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Case Study On Southwest Airlines

Case Study On Southwest Airlines

I. BACKGROUND
Texas businessman Rollin King and lawyer Herb Kelleher founded Air Southwest in 1967 as an intrastate airline linking Dallas, Houston, and San Antonio.  The now-defunct Baniff and Texas International sued, questioning whether the region needed another airline, but the Texas Supreme Court ruled in Southwest’s favor.  In 1972 the company, renamed Southwest Airlines, made its first scheduled flight.  Operating from Love Field in Dallas, Southwest adopted love as the theme of its early ad campaigns, serving love portions (drinks) and love bites (peanuts).  When other airlines moved to the new Dallas/Fort Worth in 1974, Kelleher insisted on staying at Love Field, gaining a virtual monopoly there. 
 When Lamar Muse, Southwest’s president, resigned in 1978 because of differences with King, Kelleher assumed control.  An industry maverick, Kelleher introduced advanced-purchase Fun Fares in 1986 and a frequent-flier program in 1987 based on the number of flights taken instead of mileage.  He gained attention in 1992 for starring in Southwest’s TV commercials and for arm wrestling Stevens Aviation chairman Kurt Herwald for the rights to the “Just Plain Smart” slogan.  When southwest became the official airline of Sea World in Texas, Kelleher had a

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