[74] Southwest is hoping to curve toward business travelers that stay in downtown Boston and bring lower ticket cost and fees to these travelers.[75]
In October 2009, the airline announced service to Northwest Florida Beaches International Airport near Panama City, Florida, with service to Baltimore-Washington, Orlando International, Houston-Hobby, and Nashville International. Service began on May 24, 2010.[76]
In August 2011 Southwest announced service to Atlanta, to begin in February 2012
As of December 9, 2011[update][77]
| City | Daily departures | Number of gates | Cities served nonstop | Service began |
|---|---|---|---|---|
| Chicago-Midway | 236 | 29 | 55 | 1985 |
| Las Vegas | 228 | 19 | 55 | 1982 |
| Baltimore-Washington | 189 | 26 | 49 | 1993 |
| Phoenix | 185 | 24 | 49 | 1982 |
| Denver | 148 | 17 | 42 | 2006 |
| Houston-Hobby | 133 | 17 | 33 | 1971 |
| Dallas-Love | 130 | 15 | 15 | 1971 |
| Los Angeles | 114 | 11 | 21 | 1982 |
| Oakland | 107 | 13 | 19 | 1989 |
| Orlando | 101 | 12 | 33 | 1996 |
On May 11, 2010, Southwest announced plans to begin serving both Greenville-Spartanburg International (GSP) and Charleston International (CHS) airports in South Carolina. The airline started flights to and from South Carolina on March 13, 2011. Both airports have nonstop service to and from Baltimore-Washington, Chicago-Midway, Houston-Hobby, and Nashville International, with GSP also having nonstop service to and from Orlando International.[78]
On August 27, 2010, Southwest announced that it was to receive 36 slots at Newark Liberty in a divestiture from Continental Airlines, due to a United States Department of Justice ruling as a result of the merger of Continental and UAL Corporation.[79] On October 28, 2010, Southwest announced it would begin serving Newark on March 27, 2011. The flights first began with six daily nonstops to Chicago-Midway and two daily nonstops to Lambert-St. Louis International Airport. Additionally, on June 5, 2011, Southwest added ten more nonstops from Newark, with three each to Baltimore-Washington and Denver, and two each to Houston-Hobby and Phoenix.[80]
On August 22, 2011, Southwest announced it would begin service to Hartsfield-Jackson Atlanta International Airport in Atlanta, Georgia on February 12, 2012. Initially Southwest plans to serve a total 15 daily departures from Atlanta to Chicago-Midway, Baltimore, Houston-Hobby, Denver and Austin. Then to Phoenix and Las Vegas on March 10, 2012.[81]
On June 20, 2011, Cincinnati-Northern Kentucky International Airport (CVG) announced a plan to re-open Concourse A and close its small 8-gate Terminal 2. Delta Air Lines, a major carrier for the airport, will stay in Concourse B after the terminal swap. CVG described the opening of Concourse A to be "an opportunity to grow and compete." With the new, bigger concourse, (at least 20 gates), CVG will be able to take in new carriers such as Southwest Airlines.
As of June 2011[update], Southwest does not offer direct service to destinations outside the United States. Southwest has entered into code sharing agreements with other airlines to allow Southwest customers to connect to international destinations. After Southwest completes the integration of AirTran Airways in mid-2012, Southwest will offer direct service to a number of international destinations in Mexico and the Caribbean currently served by AirTran.
Due to contractual agreements with its pilots' and flight attendants' unions, Southwest is required to negotiate with those unions before entering into any code sharing agreements with other airlines.
Prior to ATA Airline's shutdown, Southwest had set a goal to codeshare with ATA and begin international codeshare services or ticket for international flights in 2009. Destinations served by ATA would have included Canada, Mexico, Europe and the Caribbean.
On July 8, 2008, Southwest announced that it agreed to a comprehensive codeshare agreement with Canada's second largest carrier, WestJet Airlines.[82][83][84] Southwest terminated the WestJet codeshare agreement in early 2010.
Southwest announced a plan to codeshare with Mexico's Volaris and services began in early 2010.
