How Southwest Airlines Wins?

Herb Kelleher tends to look at problems differently than the rest. And when he saw the thousands of businessmen carpooling between Texas’ major cities, he decided a short-hop airline would be the perfect answer to these dreary commutes.

However, some of the more established airlines were very agitated by the thought of having another competitor in the sky, and fought him in court for years over his right to fly.

Finally, in 1971, Herb emerged victorious with is fledgling airline and Southwest Airlines began offering competitive rates for business fliers.

Herb’s next order of business was to attract business to his new airline. He had a tough sell – convincing business professionals that even though it cost more to fly, it was a better idea. He created a shrewd, but simple, marketing campaign that focused on cheap flights. Most of Southwest Airline’s flights were only $25, with some as low $10.

Herb’s other part of the marketing campaign was to make sure his customer’s kept coming back. He did this by providing the best customer service in the industry, even offering an “Executive Class” where for a slightly higher price, clients could get preferred seating and complimentary cocktails.

Southwest had its share of growing pains and like any new business one of the biggest challenges was keeping enough operating capital around. They even had to sell an airplane at one point in 1972 to keep everything afloat. Unwilling to sacrifice flights, Southwest developed the ability to turn around flights faster than anyone else in the industry – ensuring that their customers were not kept waiting.

One of the neat things about Southwest is that they have maintained many of these values over the past 40 years. You will still find that they have some of the best prices out there, and with initiatives such as their “bags fly free campaign, customers save even more money. And then, on top of that, you can even get the Southwest Airlines credit card to save up frequent flier points for your next free flight.