Southwest Airlines CEO Reflects on Carrier's 50th Anniversary at San Antonio Hotel Where Idea was Born
Dec. 3—Inside the St. Anthony Hotel, Gary Kelly, CEO and chairman of the board of Southwest Airlines, reflected on the beginning of the airline 50 years ago.
It was across from the bar in the warmly lit St. Anthony Club where, according to lore, businessman Rollin King met with attorney Herb Kelleher in 1966 and sketched the idea for a Texas airline on the back of a cocktail napkin.
The sketch became known as the Texas Triangle. Written on the three points were Dallas, Houston and San Antonio. In 1967, Air Southwest was incorporated, and by 1971, the newly dubbed Southwest Airlines took flight for what the CEO this week called five decades of low fares, a compassionate culture and an underdog spirit.
"It's such a tribute to all the people that have been involved with Southwest over the years," said Kelly, 66. "It's been a success story, studied endlessly with case studies. The thought that you can have an idea, three modest airplanes and a couple hundred employees and become the largest, most successful airline is just an amazing thing."
Before he attended the book launch of "50 Years. One Heart. A History of Southwest in 50 Objects" at the St. Anthony, Kelly joined a celebration at San Antonio International Airport to unveil photography featured in the book. A re-created photo of the fabled napkin hung on the wall, along with four large prints unveiled in a new art exhibit in Terminal B. The five prints are part of 50 iconic photos of artifacts, outfits and objects featured in the book.
Airport Director Jesus Saenz Jr. said the artwork belonged to one of six new exhibits on display for passengers as they walk through the terminals. He said the celebration wouldn't have been complete without acknowledging Kelly's tenure with Southwest and what the carrier's presence has meant to San Antonio.
"We wanted to be here today," Kelly said to the crowd of more than 50 people, "and put an exclamation point to the celebration."
Kelly, Southwest's fifth CEO, was born and raised in San Antonio. He played quarterback for the football team at Churchill High School and flew on a plane for the first time after graduation. It was 1972, and he was recruited to play for Rice University, which paid for his airfare.
The airline was Southwest. He wasn't impressed. On that Saturday morning flight to Houston, there were only two other passengers on the plane. He said he recalled thinking, "Man, it's never going to make it."
In 1986, Southwest hired him as a controller. Nine years later, he was promoted to chief financial officer. In 2008, he was named CEO. Kelly worked with the late founder and former CEO Kelleher, whom he called a father figure and beloved entrepreneur.
"The founders got it right," Kelly said. "You have to have low cost, but not be cheap. It's a powerhouse combination. If you can do those two things, you're going to win."
Compared with other airlines, Southwest was unconventional. In the beginning, hostesses wore hot pants. One-way fares from Dallas to San Antonio were $13. The airplanes were painted orange, desert gold and warm red. Snacks were called "love bites" and "love potions."
Sitting beneath paintings hung on burnished-wood walls, Kelly said the employees' penchant for singing, engaging and interacting with passengers is a small way of establishing a human connection.
"Culture is a funny thing. It's an attitude that our group has adopted," he said. "It's treating people with respect. There's more to it than being humorous — we're good at what we do, and our people are proud of what we do. What I think is the most endearing aspect of Southwest is our hospitality. We call it our service heart."
The airline has faced its share of challenges.
When it began, the government regulated fares and flights. Kelly said the airline that operated strictly in Texas wasn't subject to federal regulation. In 1978, the Airline Deregulation Act allowed it to start interstate flights.
" Southwest democratized the skies, we like to say," Kelly said. "It gave Americans the freedom to fly."
The terrorist attacks of 9/11 brought the industry to a standstill and grounded aircraft across the nation. Kelly said Southwest was able to keep its employees working in the aftermath of the tragedy.
He said they survived COVID-19, but the pandemic has been a challenge.
"I'm proud of the fact that our success has meant we never laid off an employee, had a furlough or pay cut," Kelly said. "It's a bright ray of sunshine in what has otherwise been a pretty dark period in 2021."
On Feb. 1, Kelly will move into the role of executive chairman, and Bob Jordan, executive vice president of corporate services, will take over as CEO.
"The stars were aligned to make the change. It's just time to do the next thing," Kelly said of the handoff. "I'm not leaving the company. There's a lot of work to be done, and (I) will certainly be in a position to help in the years of transition."
As he prepares to move to the next phase of his career, Kelly said Southwest wants to carry on the legacy that Kelleher and the employees built into a Texas success story.
"This company is not done," Kelly said. "The next 50 years will be just as exciting."
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