Southwest Airlines
flying home to Texas last summer with Southwest Airlines, I had the most fun and
unique experience with an airline that I could ever remember. It all started out
quite oddly enough in the lobby just before takeoff. As I was checking in at the
ticket counter, the representative asked me if I wanted to play a game that
could get me free round trip tickets. "Sure, who wouldn\'t," I
exclaimed. As she gave me my boarding pass she said, "Great, how many holes
do you have in your socks?" Initially caught off guard, I responded,
"Excuse me!" "The free tickets are being given to the customer
who has the most holes in their socks," she explained with a perky smile.

It was just my luck that I was wearing sandals. I told her, "Too bad your
not checking underwear, because I\'m sure I could be in the running for some free
tickets with that sort of game." The remainder of the flight was filled
with jokes and gags yet quality service from the pilot to the flight attendants.

I can remember our flight attendant, dressed in a T-shirt, shorts and tennis
shoes along with the rest of the staff, enhanced the safety announcements with
the remark: "There may be fifty ways to leave your lover, but there are
only six ways to leave this aircraft." Having fun is obviously a big part
of Southwest Airlines formula to success. It all starts from the top with their
childish yet brilliant boss Herb Kelleher. Kelleher, the company\'s CEO, is the
"nut" behind these shenanigans. This chain-smoking, Wild

Turkey-drinking Texas transplant from New Jersey has: · Dressed for employee
celebrations as Roy Orbison, Elvis, a medieval knight and a teapot; · Passed
out the peanuts himself on board his orange and brown 737s · In front of
cheering employees, arm-wrestled another CEO for the right to use the slogan
"Plane Smart." (He got whipped, but he used the slogan anyway.) This
man, once called "The High Priest of Ha Ha" by Fortune Magazine firmly
believes: "If you feel real good about coming to work, if you feel real
good about what you\'re doing, if you feel you are doing something for a
meaningful cause and you\'re having fun while you\'re doing it, then you look
forward to coming to work. You don\'t succumb to stress as easily and you
cooperate with other people more quickly and more easily. If you have a sense of
humor . . . it tends to not allow you to make mountains out of molehills."

1 Kelleher, known as Herb to the troops and his partners, reinvented air travel
twenty-five years ago with its low fares and zany irreverent style. This paper
will give a historical overview of the company, discuss the ingredients to the
company success, offer some financial strengths and present a final conclusion.

Section I: Southwest\'s History Twenty-seven years ago, Rollin King, a San

Antonio entrepreneur who owned a small commuter air service, and Kelleher, who
was a lawyer at the time, got together and decided to start a different kind of
airline. They began with one simple notion. If you get your passengers to their
destinations when they want to get there, on time, at the lowest possible fares,
and make certain they have a good time doing it, people will fly your airline.

And you know what? They were right. Within those 27 years, Southwest Airlines
became the fifth largest major airline in America. Today, they have flown over

50 million passengers a year to 54 cities all over the southwest and beyond.

They do it over 2,300 times a day with over 267 of the newest jets in the nation
and fly only one type aircraft; the B-737. The average age of their fleet is
only 8.4 years and they own over sixty percent of them. In May 1988, they were
the first airline to win the coveted U.S. Department of Transportation Triple

Crown for a month - Best On-time Record, Best Baggage Handling, and Fewest

Customer Complaints. Since then, they\'ve won it thirty-one times, as well as
five annual Triple Crowns for 1992, 1993, 1994, 1995, and 1996. They have been
an airline whose has led to the advancement of the commercial airline industry.

They were the first airline with a frequent flyer program to give credit for the
number of trips taken and not the number of miles flown. They have pioneered
senior discounts, Fun Fares, Fun Packs, a same-day air freight delivery service,
ticketless travel, and many other unique programs. 2 Here is a brief year