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Southwest Airlines

Coordinates: 32°50′48″N 96°51′40″W / 32.8467°N 96.861°W / 32.8467; -96.861 (Southwest Airlines Headquarters)
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This article is about the United States airline. For other similarly named airlines, see Southwest Airlines (disambiguation).

32°50′48″N 96°51′40″W / 32.8467°N 96.861°W / 32.8467; -96.861 (Southwest Airlines Headquarters)

Southwest Airlines
File:Southwest Air Logo.png
IATA ICAO Call sign
WN SWA SOUTHWEST
FoundedMarch 16, 1967 (1967-03-16)
Commenced operationsJune 18, 1971 (1971-06-18)
AOC #SWAA304A
Focus cities
Frequent-flyer programRapid Rewards
SubsidiariesAirTran Airways
Fleet size605
Destinations92
HeadquartersDallas, Texas, USA
Key people
RevenueIncrease US$ 17.69 billion (2013)[1]
Operating incomeIncrease US$ 1,278 million (2013)[1]
Net incomeIncrease US$ 754 million (2013)[1]
Total assetsIncrease US$ 19.34 billion (2013)[1]
Total equityIncrease US$ 7.33 billion (2013)[1]
Employees45,000 (2013)[1]
Websitesouthwest.com

Southwest Airlines Co. (NYSE: LUV) is a major U.S. airline and the world's largest low-cost carrier, headquartered in Dallas, Texas. The airline was established in 1967[2] and adopted their current name in 1971.[3] The airline has 44,831 employees as of December 2013 and operates more than 3,400 flights per day.[4] As of June 5, 2011, it carries the most domestic passengers of any U.S. airline.[5] As of July 2014, Southwest Airlines has scheduled service to 89 destinations in 41 states, Puerto Rico and international countries.

Southwest Airlines has used only Boeing 737s, except for a few years in the 1970s and 1980s, when they leased a few Boeing 727s. As of August 2012 Southwest is the largest operator of the 737 worldwide with over 550 in service, each averaging six flights per day.[4] In May 2011 Southwest acquired AirTran Airways, with integration of the carriers expected to be complete by December 28, 2014.[6] On March 1, 2012, the company was issued a single operating certificate, technically becoming one airline.[7]

History

Early history

Southwest Airlines Boeing 737-200 wearing the original airline colors when landing at San Antonio in 1975

Southwest Airlines began with the March 15, 1967 incorporation of Air Southwest Co. by Rollin King and Herb Kelleher to fly within the state of Texas.[2][3]

Kelleher believed that by staying within Texas, the airline could avoid federal regulation.[8] Three airlines (Braniff, Trans-Texas, and Continental Airlines) started 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.[9] The Texas decision became final on December 7, 1970 when the U.S. Supreme Court declined to review the case, without comment.[10]

Boeing 737-200 at William P. Hobby Airport in 1983

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 were those of Southwest Airlines, and the two other jets are colored in Braniff and Continental colors. The Lawyer resembles Herb Kelleher. The book was adapted into a stage musical, Show Your Spirit, sponsored by Southwest Airlines, and played only in cities served by the airline.[11]

Southwest Airlines Boeing 727-200 at Phoenix Sky Harbor International Airport in 1984

On March 29, 1971 Air Southwest Co. changed its name to Southwest Airlines Co.[3] with headquarters in Dallas. Southwest began scheduled flights on June 18, 1971, Dallas to Houston and Dallas to San Antonio with three 737-200s.[4] The OAG for 15 October 1972 shows 61 flights a week each way between Dallas and Houston Hobby, 23 each way between Dallas and San Antonio, and 16 each way between San Antonio and Houston; no flights were scheduled on Saturdays.

Revenue Passenger-Kilometers, in millions
Year Traffic
1975 480
1979 2,405
1985 8,587
1990 16,024
1995 37,535
2000 67,923
2005 97,097
Source: Air Transport World

Southwest Airlines founder Herb Kelleher studied California-based Pacific Southwest Airlines and used many of PSA’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 including the same person who had selected hostesses for Hugh Hefner's Playboy jet selected the first flight attendants, females described as long-legged dancers, majorettes, and cheerleaders with "unique personalities." Southwest Airlines and Herb Kelleher dressed them in hot pants and go-go boots.[12]

