Herb Kelleher, the co-founder of Southwest Airlines and pioneer of low-cost aviation, “without whom there would be no Ryanair”, has died aged 87.
Kelleher set up his budget carrier in Texas more than 50 years ago and changed the face of flying, stripping back costs and inflight services, opening up air travel to a wider range of people.
His biggest legacy for Europe may have been as a mentor for Michael O’Leary, the Ryanair chief executive, who flew to Dallas, where Southwest is based, in the 1980s to learn how to run a no-frills airline.
Following news of Kelleher’s death on Friday, O’Leary credited the extraordinary growth of the Dublin-based carrier to the lessons of his mentor.
“Herb was 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,” he said.
“His passing is a sad day for low-fare airlines and sales of Wild Turkey bourbon.”
Kelleher had gained publicity from the beginning by promising the lowest fares to customers, or compensating them with a bottle of whiskey if they believed they had paid more than a rival would have charged.
Southwest became an industry powerhouse, a brand infused with the colourful, unconventional personality of its boss. The airline’s first flight was in June 1971, and it grew to fly more passengers around the US than any other carrier, spawning a host of imitators at home and worldwide.
In a statement announcing his death, Southwest said Kelleher had “revolutionised commercial aviation and democratised the skies”.
The company added: “Herb’s passion, zest for life and insatiable investment in relationships made lasting and immeasurable impressions on all who knew him, and will forever be the bedrock and esprit de corps of Southwest Airlines.”
As well as his business nous, Kelleher was known for his extrovert antics and flair for a memorable marketing ploy. When executives of other airlines dismissed Southwest as cattle class for the cheap traveller, Kelleher responded with a TV advert featuring his head covered by a paper bag that he promised to give to any potential customer too embarrassed to be seen flying on his airline.
On another occasion, when Southwest and a rival company were battling to use the same slogan, Kelleher challenged its chief executive to arm-wrestle for the rights. Kelleher turned up in red shorts, lost, but kept using the slogan, with his rival grateful for the publicity Kelleher hadgenerated for both airlines.
Southwest’s current chief executive, Gary Kelly, described working alongside Kelleher as “one of the greatest joys of my life … He challenged people and he kept us laughing all the way”.
Southwest, like the budget carriers that came to emulate it, focused on short-haul flights from point to point, rather than connecting flights and building hub-and-spoke networks as its rivals did.
It pared back inflight service, in the days when airlines promoted the glamour and luxury of cabin life, and used a single model of aircraft, the Boeing 737, to cut costs. Southwest ripped up the blueprint by getting rid of assigned seats, and flew from smaller, secondary airports to minimise costs and delays.
While rivals derided its model, Southwest was making a profit by 1973 and has stayed in the black ever since, an unparalleled streak in an industry known for losses and bankruptcies.
Kelleher became Southwest’s chairman in 1978 and chief executive in 1982, eventually taking a back seat as emeritus chairman in 2001, two years after being diagnosed with prostate cancer. But he remained on the payroll and went to the office regularly.
A law graduate from New York, Kelleher’s low-cost mantra apparently did not extend to stinting on his employees’ wages. He said his people were crucial to the company’s success, to ensure friendly customer service whether the flight was budget or not.
In a 2011 interview, Kelleher said his proudest achievement was that, in an industry where tens of thousands of jobs were lost after September 11, Southwest never made its workers redundant.
Kelleher’s lessons for low-cost aviation
Fly one type of plane
While manufacturers led by Boeing and Airbus tout models for every range and route, potentially maximising the efficiency per passenger, Kelleher decided it was far simpler and more cost-effective to pick one plane and build a network around it, keeping down engineering, maintenance and pilot training costs. He chose the Boeing 737 – as did Ryanair. EasyJet went for the Airbus A320 family.
Drive down costs every year
A laser-like focus on the bottom line put Southwest in pole position, and Ryanair has continued that obsession – although as both have become more established and dominant in their respective markets, Scrooge-ish excess has been downplayed.
Turn around aircraft as quickly as possible
Sweating the assets is crucial when a new plane costs $50m-$100m. The longer the plane is in the sky, the more it earns. Low-cost carriers will now routinely spend as little as 25 minutes on the tarmac between flights – with easyJet executives sometimes seen carrying a bin bag down the plane aisle before landing to help cut cleaning time.
Concentrate on selling seats first
The science of dynamic pricing has evolved, with fares starting as low as needed to fill the planes. Traditional loyalty schemes or air miles have been jettisoned: instead, once the passengers are booked, airlines can make money on ancillaries, from luggage to allocated seats.