died yesterday at 87.Herb Kelleher, the larger-than-life Southwest Airlines impresario who taught the world that air travel did not have to be the exclusive plaything of the rich,
"Our basic thinking [was that] Southwest would democratize the skies," Kelleher told me in 2010. "Which we did. I mean, a couple of years ago 85 percent of [Americans] had flown at least one commercial flight as opposed to 15 percent in 1966."
Kelleher was not the founder of Southwest, but rather the founding lawyer—which came in handy, since the Texas-based upstarts spent five years in court before getting its first plane off the ground in 1971. Why so much litigation? Because back then, as in pretty much all the world, America's airline industry was a heavily regulated cartel, with the federal Civil Aeronautics Board effectively letting the country's four main incumbent airlines veto the routes, prices, and even existence of any would-be competitor. Southwest's investors blew through their $500,000 seed money in legal fees, so Kelleher legendarily vowed to pay out of his own pocket if they lost their appeal to the Texas Supreme Court. They won, and he became CEO.
"One of the [government's] fundamental purposes was to throttle competition," Kelleher told me. "Their thesis was that if a new airline was gonna take one passenger—one, that's what they said—one passenger away from an existing airline, it can't be certificated....The fact that the existing airlines had 90 percent of all the revenue passenger miles in 1938, and also had 90 percent of all the revenue passenger miles in 1978, at the time of deregulation, would give you somewhat of a hint."
In our book The Declaration of Independents, Nick Gillespie and I argue that many of the modern world's best developments came through the combined efforts of three types of people: the theoreticians, who provided intellectual frameworks and persuasion for allowing a good thing to flourish; the deregulators, politicians who got the government out of the way; and the practitioners, who used this marvelous freedom—oftentimes forcing the deregulators' hands—to democratize a technology, setting off a chain reaction of productivity, wealth, and happiness. Kelleher was emphatically a member of that latter category. As we wrote:
Southwest Airlines exists because Texas is big. Like the now-forgotten Pacific Southwest Airlines (PSA) in California, Southwest was not subject to all those onerous interstate regulations and could [after finally winning its in-state legal battles] fly multiple routes in a large and populous state. The two airlines served as a field experiment to test—and demolish—the federal government's half-century-old theory that the airline industry, in the absence of tight regulation, would jack up prices, abandon small-town routes, and hinder the development of the industry itself.
That demonstration project proved critical in the federal deregulation of the airline industry. Once allowed to escape the confines of Texas airspace, Kelleher's airline became the most profitable on the planet, showing the entire world the joys of being free to move about the country.
Southwest [ushered] five key innovations into a sclerotic air-travel industry that had changed little in a half century: (1) unheard-of speed in turning around airplanes for their next flight, (2) a preference for unloved regional airports, (3) variable pricing between flights on the same route, (4) getting out of the meal-serving business, and (5) a conscious puncturing of jet age cool with corny, down-home friendliness.
That combination—minus #5, depending on the airline—can now be found all over the world, though not nearly often enough in the United States, due to lingering government controls on ownership, airports, air traffic, and more.
Kelleher was an outspoken critic, and frequent legal opponent, of the governnment's ham-handed interventions into the industry, including being the only major airline CEO to come out against the post–9/11 bailout money. But for all his contributions to the deregulation story, and vast riches in business, he will likely be remembered just as much for being a swashbuckling, chain-smoking, only-in-America kind of entrepreneur who would settle legal claims with armwrestling contests and advertise air travel like this:
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