Southwest announced its second international codeshare agreement on November 10, 2008, with Mexican low-cost carrier Volaris. The agreement will allow Southwest to sell tickets on Volaris flights beginning in 2010, including international flights from the United States that the carrier started in early summer, 2009.[85] Volaris serves Chicago Midway (MDW), Oakland (OAK), Los Angeles (LAX) and San José (SJC) with service to Guadalajara. Volaris also operates between Los Angeles (LAX) and Morelia (MLM), Toluca (TLC) and Zacatecas (ZCL).[86] Service between Oakland and Mexico City's Benito Juárez International Airport (MEX) began in May 2011.[87]
In 1997, Southwest and Icelandair entered into interline and marketing agreements allowing for joint fares, coordinated schedules, and transfer of passenger luggage between the two airlines at Baltimore. Icelandair operated flights between Baltimore and Keflavik Airport in Iceland. Connecting service between several U.S. cities and several European cities appeared in the Southwest timetable[88] The frequent flyer programs were not included in the agreement. This arrangement lasted for several years but is no longer in existence, and Icelandair service to BWI ended January 2007.[89]
ATA Airlines, one of Southwest Airlines' main competitors in the Chicago market, historically operated out of Midway Airport alongside Southwest. ATA declared bankruptcy, and in 2004, Southwest injected capital into ATA that (among other things) would have resulted in Southwest's 27.5% ownership stake in ATA upon their exit from Chapter 11 bankruptcy proceedings.
In a departure from its traditional "go it alone" strategy, Southwest entered into its first domestic codesharing arrangement with ATA, which enabled Southwest Airlines to serve ATA markets in Hawaii, Washington, D.C., and New York City.
In late 2005, ATA secured $100 million in additional financing from the firm of MatlinPatterson, and Southwest's original deal with ATA was modified such that Southwest no longer retained the 27.5% stake (or any other financial interest) in ATA. The codeshare arrangement expanded to include all of ATA's 17 destinations and all of Southwest's 63 destinations. In 2006, Southwest's pilot union approved a codeshare sideletter to their contract with limitations on the growth of this and other codeshare agreements. While these restrictions today are minor, outsourcing remains a growing concern in the union's current contract negotiations.
During 2006, Southwest Airlines began marketing ATA only flights. ATA's dependence on the Southwest network continued to grow in 2006, and at the time of ATA's demise in April 2008, the airline offered over 70 flights a week to Hawaii from Southwest's focus cities in PHX, LAS, LAX, and OAK. Additional connecting service was available to many other cities across the United States. Plans had been announced for ATA to offer exclusive international service for Southwest by 2010, but were scratched when ATA abruptly ended operations on April 3, 2008. There was no plan to open the ATA/Southwest codeshare to ATA's sister carriers, North American Airlines or World Airways, even though they are co-owned by the same corporate entity created from ATA Holdings.
The ATA/Southwest codeshare was terminated when ATA filed for Chapter 11 bankruptcy on April 3, 2008.[90] Towards the end of November 2008, Southwest announced it was buying the operating certificate and the remaining assets of ATA Airlines thus enabling Southwest Airlines access to New York LaGuardia slots formerly controlled by ATA. According to Southwest Airlines "...it doesn't include any aircraft, facilities or employees of ATA."[91]
On July 8, 2008, Southwest Airlines officially announced the intent to begin a codeshare agreement with WestJet Airlines of Canada, giving the two airlines the ability to sell seats on each other's flights.[92] Originally, the partnership was to be finalized by late 2009, but has been postponed due to economic conditions.[93]
On April 16, 2010, Southwest and WestJet airlines amicably agreed to terminate the implementation of a codeshare agreement between the two airlines.
As of December 2011[update] the Southwest Airlines fleet consists of 567 aircraft, all of which are variants of the Boeing 737.[4]
| Aircraft | In Service | Orders | Options | Passengers | Notes |
|---|---|---|---|---|---|
| Boeing 737–300 | 169 | 0 | 0 | 137 | Launch customer and largest operator of this variant Newer aircraft being retrofitted with electronic flight decks |
| Boeing 737–500 | 25 | 0 | 0 | 122 | Launch customer |
| Boeing 737–700 | 372 | 125 | 92 | 137 | Launch customer and currently the largest operator of the type |
| Boeing 737–800 | 0 | 73 | 0 | 175 | Scheduled to enter service in March 2012 ETOPS configured upon delivery[95] |
| Boeing 737-8 MAX | 0 | 150 | 150 | TBA | Launch customer Scheduled to enter service in 2017[96] |
| Total | 567 | 348 | 242 |
Southwest operates more Boeing 737 aircraft than any other airline in the world and is often cited as an example of an airline containing costs and streamlining operations by flying only one type of aircraft. Southwest has been a launch customer for all three of the Boeing 737 variants it currently operates and was the first airline to put both the 737–500 and 737–700 into service.
