Southwest Airlines

“Well, I knew nothing about airlines, which I think made me eminently qualified to start one, because what we tried to do at Southwest was get away from the traditional way that airlines had done business. So I started with the tabula rasa blank slate, and I th…”

“I always turn down pay increases, bonus increases, to set a good example, I thought, for all of our people. Of course, the stock that I got rose enormously in value, but that was in lieu of cash compensation.”

“Herb Kelleher once resolved a trademark dispute with a rival airline. They were both using the slogan, plane smart. He resolved this not in court, but by challenging the other CEO to a public arm wrestling match, which Herb Kelleher lost.”

“We've never had a loss for a full year since 1972.”

“So I said, let's focus on profitability. And if we have four percent of a market and we're profitable, that's better than having 90% of a market and being unprofitable.”

“We told the public of Texas that if you paid the higher fare, We would give you a free bottle of whiskey. And so for a couple of months, we became the largest liquor distributor in the state of Texas.”

“We were the most heavily unionized carrier in the United States. Our low costs were not due to being a non-union carrier, since we were more unionized than our competitors were.”

“It went through the United States Supreme Court and through the Texas Supreme Court twice before we could fly. And the Texas Supreme Court handed down an order, 19 hours prior to our first flight.”

“We've never furloughed an employee at Southwest Airlines when the rest of the industry during that period up until now has probably furloughed, I don't know, a million and a half employees throughout the world.”

“Think small and act small, and we'll get bigger. Think big and act big, and we'll get smaller.”

“10 minute turns at the gate. We bring that airplane in, and 10 minutes after it stopped at the gate, you know, It would be pushing back again.”

“When we turned our first very slim profit in 1973, we set up the first profit-sharing plan in the American airline industry”

“When we start out here, we're reducing your existing fares by 60%.”

“We had to get rid of one airplane in order to meet our payroll right after Southwest started flying, and so we decided that we would fly a four airplane schedule with three airplanes.”

“And during that time, the company ran out of money, and in 1969, the board of directors had a meeting and talked about shutting the airline down, shutting the company down. And I said, well, how about if I litigate for nothing and pay all the court costs out o…”

“Well, on some flights, we had fares as low as 10 dollars. On others, we had fares as low as 15 or 20 dollars. We were about 45% lower Than the other carriers.”

“So we had the largest percentage in our fleet of owned airplanes of any carrier of any size.”

“And we started to raise seed money to the extent of about 500,000 dollars.”

“Yeah, we were the most heavily unionized carrier in the United States. Our low costs were not due to being a non-union carrier, since we were more unionized than our competitors were.”

“I invested 10,000 dollars.”

“And we've never furloughed an employee at Southwest Airlines when the rest of the industry during that period up until now has probably furloughed, I don't know, a million and a half employees throughout the world.”

“Established a rule of thumb that we're gonna pay 80% of the cost of all of our new airplanes from internally generated funds. And actually we wound up paying a hundred percent for most of our airplanes. So we had the largest percentage in our fleet of owned ai…”

“Well, we've had years when, you know, our earnings were down, but, ah, we've never had a loss for a full year since 1972.”

“As a matter of fact Braniff at one point put in a lower fare than ours, which they called an introductory fare. Of course, they'd been serving Texas, you know, for 40 years by that time. But in any event, one of the things that came out of that was we maintain…”

“Well, I knew nothing about airlines, which I think made me eminently qualified to start one, because what we tried to do at Southwest was get away from the traditional way that airlines had done business. So I started with the tabula rasa blank slate, and I th…”

“I always turn down pay increases, bonus increases, to set a good example, I thought, for all of our people. Of course, the stock that I got rose enormously in value, but that was in lieu of cash compensation.”

“It went through the United States Supreme Court and through the Texas Supreme Court twice before we could fly. And the Texas Supreme Court handed down an order 19 hours prior to our first flight.”

“Think small and act small and we'll get bigger. Think big and act big, and we'll get smaller.”

“And during that time, the company ran out of money, and in 1969, the board of directors had a meeting and talked about shutting the airline down, shutting the company down. And I said, well, how about if I litigate for nothing and pay all the court costs out o…”

“When we turned our first very slim profit in 1973, we set up the first profit-sharing plan in the American airline industry, and I think we made a profit of, I don't know, a 100,000 dollars that year or something like that.”

