The company continued to stress operational efficiency and low costs, highlighting its no-cost flight changes and no baggage fee perks to passengers. Its point-to-point model has helped keep it agile with any changing demand patterns. Since it had few international flights and no business class, it didn't suffer the fallout from international travel bans like the major carriers. Southwest had a solid balance sheet as it was highly profitable ahead of the crisis, and its low-cost operating strategy kept the company buoyant as travel demand vaporized. Much of the existing operating model and strategic decisions enabled Southwest to fare better than competitors. Southwest could weather COVID-19 better than its competitors and navigate a recovery faster upon the re-opening. The pandemic bought the airline industry down to its knees. Southwest is the only airline to report 47 consecutive years of profit until the COVID-19 pandemic shut down economies in 2020. By 2019 Southwest grew its fleet to over 700 Boeing 737 planes flying to over 120 destinations in 11 countries, generating annual revenues north of $20 billion. Southwest has consistently ranked high among customer satisfaction surveys. This ecosystem installed a loyal and dedicated workforce that was instrumental in growing it into a major airline carrier when its revenues surpassed $1 billion in 1989. Kelleher had instilled a fun and supportive family-like culture with its employees. The company continued to operate intrastate until 1979, when it expanded routes nationally to become a regional airline carrier. Initially, Southwest only operated in Texas between three routes: Houston, San Antonio and Dallas. This enabled them to offer very low-priced tickets. Operating just one plane model kept maintenance costs low and turnaround times fast at 20 minutes. Southwest had just one class for passengers, no assigned seats, no meals and only flew Boeing 737 airplanes. The company officially changed its name to Southwest Airlines and took flight in 1971. He was a disrupter that irritated the major carriers every chance he got as they opposed the low-cost carriers' foray into Texas.Īfter five years of legal battles with the incumbent airlines trying to prevent its entry into the Texas market, Kelleher elevated the battle up to the Texas Supreme Court. CEO Kelleher was famous for his chain smoking (up to 40 cigarettes a day) and whiskey-drinking outspoken persona habitually breaking the rule book.

Southwest Airlines was initially founded in 1966 by the charismatic visionary lawyer Herbert Kelleher and small carrier operator Rollin King in 1966. This article will provide additional insights for investors wanting to buy Southwest stock.Īs the world's largest low-cost airline carrier, Southwest Airlines had humble beginnings as an in-state airline with three Boeing 737 plans servicing three routes in Texas. Its unique point-to-point model has helped to keep the airline running efficiently. Southwest Airlines broke its decades-long run of profitability during the pandemic but was one of the first airlines to return to profitability in 2022. Airline stocks plummeted.ĭebt levels climbed as investors wondered if the industry would ever rebound. Travel and leisure became an epicenter industry as lockdowns and travel restrictions limited the availability of flights, crews and even pilots. The airline industry was devastated by the COVID-19 pandemic.

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