Although known for its flying only Boeing 737 aircraft, Southwest has operated other aircraft at times. Southwest operated leased Boeing 727–200 aircraft during the late-1970s and the mid-1980s and Southwest subsidiary TranStar Airlines operated McDonnell Douglas DC-9s and McDonnell Douglas MD-80s during the mid-1980s. After completing the purchase of AirTran Airlines, Southwest will add AirTran's existing fleet of both 737–700 and smaller Boeing 717–200 aircraft to the Southwest fleet, giving Southwest a fleet based on two different families of airliners.
After Boeing ceased production of the 737–300 and 737–500 variants, Southwest began ordering the 737–700 exclusively. Beginning in December 2007, Southwest began retiring some older 737-300s, reducing Southwest's 737–300 fleet count from its peak of 194. In comparison to the glass cockpits installed in competitor's 737–300 and 737–500 aircraft, Southwest's aircraft of those types are equipped with analog gauges. Newer Boeing 737–300 variants are being upgraded with retrofitted electronic flight decks and blended winglets to reduce operational costs. The retrofits will make the 737-300s operationally compatible with the 737–700 and support the airline's move to embrace the Global Positioning System enabled Required Navigation Performance system.[97][98]
On December 15, 2010, Southwest announced a plan to add the 737–800 to the Southwest fleet. Southwest changed an existing order with Boeing and plans to begin taking delivery of 20 new 737–800 aircraft beginning in March 2012. Southwest states that the 737–800 could enable more scheduling flexibility, allowing additional capacity in high-demand, slot-restricted or gate-restricted airports. Southwest may use the Boeing 737–800 first at busy airports in the Northeast and also stated that the aircraft could be used to fly to Hawaii, Alaska, Canada, Mexico and the Caribbean, destinations that Southwest does not serve. The 737–800 has 175 seats, 38 more than the largest planes in Southwest's current fleet. Due to the larger seat count, Southwest will add one additional flight attendant to each 737–800 flight.
All 737-800's and all 737 Max's are to include the Boeing Sky Interior and ETOPS.
On December 13, 2011, Southwest placed a firm order for 150 Boeing 737 MAX aircraft, becoming the launch customer for the type. First delivery is expected in 2017, with four expected to be handed over to the airline that year.
| Aircraft | Year retired | Replacement | Notes |
|---|---|---|---|
| Boeing 727–200 | Boeing 737–200 | 727's leased from Braniff International | |
| Boeing 737–200 | 2005 | Boeing 737–700 | Southwest's first aircraft type |
Southwest introduced the current canyon blue livery on January 16, 2001, the first primary livery change in Southwest's [then] 30-year history. Spirit One was the first plane painted in the canyon blue fleet color scheme. The new livery replaces the former primary color, desert gold, with canyon blue and changes the Southwest text and pinstripes to gold. The orange and red stripes continue to be used. The pinstripe along the plane is drawn in a more curved pattern instead of the straight horizontal line separating the colors in the original. For aircraft equipped with blended winglets, the blended winglets are painted to include the text SOUTHWEST.COM.
Southwest completed repainting its entire fleet with the new canyon blue livery in early 2010. The last aircraft to be repainted was a Boeing 737–300, registration N347SW.
Southwest's original primary livery was desert gold, red and orange, with pinstripes of white separating each section of color. The word Southwest appeared in white on the desert gold portion of the tail. On the original three 737-200s, from June 1971, on the left side of the plane, the word Southwest was placed along the upper rear portion of the fuselage, with the word Airlines painted on the tail where Southwest is today N21SW. On the right side, the word Southwest was in the same place as today, but also had the word Airlines painted on the upper rear portion of the fuselage.N20SW.
