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Southwest Airlines founder Herb Kelleher

Southwest Airlines (LUV) is one of the greatest entrepreneurial success stories of all time. Prior to takeoff of their first commercial flight, they spent three and half years in legal battles defending their right to fly. Two battles went all the way to the United States Supreme Court which ultimately upheld Southwest’s right to fly. The date of the Supreme Court decision, December 7, 1970, is considered by many to be the beginning of deregulation in the airline industry. Southwest has grown into the largest US airline in terms of passengers flown, and yet since 1987 they have maintained the fewest overall customer complaints of any domestic airline and the lowest operating cost structure in the industry. They have been profitable for 33 consecutive years, in an industry where no other company has been profitable for even five consecutive years. Over the past 10 years, shareholder returns have been more than double the S&P 500, and their market cap is larger than the combined market cap of the next three largest airlines — American, United and Delta. Nearly every US competitor has tried to emulate their pioneering business model. Fortune has called Herb Kelleher perhaps the best CEO in America, and among all corporations in the United States, the magazine lists Southwest Airlines as the third most admired. Download the mp3 to hear how it came to be that you are now free to move about the country.

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