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Southwest Airlines was originally incorporated to serve three cities in Texas as Air
Southwest on March 15, 1967. The investors got together and decided to start a different
sort of airlines. They started it off with a simple notion that if you get your passenger to
their destination on time and at the lowest possible fares then people are sure to fly through
your airlines and this hold very true (Rollin King and Herb Kelleher 2007).
Some of the incumbent airlines of the time (Braniff, Trans-Texas, and Continental Airlines)
initiated legal action, and thus began a 3 year legal battle to keep Air Southwest on the
ground. Air Southwest eventually prevailed in the United States Supreme Court, which
ultimately upheld Air Southwests right to fly in Texas. December 7, 1970, the date of the
Supreme Court decision, is considered by many to be the beginning of deregulation in the
airline industry. The start of service in June 1971 was accomplished with three 737-200
aircrafts. Southwest Airlines turned its first annual profit in 1973. In 1981 Southwest
co-launched the 737-300 with USAir. In 1982 the first expansion beyond the Texas area
took Southwest Airlines to the west coast adding Phoenix, Las Vegas and San Diego. After
the opening of Dallas-Fort Worth International Airport in 1974, Southwest Airlines was the
only airline to remain at Love Field.
Southwest Airlines values employees, initiating the first profit-sharing plan in the U.S.
airline industry in 1974 and offered it ever since. In 2000, Southwest offered its employees
a record-setting $138M in profit sharing. This tax-deferred compensation represented an