The New York Times wrote in 1971 that Southwest Airlines President Lamar Muse, “says frankly—and repeatedly—that Southwest Airlines has been developed from its inception around the ideas that have proven to be successful for Pacific Southwest Airlines.” “ We Don't mind being copycats of an operation like that,” referring to a visit he and other Southwest executives made to PSA as they assembled their operating plans. PSA welcomed them and even sold them flight and operations training. Muse later wrote that creating the operations manuals for his upstart airline was “primarily a cut and paste procedure”, and it is said that “Southwest Airlines copied PSA so completely that you could almost call it a photocopy.”[13]

The rest of 1971 and 1972 saw operating losses. One of the four 737s was sold to Frontier Airlines and the proceeds used for payroll and other expenses. Southwest continued a schedule based on four aircraft but using only three, so the "ten minute turn" was born and was the standard ground time for many years.[14][15]

Wright Amendment

The Wright Amendment of 1979 is a federal law that governs traffic at Dallas Love Field, the pre-1974 airport in Dallas. It originally limited most nonstop flights to destinations within Texas and neighboring states. The limits began to phase out in 1997 and 2005; in 2006, the amendment was repealed, with some restrictions intact until 2014, but added a restriction on the number of gates allowed.[16]

When airline deregulation came in 1978, Southwest began to plan interstate flights from Love Field, causing groups affiliated with Dallas-Fort Worth Airport, including the city of Fort Worth, Texas, to push the Wright Amendment through Congress to restrict such flights.[17] Under the amendment, Southwest and other airlines were barred from operating or even ticketing passengers on flights from Love Field to destinations beyond the states that border Texas. The Wright Amendment’s restrictions did not apply to aircraft with 56 or fewer seats; Southwest did not use the 56 seat loophole.[18] Southwest's first schedule out of Texas was Hobby to New Orleans about February 1979.

In 1997 Southwest’s efforts paid off with the Shelby Amendment, which added Alabama, Mississippi, and Kansas to the allowed destinations. Southwest began nonstop service between Dallas Love Field and Birmingham, Alabama.[19]

Network Expansion

Southwest just flew to DAL, HOU and SAT until 1975 when it added Harlingen. In 1979 it flew to eleven Texas cities and added its first route out of the state, Houston-New Orleans, around the end of the year. In 1981 it expanded north to Tulsa and Oklahoma City and west to Albuquerque; in 1982, north to Kansas City and west to Phoenix, Las Vegas and California.

Flights to Denver started in 1983 (and ended in 1986), to Little Rock 1984, to St Louis and Chicago Midway in 1985, to Nashville in 1986 and to Detroit Metro and Birmingham in 1987. Eastward expansion resumed in 1992 with Cleveland and Columbus, then Baltimore in 1993. The Pacific Northwest started in 1994 after the Morris Air takeover; Tampa and Fort Lauderdale started in January 1996. East to Providence in 1997, Manchester in 1998, and Islip and Raleigh-Durham in 1999.

Southwest's only route within California was San Francisco-San Diego until it started Oakland in 1989; in the next few years its capacity on the West Coast ballooned.

1980s–90s

Southwest hired their first black pilot, Louis Freeman, in 1980. In 1992 he was named the first black chief pilot of any major U.S. airline.[20]

Southwest's Houston Pilot Base opened on June 1, 1984. Houston was their first crew base outside of Dallas.[21]

A 737–300 (N648SW) pictured in Southwest's original desert gold livery.

On November 30, 1984 Southwest took delivery of their first Boeing 737–300. Southwest was the launch customer and as of May 2012 is the largest operator of the aircraft type.[22] The first 737-300 was dubbed "Kitty Hawk."[23]

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 TranStar's assets to Lorenzo in August 1987.[24][25]

Southwest moved into their current headquarters in 1990. Previously, the airline was headquartered in the 1820 Regal Row building in Dallas, by Love Field.[26] At that time the headquarters had 256,000 square feet (23,800 m2) of space and approximately 650 employees.[27] The current headquarters facility was built at a cost of $15 million in 1990 dollars.[28] In early 1995 the building received an additional 60,000 square feet (5,600 m2) of space. As of 2006 about 1,400 employees worked in the three story building.[27]

In 1990, the airline registered their aircraft in Houston so they 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 their aircraft.[29]

Southwest acquired Morris Air, a competing airline based in Salt Lake City, Utah, in 1992, paying US$134 million in stock.[30] 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.[31] One founder of Morris Air, David Neeleman, worked with Southwest for a short period before leaving to found WestJet and then JetBlue Airways, a competing airline.[32]

Boeing 737-200 in Midway Airlines/Southwest Airlines hybrid livery in 1991

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.[33] 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, 69 percent of Southwest passengers checked in for their flights online or at a kiosk.[4]

Southwest Airlines 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.[34]

At present, Southwest has enjoyed much positive press (and a strong financial boost) from their energy trading skills.[35][36][37] However, while most analysts agree that volatility hedges can be beneficial,[38] speculative hedges are not widely supported as a continuing strategy for profits.[39]

In March 1996,[40] 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.[41] This occurred after, on Wednesday March 13, 1996, the Dallas City Council unanimously voted to allow for the construction.[42] 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.[27]

2000s

Repealing the Wright Amendment

A Southwest Airlines Boeing 737–700 landing into San Jose International Airport, shown in the company's current Canyon Blue livery, introduced in 2001.

