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Flashback Fridays: Our First Year in the Black

Employee
Employee
As we all know, between the time Rollin and Herb sat down at the St. Anthony bar in 1966 and when a desert gold-adorned 737 actually left the ground with paying Customers onboard in 1971, Air Southwest (the name initially incorporated in 1967) attempted to secure capital from investors with the promise one day of a return on their investment. Most of the seven million dollars initially raised went to fighting the seemingly never-ending legal battles that plagued the early years of our Company, to the extent that we were technically bankrupt prior to even acquiring an airplane.  Herb, dedicated to seeing the endeavor through, volunteered to continue fighting the battle out of his own pocket, and convinced the Board to “go one more round” in court to fight for the freedom to fly. FF1In 1971 Air Southwest changed its name to Southwest Airlines and brought on a team of industry veterans to establish the operation.  When our first revenue flight actually took off on June 18, with overwhelmingly positive reviews, the only challenge was actually filling the 112 seats onboard at the time.  Lamar Muse would call Herb (working from his law firm in San Antonio) to provide Customer counts for the day, occasionally as low as 150.  Herb asked his sister-in-law about her experience after traveling on one of those early flights, who told him “It was the best service I’ve ever had on a plane.” When he asked how many others were on the flight, she replied, “Well, there were the Pilots, three stewardesses, and me.” FF2For every effort made to retain or gain new Customers, another challenge seemed to present itself.  When Southwest transferred operations from the new Houston Intercontinental Airport down to the more convenient (and vacant) Houston Hobby airport in November 1971, the other airlines followed.  The decision to move proved to be successful and, in response, Braniff launched their “Get Acquainted” sale, offering $13 fares (compared to our $26 fare) for travel between Dallas and Houston, in an attempt to bleed the Company to a financial death.  This led to our famous response of holding onto our published fare, but offering Customers a “choice of a valuable gift,” which in most cases was a fifth of premium liquor.  Additional legal battles continued as the soon-to-open DFW Regional Airport and the Cities of Dallas and Fort Worth sued Southwest to vacate Love Field when the new airport opened.  Although Southwest was successful throughout, the continued challenges placed a significant economic toll on our young airline. The first glimmer of financial hope came on January 13, 1974 when earnings for 1973 were announced.  With revenues of $9,208,841 and expenses totaling $9,034,085, we finally made it into the black with a profit of $174,756. While it wasn’t much, actually making money was a major milestone considering all the attempts to prevent Southwest from even having the opportunity to make money at all.  As the cover of our 1973 annual report states, “Southwest Airlines Turned the Corner in 1973!