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Southwest Airlines Is the (_____) Company on Earth : a) Zaniest b) Savviest : Answer: Both

There's Definitely a Method to the Madness as Southwest Airlines--and Just Watch the Rest of the Industry Try to Copy It

It's her behind-the-scenes hand you see when Christmas and birthday cards arrive at each employee's home, signed simply, "Herb and Colleen." It's her voice urging co-workers to fill out a "LUV Report" every time they have an upbeat story to share. It is she who not only plasters the corridors with staff photos but also takes them down and reshuffles them every two years--so that "people feel like they're in a whole new environment." She also created the influential "Culture Committee," a team of more than 100 employees that continuously critiques Southwest's persona, devising all sorts of celebrations, tributes and incentives to fire up the troops. "Sometimes we've created a couple of imaginary battles just to keep the blood flowing."

They've been a team since 1967, when she started as his legal secretary. Barrett, a divorced, 51-year-old native of Vermont, still keeps Kelleher's schedule, cracking the whip to make sure he gets where he needs to be on time. He once called her his "beeper," telling Texas Monthly that she extended him all the freedom of a captive "in a North Korean prison camp." But her duties have evolved over the years, now encompassing perhaps the most crucial of Southwest's missions: She is the Den Mother, keeper of the flame, principal architect of all the contrivances designed to prevent the company's inimitable pluck from petering out.

Her effort serves a dual purpose, the most obvious being to retain the airline's small-fry identity, even as its work force balloons. The other isn't talked about as much. Despite having signed a new five-year contract that took effect Jan. 1, Kelleher is at an age usually associated with retirement. At a company so wholly a reflection of one man's personality, the future of Southwest may depend on preserving Kelleher's zest, an elixir for the inevitable day he is no longer there. If he can't be immortal, at least his spirit can still be floating around.

THIS IS HOW SOUTHWEST AIRLINES WAS BORN: HERB KELLEHER, bored with the tedious gentility of his San Antonio law firm, sat down at a bar in 1966 with a client, Rollin King, a prominent banker and pilot who ran a small charter airline ferrying hunters around Texas. As the drinks flowed, King chattered enthusiastically about PSA, then a California carrier that was shaking up the market with short, low-cost, intrastate flights.

Grabbing a cocktail napkin, King sketched out a triangle, its three corners representing Dallas, San Antonio and Houston. If they could duplicate PSAUs formula--avoiding the federal regulations of that era by never crossing state lines--King's little charter company might just grow up into a commercial airline.

"Rollin, you're crazy," Kelleher said. "Let's do it."

Well, maybe it didn't happen in a bar, and maybe Kelleher didn't exactly utter those words. Southwest tends to mythologize its past, repeating such legends like folk tales. But this much is true: Southwest entered the world with the odds undeniably stacked against it. Texas' other airlines--interstate carriers subject to federal price controls--refused to be undercut in their own backyard. For three years, they battled to keep Southwest on the ground, snaring the nascent airline in a legal morass that drained its start-up money and demoralized its investors. But Kelleher, acting as the company's attorney, clawed all the way to the U.S. Supreme Court and won the right to compete for a slice of Texas' skies. His struggle infused Southwest with an underdog's drive that guided it through some tough years it otherwise might not have survived.

There was the time, shortly after Southwest began service in 1971, that financial setbacks forced the company to sell off one of its four planes. To avoid layoffs, the crews simply hustled twice as fast between flights, keeping the same schedule with less equipment and creating a model of efficiency that remains the standard today. Not long after, Braniff tried to muscle Southwest out of the Texas market by offering $13 flights, half the going rate. Southwest not only matched that but offered a puckish alternative: For the full $26 fare, customers would be entitled to a free fifth of liquor. Overnight, Southwest became the top Chivas Regal distributor in the state.