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 Saint Louis, Missouri and Kansas City, Missouri quickly started in December 2005.[43]

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.[44]

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 Delta Air Lines and United.

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 winged heart livery and its stock exchange ticker symbol (LUV).

2008–2009

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%.[45][46]

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.[47] 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.[47][48]

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.[49]

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.[50]

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 $30.2 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.[51]

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.[52] 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.[53]

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.[54] The FAA is still determining whether it will fine Southwest or its vendor.[55]

2010s

AirTran Airways acquisition

An AirTran Airways Boeing 737–700 taxiing at Portland Jetport

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. 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 estimates the transaction's value at $3.2 billion and expects onetime 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 obtained a single operating certificate (SOC) from the United States Federal Aviation Administration on March 1, 2012, but expects that full integration of AirTran into Southwest's operations to continue until 2014.

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.[6]

The purchase adds 25 additional destinations previously not served by Southwest including cities in Mexico, the Caribbean, and Atlanta, Georgia, an AirTran hub and, at the time the largest U.S. city not served by Southwest. On October 10, 2011, USA Today reported that Southwest will work to no longer bank flights in Atlanta as AirTran did. AirTran's Boeing 737 orders and options will remain in place and those deliveries to the Southwest operation will occur over the coming years.[6] AirTran 737 aircraft are in the process of being converted to Southwest's new evolve interior and canyon blue livery.

On February 14, 2013, Southwest announced that it had begun codesharing with AirTran. It took the first step on January 26, 2013 by launching shared itineraries in five markets. Southwest continued to launch shared itineraries with 39 more markets beginning February 25, 2013. As of April 2013, shared itineraries are available for travel between all Southwest and AirTran cities (domestic and international).[56] In May 2014, it was announced the airlines will be fully integrated by December 29, 2014.[57]

2011–present

For the tenth year in a row, Fortune magazine recognized Southwest Airlines in its annual survey of corporate reputations. Among all industries in 2004, Fortune has listed Southwest Airlines as number three among America’s Top Ten most admired corporations.[58]

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.[59]

In January 2012, Southwest Airlines expressed interest in serving Mexican and South American destinations out of Hobby.[60] On May 30, 2012 Houston's city council approved Southwest's request for international flights from Hobby.[61] Southwest agreed to invest at least $100 million to cover all costs tied to the Hobby upgrade, which includes designing and building five new gates and a customs facility. Construction at Hobby is expected to take two years, with international flights likely beginning in 2015.[62]

On April 11, 2012, Southwest introduced the 737–800 to the fleet. It seats 175 passengers as compared to the regular 143-seater 737-700. The first 737–800 was called "Warrior One"[63] in salute of the Southwest Employees’ Warrior Spirit.

Corporate identity

Advertising

The company has employed humor in its advertising. Slogans include "Love Is Still Our Field", "Just Plane Smart", "The Somebody Else Up There Who Loves You", "You're Now Free To Move About The Country", "THE Low Fare Airline", "Grab your bag, It's On!", and "Welcome Aboard". The airline's current slogan is "If It Matters To You, It Matters To Us".

A Southwest Airlines Boeing 737–700 with blended winglets (N741SA) pictured on the tarmac at Chicago Midway International Airport wearing the airline's original desert gold livery.

In March 1992, 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.[64][65]

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.[66]

Corporate affairs

Headquarters

Southwest Airlines headquarters in Dallas

The Southwest Airlines headquarters is located on the grounds of Dallas Love Field in the Love Field neighborhood of Dallas, Texas.[4][67]

On September 17, 2012, Southwest broke ground on a new Training and Operational Support (TOPS) building.[68] The TOPS Building is across the street from its current headquarters building. The property includes a two-story, 100,000-square-foot operations building that could withstand an F3 tornado. It also includes a four-story, 392,000-square-foot office and training facility with two levels devoted to each function. The new facilities will house 24-hour coordination and maintenance operations, customer support and services, and training. BOKA Powell was the project architect. Manhattan Construction is the general contractor. The project is scheduled for completion in late 2013, with occupancy beginning in 2014.