Some Southwest aircraft feature special liveries. Southwest gives these aircraft special names, usually ending in "One". All special liveries prior to Spirit One wore the standard desert gold, red and orange colors on the vertical stabilizer and rudder. Subsequent special liveries including Maryland One, Slam Dunk One and others feature tails with the canyon Canyon Blue livery. All earlier specials, with the exception of Triple Crown One, have been repainted to match. Aircraft painted in special liveries, such as Shamu, have plain white painted blended winglets.[4]
Some of the well-known examples of special liveries include:
Prior to the 2000s, Southwest served smaller meals than the meals served by full service airlines, with shorter flights receiving single small snacks and soft drinks, and longer flights (with a duration of about 3 hours or more) meriting "Snack Packs" of prepackaged goods. In the 2000s these meals in a bag typically exceed the food served on full-service airlines like United Airlines or American Airlines. Southwest also offers free in-flight beverages (excluding alcohol). Southwest has complimentary peanuts or pretzels on all flights, and many flights have free Nabisco snacks. There is no in-flight entertainment. Southwest is known for colorful boarding announcements and crews that burst out in song. The singing is unusual, and is quite popular among passengers, but has been noted by some travel critics as being offensive and intrusive.[102]
Southwest maintained excellent customer satisfaction ratings; in 2006, according to the Department of Transportation December year end operating statistics, Southwest ranked number one (lowest number of complaints) of all U.S. airlines for customer complaints, with 0.18 per 100,000 passengers enplaned. Southwest Airlines has consistently received the fewest ratio of complaints per passengers boarded of all major U.S. carriers that have been reporting statistics to the Department of Transportation (DOT) since September 1987, which is when the DOT began tracking Customer Satisfaction statistics and publishing its Air Travel Consumer Report.
In July 2010, it became widely publicized that Southwest had classified mechanical difficulties as a force majeure event in their contract of carriage[103], a definition not shared with major competitors such as Delta, American, Continental and United.[104] Within days of the controversial change, Southwest clarified the additional clause to read "mechanical difficulties by entities other than Carrier."[105]
After completing a testing phase that began in February 2009, Southwest announced on August 21, 2009 that it will begin rolling out in-flight wi-fi Internet connectivity via Row 44's satellite-broadband based product. Southwest began adding Wi-Fi to its aircraft in the first quarter of 2010, they hope to have all airplanes equipped sometime in 2012.[106]
Southwest first began to offer a frequent-flyer program on June 20, 1987, calling it The Company Club. Unlike competitor's programs which were based on miles flown, The Company Club credited for trips flown regardless of distance.[107] Southwest Airlines renamed its frequent flyer program Rapid Rewards on April 25, 1996.[108]
The original Rapid Rewards program offered one credit per one-way flight from an origin to a destination including any stops or connections on Southwest Airlines. When 16 credits were accumulated in a 24 month period, Southwest awarded one free round-trip ticket that was valid for 12 months.[109] Beginning March 1, 2011, Rapid Rewards changed to a points system based on ticket cost.[110] Members earn and redeem points based on a three-tier fare scale multiplier and the cost of the ticket.[111]
Customers were able to earn one-half credit by using a Southwest partner to book any car rental or hotel stay, regardless of whether a Southwest flight is involved. Rapid Reward members can also earn one credit for every US$1,200 charged to a Rapid Rewards branded Visa credit card, with charges from Southwest or its partners counting double by dollars spent. Members could register their credit card with Rapid Rewards Dining to receive 0.25 credits for every US$100 spent at restaurant partners. In early 2009, Southwest announced their first retail partner, TeleFlora Flower Club, from which members can earn 0.5 or 1 credit with each flower order, depending on the total cost of the order.[112]
Double rapid rewards credits were awarded for trips booked online using the airline's website, but this policy was changed at the end of 2003 to award one-half credit for each segment booked online. The bonus for online booking was discontinued completely in April 2005.
Prior to February 2006, reward travel was subject to blackout dates but not capacity controls; one could use a reward to travel on any flight for which seats were available, provided it was not on one of the five blackout dates. In February 2006, Southwest Airlines changed their policies so that the blackout dates were eliminated, but capacity controls were instituted, limiting the quantity of seats available to those traveling on reward credits.
In early 2006, Southwest expanded its codeshare agreement with ATA Airlines and allowed redemption of award tickets on flights to Hawaii at the rate of two awards per round trip flight. This program ceased on April 3, 2008 when ATA ceased operations due to bankruptcy.
Southwest Airlines has not had any passenger deaths on any of its planes in its history, but has had eight incidents/accidents with one hull-loss and one death on the ground.
On June 22, 2011, a March 25 recording of an in-flight transmission of Southwest pilot Captain James Taylor apparently unintentionally broadcasting a conversation with his co-pilot was released to the press. The conversation was peppered with foul language directed at gay, overweight and older flight attendants. According to Southwest, the pilot was reprimanded, temporarily suspended without pay and received diversity education before being reinstated. Captain Taylor also sent an e-mail apology to all of Southwest's employees, especially the crew bases they criticized.[118][119][120]
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