Aviation: Southwest co-founder passes away

The airline industry lost a true visionary on January 3 when Herb Kelleher, co-founder of low-fare pioneer Southwest Airlines, passed away aged 87.

Kelleher along with his partners Rollin King and John Parker set up Air Southwest in 1967. The business was built on the premise of providing low-cost air travel between cities in Texas, but it took four years of legal battles before a Southwest Airlines flight took off for the first time. In the early years the carrier was confined to operating within the state of Texas and flew just twelve services a day between Dallas, Houston and San Antonio. It was 1979 before the airline started flying outside its home state, and it only reached the US east and west coasts in the 1990s. Today though, Southwest flies to 99 destinations in 40 US states plus Mexico, Puerto Rico and Central America. It operates around 750 Boeing 737 jets, employs 57,000 staff, flies more than 150m passengers per year and has revenues of over $21bn per annum.

Herb Kelleher, co-founder of Southwest Airlines, has passed away aged 87 (Southwest Airlines)

Kelleher was Southwest's Executive Chairman between 1978 and 2008, and president and CEO from 1981 through to 2001. Fortune magazine once described him as perhaps the best CEO in America. Kelleher valued Southwest's employees. In 2012 he told CNBC: "Employees first, customers second, shareholders third. If the employees serve the customer well, the customer comes back, and that makes the shareholders happy."

Kelleher explained: "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."

In addition to low fares, Southwest pioneered free seating (the lack of seat assignments) and all-economy cabins. The airline developed the concept of flying just one aircraft type to keep operations simple and costs low, while cutting the time they were on the ground at airports to a minimum. Kelleher told customers that they would pay the lowest fare possible, or they would get a free bottle of whiskey, but he later admitted that "for a couple of months, we became the largest liquor distributor in the state of Texas." Nevertheless, Southwest consistently receives fewer complaint than other US airlines according to DOT figures.

Praise for a visionary

A Southwest statement described Kelleher as a "pioneer, a maverick, and an innovator." He was known as a hard-drinking, hard-smoking, but passionate boss who always made time for his employees and encouraged them to enjoy working for the airline.

Current CEO of Southwest, Gary Kelly, said: "His vision for making air travel affordable for all revolutionized the industry. But his legacy extends far beyond our industry and far beyond the world of entrepreneurship. He inspired people; he motivated people; he challenged people - and, he kept us laughing all the way."

American Airlines CEO Doug Parker said Kelleher "brought the freedom of travel to hundreds of millions of people, and his appetite for taking on any real or perceived battle was unmatched. His style presents the ultimate case study for airlines or any service company whereby if you take care of your people, they will take care of your customers, which will take care of your shareholders. That simple yet profound way of leading continues to inspire us, and we aspire to honor Herb's example."

Even Ryanair's Michael O'Leary was full of praise, describing Kelleher as "the Grand Master Yoda of the low fare airlines. He was the leader, the visionary, and the teacher: without Herb there would be no Ryanair, and no low fares airlines anywhere."

The early years of commercial aviation were full of larger than life characters who defined the industry. Kelleher followed in their footsteps and has rightfully taken his place in the airline hall of fame.