Employment

As of year end 2013, Southwest Airlines has 44,831 employees.[69]

The President and CEO of Southwest Airlines 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.

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.

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.[70] The Aircraft Maintenance Technicians are represented by the Aircraft Mechanics Fraternal Association (AMFA).[71] 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).

Impact on carriers

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.[72] 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 three 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.[72] All these different management strategies can be seen as means of differentiation from other competitors in order to gain competitive advantages.[73]

Lobbying Texas rail

Southwest has fought against the development of a high-speed rail system in Texas.

In 1991 a plan was made to connect the Texas Triangle (Houston – Dallas – San Antonio) with a privately financed high speed train system which would quickly take passengers from one city to the next. This was the same model Southwest Airlines used 20 years earlier to break into the Texas market where it served the same three cities.

Southwest Airlines, with the help of lobbyists, created legal barriers to prohibit the consortium from moving forward and the entire project was eventually scuttled in 1994, when the State of Texas withdrew the franchise.[74]

Destinations

Main article: Southwest Airlines destinations
Southwest Airlines Destination Map

As of July 2014, Southwest Airlines schedules flights to 89 destinations in 41 states, Puerto Rico and international countries, the newest being Sangster International Airport, Lynden Pindling International Airport, and Queen Beatrix International Airport on July 1, 2014.

Southwest does not use the "hub and spoke" system of other major airlines, preferring the "Point to Point" system. It has large operations in certain airports. An average of 80 percent of Southwest passengers are local passengers— only 20 percent of all passengers are connecting passengers. This is higher than most airlines, where many passengers connect in hub cities. However, at Southwest's focus cities, the percentage of connecting passengers can reach 30 percent.[75] Recent numbers indicate that the number of connecting passengers is steadily rising.[76]

As part of its effort to control costs, Southwest sometimes uses secondary airports in cities with high costs. Secondary airports have lower costs and may be more convenient to travelers than major airports. At Chicago, Southwest uses Chicago Midway International Airport instead of the larger O'Hare International Airport. In Houston, Southwest uses William P. Hobby Airport while most carriers use George Bush Intercontinental Airport.

Top cities

Southwest approaching gate at LAX
Southwest Airlines Boeing 737 at Bob Hope Airport in Burbank, California
Southwest Airlines top served cities (As of July 2014)[77]
City Daily departures Number of gates Cities served nonstop Service began
Chicago-Midway 270 32 66 1985
Baltimore-Washington 230 28 60 1993
Las Vegas 228 19 58 1982
Denver 184 19 57 2006
Phoenix 171 24 47 1982
Houston (Hobby) 170 18 47 1971
Atlanta 160 31 42 2012
Orlando 158 20 41 1998
Dallas (Love Field) 126 15 16 1971
Los Angeles (LAX) 125 12 25 1982

International service

Southwest's first approach to international service came on April 19, 2012 when they signed a contract with the Amadeus IT Group which will initiate in 2014. This contract will give the airline the capability to begin flying to destinations outside of the United States. Before this contract was signed, Southwest's reservation system did not have the ability to serve international destinations.[78] Southwest debuted the international reservation system on January 27, 2014 followed by the first international flights which began on July 1, 2014 to Aruba (AUA), Montego Bay, Jamaica (MBJ) and Nassau, Bahamas (NAS).

Through the integration of AirTran, by the end of 2014, Southwest will add service to Aruba (AUA), Cancun, Mexico (CUN), Mexico City, Mexico (MEX), Montego Bay, Jamaica (MBJ), Nassau, Bahamas (NAS), Punta Cana, Dominican Republic (PUJ) and San Jose Cabo, Mexico (SJD).

Airline partnerships

Past

In 1997, Southwest and Icelandair entered into interline and marketing agreements allowing for joint fares, coordinated schedules, transfer of passenger luggage between the two airlines in Baltimore and connecting passengers between several U.S. cities and several European cities.[79] The frequent flyer programs were not included in the agreement. This arrangement lasted for several years but ended when Icelandair's service to BWI ended in January 2007.[80]

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.

