The Ledger
Every statement that passed quotation and attribution checks. Mix any filter with any other: certainty 1/5, debate potential 5/5, or both at once.
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Southwest claims Smithsonian credit for e-tickets, but Morris Air invented them
“They were, and have credit today in the Smithsonian as being the first Ticketless airline, but it was really our system that did it.”
Kelleher: Southwest was the most heavily unionized carrier in the US
“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.”
Kelleher: 4% Profitable Market Share Beats 90% Unprofitable Share
“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.”
Kelleher: Southwest kept low costs despite being the most unionized US airline
“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.”
Kelleher: Companies that think small grow bigger; companies that think big shrink
“Think small and act small and we'll get bigger. Think big and act big, and we'll get smaller.”
Kelleher: A profitable 4% market share is better than an unprofitable 90%
“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.”
A profitable 4% market share beats an unprofitable 90% share
“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.”
Southwest maintained low costs despite being America's most unionized airline
“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.”
Southwest CEO Herb Kelleher vowed to fiercely enforce Neeleman's non-compete agreement
“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…”
Neeleman: Kelleher suggested Neeleman could eventually succeed him at Southwest
“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”
Kelleher: Southwest achieved 10-minute gate turns to run planes 12 hours daily
“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…”
Kelleher: Having Zero Airline Experience Qualified Him to Build Southwest
“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…”
Kelleher: Consistently rejected cash compensation increases in favor of stock options
“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.”
Kelleher: Incumbents used specious legal arguments to manipulate regulators against Southwest
“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.”
Zero airline experience qualified Kelleher to disrupt the industry
“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…”
Southwest pioneered 10-minute gate turnarounds to maximize aircraft utilization
“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.”
Kelleher: Turned down pay and bonus raises to lead Southwest by example
“I always turn down pay increases, bonus increases, to set a good example, I thought, for all of our people.”
Kelleher: Southwest Airlines has never furloughed an employee
“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.”
Kelleher: CAB fare increases drove up legacy airline ticket prices
“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.”
Kelleher: Southwest flew a four-plane schedule with three planes after cash crunch
“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.”
Kelleher: Blocking Southwest signaled a failure of the free enterprise system
“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…”
Kelleher: Southwest cut fares by $400 on long routes instead of serving meals
“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.”
Kelleher: Southwest Airlines has not had an annual loss since 1972
“We've never had a loss for a full year since 1972.”
Kelleher: Kept Southwest alive in 1969 by litigating for free and paying court costs
“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…”
Kelleher: Southwest Airlines has never furloughed an employee in its operating history
“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.”
Kelleher: Southwest paid cash for most aircraft, avoiding heavy debt loads
“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…”
Kelleher: Southwest Airlines has not had a full-year financial loss since 1972
“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.”
Kelleher: Having zero airline experience was an advantage in founding Southwest
“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…”
Kelleher: Personally funded Southwest's litigation costs out of pocket in 1969
“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…”
Kelleher: Southwest created the US airline industry's first profit-sharing plan in 1973
“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.”
Kelleher: Southwest ran a four-plane schedule using three planes to meet payroll
“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.”
Southwest Airlines has not posted a full-year net loss since 1972
“We've never had a loss for a full year since 1972.”
Southwest Airlines has never furloughed an employee in its history
“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.”
Thinking and acting small prevents complacency and corporate decline, says Kelleher
“Think small and act small, and we'll get bigger. Think big and act big, and we'll get smaller.”
Southwest entered the Baltimore market by cutting existing airfares by 60%
“When we start out here, we're reducing your existing fares by 60%.”
Southwest sold a plane for payroll but kept its four-plane schedule
“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.”
Kelleher offered to litigate for free and pay Southwest's court costs
“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 maintained the highest percentage of owned aircraft of any airline
“So we had the largest percentage in our fleet of owned airplanes of any carrier of any size.”
Raz: Southwest acquired Morris Air for $130M in 1993
“Southwest, in 1993, buys the company for a hundred and thirty million dollars.”
Neeleman: Finished Morris Air's two-year Southwest integration in six months
“They asked me to take two years to integrate Morris into Southwest, and within six months, I had it all done.”
Southwest Airlines fired Neeleman just five months after acquiring his company
“So I started in December, and they fired me in May.”
Kelleher: Southwest briefly became Texas's largest liquor distributor via promo
“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.”
Kelleher: Texas Supreme Court cleared Southwest 19 hours before first flight
“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.”
Kelleher: Southwest launched the US airline industry's first profit-sharing plan in 1973
“When we turned our first very slim profit in 1973, we set up the first profit-sharing plan in the American airline industry”
Kelleher: Southwest owned a higher percentage of its fleet than any other carrier
“So we had the largest percentage in our fleet of owned airplanes of any carrier of any size.”