“Well, you know, the arguments that they made in court were actually all kind of specious, and this is one illustration of where people attempt to use, to manipulate the government to prevent competition.”

“We had to get rid of one airplane in order to meet our payroll right after Southwest started flying, and so we decided that we would fly a four airplane schedule with three airplanes.”

“We were about 45% lower Than the other carriers.”

“Well, between the time when I started working on forming Southwest and the time we flew our first flight It was four and a half years.”

“So I said, let's focus on profitability. And if we have four percent of a market and we're profitable, that's better than having 90% of a market and being unprofitable.”

“I always turn down pay increases, bonus increases, to set a good example, I thought, for all of our people.”

“We've never furloughed an employee at Southwest Airlines when the rest of the industry during that period up until now has probably furloughed, I don't know, a million and a half employees throughout the world.”

“Herb Kelleher once resolved a trademark dispute with a rival airline. They were both using the slogan, plain smart. He resolved this not in court, but by challenging the other CEO to a public arm wrestling match, which Herb Kelleher lost.”

“10 minute turns at the gate. We bring that airplane in, and 10 minutes after it stopped at the gate, you know, It would be pushing back again. And we had airplanes that, ah, you know, were operating 12 hours a day sometimes, so each one of those additional fli…”

“Well, I knew nothing about airlines, which I think made me eminently qualified to start one, because what we tried to do at Southwest was get away from the traditional way that airlines had done business. So I started with the tabula rasa blank slate, And I th…”

“We maintained our full fares, and we told the public of Texas that if you paid the higher fare, We would give you a free bottle of whiskey. And so for a couple of months, we became the largest liquor distributor in the state of Texas.”

“It went through the United States Supreme Court and through the Texas Supreme Court twice before we could fly. And the Texas Supreme Court handed down an order, 19 hours prior to our first flight.”

“And during that time, if they had a little financial problem the CAB would just give them a fare increase, and so that's how their fares got so high as compared to what we were doing since we weren't regulated by the CAB.”

“When we turned our first very slim profit in 1973, we set up the first profit-sharing plan in the American airline industry”

“So we had the largest percentage in our fleet of owned airplanes of any carrier of any size.”

“If you had taken a poll in the state of Texas after we filed our application, I can assure you that 99.9% Of the population of the state of Texas would say, this thing will never come to anything.”

“We were the most heavily unionized carrier in the United States. Our low costs were not due to being a non-union carrier, since we were more unionized than our competitors were.”

“We had to get rid of one airplane in order to meet our payroll right after Southwest started flying, and so we decided that we would fly a four airplane schedule with three airplanes.”

“Well, first of all, I was idealistic about it, because I figured if they can prevent Southwest Airlines from introducing what Southwest Airlines proposes to provide to the consumer, Then that is a sign that the free enterprise system is failing, and one of the…”

“Let's focus on profitability. And if we have four percent of a market and we're profitable, that's better than having 90% of a market and being unprofitable.”

“I invested 10,000 dollars.”

“And I said, yeah, it's so competitive that when we start out here, we're reducing your existing fares by 60%.”

“And I said, no, we're not. We're gonna charge you 400 dollars less per trip, right? And I understand you can get a pretty good sandwich at Chasin's for 400 dollars.”

“We've never had a loss for a full year since 1972.”

“Well, on some flights, we had fares as low as 10 dollars. On others, we had fares as low as 15 or 20 dollars. We were about 45% lower. Than the other carriers.”

“Well, between the time when I started working on forming Southwest and the time we flew our first flight, It was four and a half years.”

“And during that time, the company ran out of money, and in 1969, the board of directors had a meeting and talked about shutting the airline down, shutting the company down. And I said, well, how about if I litigate for nothing and pay all the court costs out o…”

“Southwest, in 1993, buys the company for a hundred and thirty million dollars.”

“They asked me to take two years to integrate Morris into Southwest, and within six months, I had it all done.”

“About halfway through the non-compete, I called, or a couple, maybe a year and a half into it, I called Herb, and I said, hey, Herb, you know, I've consulted, you know, legal counsel. This thing is not really enforceable. I mean, I didn't get any consideration…”

“I mean, he kind of led me to believe that if I just minded my P's and Q's that I would be a successor one day, you know, that I could, you know, follow in his footsteps”

“They were, and have credit today in the Smithsonian as being the first Ticketless airline, but it was really our system that did it.”

“So I started in December, and they fired me in May.”