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 with connections available to many other cities across the United States. The ATA/Southwest codeshare was terminated when ATA filed for Chapter 11 bankruptcy on April 3, 2008. Southwest ultimately acquired the operating certificate and some of the landing rights of ATA in the ensuing proceedings.[81]

On July 8, 2008, Southwest Airlines officially announced the intent to begin a codeshare agreement with WestJet of Canada, giving the two airlines the ability to sell seats on each other's flights.[82] Originally, the partnership was to be finalized by late 2009, but had been postponed due to economic conditions.[83]

On April 16, 2010, Southwest and WestJet airlines amicably agreed to terminate the implementation of a codeshare agreement between the two airlines.

Southwest announced its second international codeshare agreement on November 10, 2008, with Mexican low-cost carrier Volaris. The agreement allowed Southwest to sell tickets on Volaris flights.[84] However on February 22, 2013, the connecting agreement was terminated. It was said to be mutual between the airlines. Most industry experts believe that the expansion of the subsidiary of Southwest, AirTran Airways, into more Mexican markets, as a main reason for the termination of the agreement.[85]

Codeshare agreements

Southwest does not participate in any major global airline alliances, but the airline has a codeshare agreement with AirTran Airways. The agreement started only after Southwest acquired AirTran.

Fleet

Current fleet

As of July 2014, the Southwest Airlines fleet consists of the following aircraft. The average fleet age is 11.3 years.[86][87][88]

Southwest Airlines Fleet
Aircraft In Service Orders Options Passengers Notes
Boeing 737-300 122 — — 137
143 		Some retrofitted with electronic flight decks
Retirements 2016 - 2020[89]
Boeing 737-500 15 — — 122 Retired by 2016
Boeing 737-700 399 44 36 143 Options convertible to -800 series.
Boeing 737-800 70 50 — 175 All to be retrofitted with Split Scimitar Winglets[90]
Boeing 737 MAX 7 — 30 — TBA Scheduled to enter service in 2019[91]
Boeing 737 MAX 8 — 170 191 TBA Scheduled to enter service in 2017[92]
Total 605 295 227

Southwest is the world's largest operator of the Boeing 737.[93]

After completing the purchase of AirTran Airways, Southwest Airlines added AirTran's existing fleet of 737-700 aircraft to its fleet. However, the 717s acquired through AirTran will not be added to Southwest's fleet. Instead, they will be retired and transferred to Delta Air Lines until the end of 2015.[94][95]

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.[96][97]

On December 15, 2010, Southwest announced a plan to add the Boeing 737-800 to the Southwest fleet. The 737-800 entered operations at Southwest on April 11, 2012 and has 175 seats, 38 more than the former largest plane in Southwest's fleet.[98] All-800s include the Boeing Sky Interior, and all Southwest owned −800s are equipped with ETOPS capability.[99]

On December 13, 2011, Southwest placed a firm order for 150 Boeing 737 MAX 8 aircraft, becoming the launch customer for the type. First delivery is expected in 2017.[59] All 737 MAX 8 aircraft will include the Boeing Sky Interior.[59]

On May 15, 2013, Southwest became the launch customer for the Boeing 737 MAX 7 aircraft, and now has 30 MAX 7 aircraft on order. The first delivery is expected in 2019. They also announced an agreement to purchase ten pre-owned 737-700s from WestJet for delivery in 2014 and 2015.[100][101]

Fleet history

Southwest Airlines Fleet History
Aircraft Introduction Retired Replacement(s) Notes
Boeing 727–200 1979 1987 Boeing 737–200 Leased from Braniff International and People Express Airlines
Boeing 737–200 1971 2005 Boeing 737–700 Southwest's first aircraft type

Livery

Original desert gold livery, used until 2001

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.

Current canyon blue livery used from 2001–present

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; however, The Colleen Barrett Classic (N714CB), The Herbert D. Kelleher One (N711HK), & The Metallic Gold One (N792SW), which are Boeing 737–700 aircraft, retain the original desert gold livery. However, these classics do not have the black paint printed on the nose of the plane, and do not have the number one heart on it. These few planes still fly today but they are rare.

