LONDON – This week saw both Southwest Airlines and the aviation industry lose a figure, Herbert D. Kelleher.
He passed away this week at the age of 87 beside the comfort of his family.
Southwest Airlines executive staff listed Kelleher as “a pioneer, a maverick, and an innovator” with his strategy “revolutionizing commercial aviation and democratizing the skies”.
The statement went on to say that “Herb’s passion, zest for life, and insatiable investment in relationships made lasting and immeasurable impressions on all who knew him and will forever be the bedrock and esprit de corps of Southwest Airlines.”
Where it all began…
The Kelleher family moved into Texas in early life to begin plans to start a law firm or a business.
One of Herb’s law clients and businessmen, Rollin King famously created the Southwest concept on a cocktail napkin in a restaurant in San Antonio with Kelleher.
By 1971, the airline concept was formed and thus began a battle that lasted four years taking on legal challenges from competitors who tried to keep it grounded even before launch.
It faced such battles from the likes of Braniff in January 1973 where Southwest cut fares to a baseline $13 on every flight.
The carrier succeeded in the battle against competitors by offering low fares to passengers, removing unnecessary services as well as avoiding the “hub-and-spoke” scheduling system used by other airlines in favor of building traffic in such secondary airports as Chicago-Midway.
By 1982, Kelleher became the CEO of the carrier, which marked the beginning of a corporate culture that made employees well known for having fun and not taking things seriously.
And this level of culture was clearly seen with the famous arm-wrestling match between Kelleher and Stevens Aviation CEO Kurt Herwald over a trademark lawsuit of the “Just Plane Smart” motto in 1992.
Although Kelleher lost this battle, the airline benefitted by around $6 million in publicity benefits over the sheer nature of the fight as well as around $20,000 donated to respective charities too.
Fast forward to 2004 and Kelleher’s approaches paid off with the airline being named among the Top Five Most Admired Corporations in the U.S as per Fortune Magazine.
He was also inducted into the Junior Achievements U.S Business Hall of Fame in the same year.
Also in that same year was Gary Kelly replacing Kelleher as the new CEO, having jumped from a Controller in 1986 to Chief Financial Officer in 1989 to the VP of Finance by 2001.
2007 came with much sadness to the Southwest family as Kelleher announced that he would step down from the role of Chairman and resign from the board of directors in May 2008.
Kelly ended up replacing Kelleher in this role also and is currently the Chairman of the Board of Directors and the CEO, where he has remained ever since.
Kelleher’s Contribution to the Industry…
Although some people may not have heard of him, he provided a lot of insight into what we see in the low-cost industry today.
Michael O’Leary, CEO of Ryanair labelled him as “the Thomas Edison of low-fare air travel, the one who revolutionised the industry”.
Sir Richard Branson of Virgin stated that “he was definitely the pioneer” as far low-cost travel is concerned.
It is clear that without Kelleher’s contribution to the industry, we would not be in the position we are in, not just in the U.S with ULCC’s and LCC’s but also in Europe.
As stated by Doug Parker, the Chairman and CEO of American Airlines, “we lost an industry icon” and a “legend” that “brought the freedom of travel to hundreds of millions of people”.
Kelleher has developed this from nothing to an airline that has over 750 aircraft in the fleet with plenty more ordered on the way.
It seems clear also that the appointment of Gary Kelly in 2008 as new CEO by Kelleher was a wise choice, especially in the significant growth Southwest has experienced in the past few years.
Especially with Kelly growing through the ranks ever so quickly, quick change is something that is part of the Southwest model and will continue to expand for many years to come.
This will obviously be forever in the hearts of Southwest, especially with the mentality of growing but not being too serious at the same time.
Kelleher was an important element to what was an ever-growing industry and aviation will forever miss him for that.