Special liveries

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 blue livery. All earlier specials, with the exception of Triple Crown One, have been repainted to match. Aircraft painted in special liveries have white painted blended winglets with the exception of Warrior One which added the split scimitar winglet in May 2014.[4]

Southwest Airlines Special Liveries[102]
Name Year Description Registration Photo
2,000th & 5,000th 737 produced 2006 Southwest received both the 5,000th 737 produced (February 13, 2006) (N230WN) and the 2,000th "Next Generation" 737 produced (July 27, 2006) (N248WN). The 2,000th "Next Generation" 737 is marked as such in its livery, though the 5,000th 737 is not similarly marked on the outside. It does have a placard stating that it is the 5000th 737 on the upper part of the inside entry door frame. 2,000th (N248WN), 5,000th (N230WN)
35th Anniversary Combined the original primary livery with the current canyon blue livery. N238WN
500th 737 2007 Southwest received their 500th 737 on June 28, 2007. This aircraft is marked to honor this milestone. N281WN
Arizona One 1994 The flag of the state of Arizona applied across the aircraft. N383SW
California One 1995 The flag of the state of California applied across the aircraft. N609SW
Charles E. Taylor One 2007 Named in honor of Charles E. Taylor, the first aviation mechanic that built the first aircraft engine that the Wright Brothers used on their flyer. N289CT
Colleen Barrett Classic/Heroine of The Heart 2008 Named in tribute to Colleen Barrett, the company's former Executive Vice President. N714CB, N266WN
Colorado One 2012 The flag of the state of Colorado is painted across the aircraft. This aircraft is also the 5,000th 737 produced. N230WN
Florida One 2010 The flag of the state of Florida applied across the aircraft. N945WN
The Fred J. Jones 1984 In honor of Fred J. Jones, one of Southwest's original employees.[103] Signature on the nose. It later became Southwest's only 737–200 to be painted in the Canyon Blue livery when it was applied in 2001. The aircraft was retired in 2005 and replaced in the same year with a 737–700 with the same signature on the cone. The replaced aircraft is also the first 737 Next Generation that was manufactured without eyebrow windows above the cockpit. N201LV
Green Plane 2009 Served as a test plane for new environmentally responsible materials and customer comfort products. When combined, the initiatives equated to a weight savings of about five pounds per seat, saving fuel and reducing emissions, along with adding recyclable elements to the cabin interior and reducing waste. The plane also included a decal rendition of the Southwest corporate logo in green on the side of the plane. N222WN
The Herbert D. Kelleher One 2008 Named in honor of Herbert D. Kelleher, the company's former CEO and Chairman. N711HK
Illinois One 2008 The flag of the state of Illinois applied across the aircraft. N918WN
Jack Vidal One 1995 First flew on February 27, 1995. It was delivered to Southwest on March 10, 1995. N601WN
The June M. Morris 1994 In honor of June Morris (founder of Morris Air), Signature and Morris Air logo on the nose. Signature and logo removed for Canyon Blue repaint. N607SW, Original, Canyon Blue
Lone Star One 1990 The flag of the state of Texas applied across the aircraft. N352SW
Maryland One 2005 The flag of the state of Maryland applied across the aircraft. N214WN
Metallic Gold One 2007 The last aircraft delivered to Southwest in the original scheme livery. N792SW
Nevada One 1999 The flag of the state of Nevada applied across the aircraft. N727SW
New Mexico One 2000 The flag of the state of New Mexico applied across the aircraft. N781WN
Nolan Ryan Express 1998 Commemorative sticker dedicated to famous Texas pitcher Nolan Ryan who is MLB's all-time strikeout leader with 5,714 strikeouts. N742SW
Penguin One 2013 To commemorate the 25th year of Southwest Airlines' partnership with SeaWorld, an aircraft is painted with penguins and advertisements for SeaWorld. To be repainted Canyon Blue (per SeaWorld partnership ending 12/31/2014) at a later date. source swamedia.com 07/31/14 N280WN
Shamu 1998 Two aircraft are painted to look like an Orca, with advertisements for SeaWorld.1 N713SW, N715SW
Silver One 1996 25th Anniversary aircraft. Originally polished bare metal, it was later painted silver for easier maintenance. It was then re-painted with a silver metallic paint. This aircraft also featured silver seats, which were replaced to conform with the rest of the fleet for simplicity. Silver One also featured silver heart shaped drink stirrers. Most recently Silver One was repainted in the fleet standard Canyon Blue theme due to the silver paint looking dingy and the company felt it did not fit the company's cheerful, bright personality. The Silver One nose logo remained but the interior was replaced with the fleet standard blue and tan. N629SW (Original, Silver Paint, Canyon Blue)
Slam Dunk One 2005 Basketball superimposed on side of aircraft and a different NBA team logo on each overhead bin in the cabin, recognizing Southwest's partnership with the National Basketball Association. On October 11, 2010 Southwest Airlines and the National Basketball Association announced that their partnership has ended and the aircraft will be repainted to standard canyon blue livery. Source: Dallas Morning News Aviation Blog (N224WN). N224WN
The Spirit of Hope 2004 Dedicated to the Ronald McDonald House. Overhead bins are covered in artwork from kids at a Ronald McDonald House in Washington State. N443WN
The Spirit of Kitty Hawk 1984 Livery and title introduced the first three Boeing 737–300 aircraft to the Southwest Airlines fleet. N300SW is the oldest −300 in the fleet, followed by N301SW and N302SW N300SW, N301SW, N302SW
Spirit One 2001 30th Anniversary aircraft, first aircraft in canyon blue paint scheme N793SA
Sports Illustrated 2009 A large decal of Sports Illustrated Swimsuit Edition Cover Model Bar Refaeli adorns the fuselage of N922WN. However on June 16, 2009 this aircraft was photographed in full canyon blue on a photo posted on airliners.net.[104] N922WN
Tinker Bell One 2008 Includes the logo of the Tinker Bell movie and a sticker featuring the phrase "Powered by Pixie Dust". However on April 2, 2010 this aircraft was photographed in full canyon blue, and later with the "Free Bags Fly Here" sticker just above the cargo door to promote Southwest's Bags Fly Free campaign. (N912WN, Tinker Bell/Original, Canyon Blue, Free Bags Fly Here) N912WN
Triple Crown One 1997 Livery dedicated to the employees of Southwest, in recognition of Southwest receiving five Triple Crown airline industry awards (best on-time record, best baggage handling, and fewest customer complaints). The overhead bins in Triple Crown One are inscribed with the names of all employees that worked for Southwest at the time, in honor of their part in winning the award. N647SW
Warrior One 2012 Named in salute of the Southwest Employees' Warrior Spirit, and was the first Boeing 737–800 to enter Southwest service. N8301J
Notes
  • ^1 The first aircraft to be painted in the "Shamu" scheme was N334SW (1988), a 737–300, and it was later followed by N507SW (Shamu II) and N501SW (Shamu III), both 737-500s. Subsequent to the retirement of Southwest's 737-200s, the 737-500s began to stay within a smaller geographic area formerly operated by the 737-200s, and as such, Sea World was no longer getting the optimal national exposure from these two aircraft. Two 737–700 aircraft, N713SW and N715SW, were repainted as the new Shamu aircraft, and both N501SW and N507SW were repainted in canyon blue colors. In 2013, N334SW was retired, leaving two Shamu aircraft. The artwork on the nose of each aircraft states "Shamu" plus the overhead bins on the aircraft display ads for Sea World.

Products and services

Southwest experience

Southwest operates using a unique boarding process

Southwest offers free in-flight non-alcoholic beverages with alcoholic beverages available as well for a price. Southwest is also one of the few airlines to offer Dr Pepper as a beverage option.[105] Southwest has complimentary peanuts or pretzels on all flights, and most flights have free Nabisco snacks. Southwest is known for colorful boarding announcements and crews that burst out in song. The singing is quite popular among passengers.[106]

Southwest maintains excellent customer satisfaction ratings; for many years, according to the Department of Transportation Southwest ranked number one (lowest number of complaints) of all U.S. airlines for customer complaints. 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.

Prior to 2007, Southwest boarded passengers by grouping the passengers into three groups, labeled A, B and C. Passengers would line up at their specified letter and board.[107] In 2007, Southwest modified their boarding procedure by introducing a number. Each passenger receives a letter (A, B or C) and a number 1 thru 60. Passengers line up in numerical order within each letter group.[107]

In-flight entertainment

After completing a testing phase that began in February 2009, Southwest announced on August 21, 2009 that it would 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. The airline began testing streaming live television in the summer of 2012 and video on demand in January 2013. All 737-700s and -800s are now equipped with Wi-Fi, streaming live television and video on demand.[108][109]

Evolve interior

On January 17, 2012 Southwest introduced a plan to retrofit its fleet with a new interior. Improvements include a modern cabin design, lighter and more comfortable seats made of eco-friendly products, increased under-seat space, new netted seatback pockets to provide more knee room, a new fixed-wing headrest and improved ergonomics. All Boeing 737-700s and -800s and select 737-300s now have the evolve interior. A total of 78 737-300s will be retrofited with evolve and Southwest expects to finish this by the end of 2013.[110] Though not originally planned, because of space saved, Southwest was able to fit an extra row of seats on its planes.

Rapid Rewards

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.[111] Southwest Airlines renamed its frequent flyer program Rapid Rewards on April 25, 1996.[112]

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.[113] Beginning March 1, 2011, Rapid Rewards changed to a points system based on ticket cost.[114] Members earn and redeem points based on a three-tier fare scale multiplier and the cost of the ticket.[115]

Customers could 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.[116]

On January 6, 2011, Southwest introduced an updated version of Rapid Rewards. Changes include no blackout dates, seat restrictions or expiring credits. It also adds more options to use points. The new program uses points instead of credits. Points are determined by the fare.[117]

Incidents and accidents

Southwest Airlines Flight 1248 runway overrun at Chicago Midway International Airport

Southwest Airlines has never had any passengers on board die as a result of a crash. Southwest Airlines incidents include 2 deaths (1 non-passenger death on the ground, 1 passenger homicide in the air) and 8 accidents (including 1 aircraft hull-loss). The airline was considered amongst the 10 safest in the world in 2012.[118]

Southwest Airlines incidents and accidents
Flight Date Aircraft Location Description Injuries
1455 March 5, 2000 Boeing 737-300 Burbank, California The aircraft overran the runway upon landing at Burbank-Glendale-Pasadena Airport, now called Bob Hope Airport, Burbank, California, injuring 43.[119] The incident resulted in the dismissal of the pilots. The aircraft was damaged beyond repair. This incident is the only hull-loss accident in the 40+ year history of the airline. 43 injuries
1763 August 11, 2000 Boeing 737 In flight Passenger Jonathan Burton broke through the cockpit door aboard Southwest Airlines Flight 1763 while en route from Las Vegas to Salt Lake City. In their own defense, the other passengers restrained Burton, who later died of the resulting injuries.[120] 1 death
1248 December 8, 2005 Boeing 737-700 Chicago, Illinois The aircraft skidded off runway after leaving Chicago Midway International Airport in heavy snow conditions. A six-year-old boy died in a car struck by the plane after it skidded into a street. Passengers on board the aircraft and on the ground reported several minor injuries. The aircraft involved, N471WN, became N286WN after repairs. 1 death (on ground); Several injuries
2294 July 13, 2009 Boeing 737-300 Charleston, West Virginia The flight from Nashville International Airport to Baltimore-Washington International Airport was forced to divert to Yeager Airport in Charleston, West Virginia, after a hole formed on the top of the plane's fuselage near the tail, resulting in depressurization of the cabin and deployment of the oxygen masks. The aircraft landed safely.[121] None
812 April 1, 2011 Boeing 737-300 Yuma, Arizona The flight from Phoenix Sky Harbor Airport to Sacramento International Airport operated with a Boeing 737–300 aircraft registered N632SW, was forced to declare an emergency and divert to Yuma International Airport after a hole appeared in the top of the aircraft fuselage. The aircraft landed approximately 40 minutes after takeoff from Phoenix.[122] 2 minor injuries
345 July 22, 2013 Boeing 737-700 N753SW New York, New York The flight from Nashville International Airport crash landed at New York's LaGuardia Airport after touching down hard, nose-gear first. "[T]he nose gear gave away so violently that the jet's electronics bay was penetrated by the landing gear with only the right axle still attached."[123] The Boeing 737 traveled 633 metres (2,077 ft) down the runway with its nose scraping, generating a shower of sparks, coming to rest slightly off the runway. Of 150 people on board, 10 were treated for minor injuries at local hospitals.[124][125] Damage to the 13-year-old aircraft is substantial[126] and it is unclear whether it will be repaired or written off upon release from NTSB jurisdiction. According to airfleets.net and Southwest Airlines 2013 Annual Report to Shareholders, the plane was written off. 10 minor injuries
4013 January 12, 2014 Boeing 737-700 Hollister, Missouri The flight from Chicago Midway International Airport accidentally landed at M. Graham Clark Downtown Airport instead of Branson Airport. The aircraft departed Clark safely the following day bound for Tulsa, Oklahoma and landed there without further incident.[127] None
1388 June 18, 2014 Boeing 737-700 Tampa Bay, Florida The flight from Tampa Bay to Houston had to turn around and land in Tampa Bay after colliding with a flock of birds causing minor wing damage.[128][129] None

Controversies

See also: Kevin Smith feud with Southwest Airlines and Access Now v. Southwest Airlines

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 who were criticized.[130][131][132]

On July 22, 2014 a family was asked to leave a Southwest flight because a father tweeted about a rude gate agent. As an A-List flyer he is generally entitled to board a flight early. He was told this time that his children could not accompany him. When he tweeted his dissatisfaction he and his family were pulled off the flight and told that unless he deleted the tweet the police would be called. Southwest has since offered an apology.[133]

See also

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