The History and Evolution of Southwest Airlines

Southwest Airlines, headquartered in Dallas, is a publicly held airline that began with an initial tendering of 650,000 shares offered at approximately $11 a share beginning on June 8, 1971. At inception the company only operated intrastate as a Texas airline establishing itself as a high frequency, high volume, low-fare, point-to-point carrier. Southwest in 1971 became the first U. S. carrier to introduce a profit-sharing plan for employees. As of April 2022 Southwest operated commercial flights to 106 domestic destinations with fifteen international destinations, including Mexico, Central America, and the Caribbean. 

Before 1967, when it was incorporated, the company was known as Air Southwest.  Rollin King, entrepreneur and cofounder of Southwest, served as the airline's first chairman, president, and chief executive officer, and he was for many years the company's largest shareholder. A licensed pilot who obtained an M.B.A. from Harvard University in 1962, King had moved to San Antonio to become a partner in the newly-formed investment-counsel firm King, Pitman and Company. In 1964 he acquired and reincorporated as Southwest Airlines, Incorporated, a small air-taxi service called Wild Goose Flying Service, which did business as Southwest Airlines between San Antonio and such small South Texas cities as Del Rio and Laredo. Though Wild Goose was never profitable, it was the seed for the present airline. In 1967 King met with Herb Kelleher to discuss a new business venture. Kelleher was a young attorney, a transplanted Yankee who sank his roots into his wife's hometown, San Antonio, and King was his client. The venture King proposed sounded a lot like his old business but with a slight twist. Instead of flying to small towns, King suggested serving the three largest cities in Texas—Houston, San Antonio, and Dallas—by offering low fares, convenient schedules, and a "no-frills" approach that was completely contrary to the standards of the established airlines. A legendary story recalled that the two men met at a San Antonio restaurant and bar and ordered drinks to plot their aviation venture. The plan was supposedly drawn on a napkin, and, at Southwest headquarters, the story was commemorated on a plaque duplicating the napkin on which King drew the proposed route system. Before his death, King admitted no napkin was involved, but it made a “hell of a good story.”  

Service between these cities had been provided by Braniff Airways and Trans-Texas Airways (later Texas International Airlines), but usually as a leg of longer, interstate flights. Kelleher thought King was crazy but, after doing some homework, decided that he was just crazy enough to go along with the plan. King convinced his banker, John Parker, of the Alamo National Bank in San Antonio, to conduct a feasibility study for an airline that would serve the market at a time when the three cities involved were among the fastest growing in the nation. An independent marketing consulting group, hired with $150,000 donated by seven of their San Antonio friends, helped to convince King and Kelleher of the project's viability.

In 1967 a new airline, Air California, had made an initial public offering before the company had actually started flying. This provided the model for King and Kelleher, who used Air California's investment bankers and two of its founders to raise money for Air Southwest. Kelleher, who had been John B. Connally's Bexar County campaign manager in his 1962 race for governor, found other investors in Texas. A second group of shareholders, who bought $3 shares up to a limit of $25,000, included some of the best-known men in Texas, including John Murchison, brother of Clinton Murchison, Jr., of the Dallas Cowboys; Democratic party leader and future Russian ambassador Robert S. Strauss; future governor Dolph Briscoe; University of Texas Board of Regents chairman John Peace; Houston oilman Pat Rutherford; and Dresser Industries executive Charles Kuhn. The company was incorporated as Air Southwest on March 15, 1967, with King, Kelleher, Peace, Murchison, Kuhn, and Strauss as its first board of directors. The group received an additional pledge of $2 million in common stock and a $3 million commitment from Sears and Roebuck's venture-capital fund after Wilber Morrison of Pan American Airlines persuaded the Sears investment committee to support the project. Although the deal with Sears never quite worked out, Morrison was so convinced of Southwest's potential that he later joined the airline's board of directors. In November 1967 Kelleher filed an application with the Texas Aeronautics Commission to serve Dallas, Houston, and San Antonio. The application was a state, not a federal, matter because Southwest did not propose flying out of state; therefore, it had not fallen under the regulatory tentacles of the Civil Aeronautics Board (CAB).

On February 20, 1968, the  Texas Aeronautics Commission (TAC) voted unanimously to grant Air Southwest a Certificate of Public Convenience and Necessity that would allow it to begin service only within the boundaries of the state of Texas. The following day, however, Braniff, Trans-Texas, and Continental Airlines obtained a restraining order from the Travis County District Court that temporarily prohibited the agency from issuing the certificate. Thus began a three-year legal battle with competitors that wanted to keep Southwest on the ground. Kelleher led Southwest's legal fight but lost the first round in Austin State District Court, which found that the three cities Air Southwest proposed to serve already had sufficient air service. Kelleher appealed to the Third Court of Civil Appeals, which, seven months later, upheld the lower court's decision. The investors were ready to admit defeat, but King and Kelleher were not. Offering to hold off on charging legal fees until such time as the company had adequate funds, he agreed to pay all court costs and expenses out of his own pocket. Kelleher filed an appeal with the Texas Supreme Court; to everyone's surprise, by unanimous vote the Supreme Court overturned the lower court's ruling. The battles raged on for Air Southwest, however. Two went as high as the United States Supreme Court, which ultimately upheld Southwest's right to fly in Texas. December 7, 1970, the date of the Supreme Court decision, is considered by many to be the beginning of deregulation in the airline industry. Legal deregulation, however, promoted by various airline executives and implemented during President Jimmy Carter’s administration, became law in 1978.

In 1971 Air Southwest became Southwest Airlines. In January, King and Kelleher hired Marion Lamar Muse, the former president of Detroit-based Universal Airlines and an alumnus of Trans-Texas Airways, American Airlines (see AMR CORPORATION), and Southern Airways, to run Southwest, which had $148 in the bank and past-due bills for more than $133,000. Faced with starting an airline virtually from scratch after much of its original investment had already been used to pay expenses, Muse called on his industry resources to raise capital. Kelleher also took a stake in the company. In just 120 days the company hired and trained pilots, flight attendants, mechanics, and other personnel; completed negotiations for space at three airports; hired Bloom Advertising to design an initial campaign; and completed the purchase of three Boeing 737–200 aircraft. King, Kelleher, and Muse were able to purchase the planes at 90 percent financing, a move previously unheard of in the industry. Muse, an accountant by training, and Rollin King made the decision to fly one type of aircraft to streamline pilot training and to create a somewhat uniform maintenance program that fiscally benefited the company. The two met with McDonnell-Douglas Aircraft Company when considering the purchase of the DC-9 jet aircraft. Muse and King made a feint-styled phone call to Boeing Company and stated that Boeing had one hour to make a deal or lose to McDonnell-Douglas. Boeing offered three Boeing 737-200s with the possibility of a fourth 737. The deal, completed with no money down, proved a victory for the ever-maneuvering Muse. The total cost of each aircraft at $4 million included a total monthly payment of $150,000 for sixty months with a balloon payment after five years. Southwest hired pilots from the failing Purdue Airlines. However, these pilots flew the DC-9; therefore, the airline paid to train their new hires to fly the Boeing 737 at the Denver-based United Airlines training facility. As retired thirty-year-captain Brent Landry stated, “Everyone used to make fun of that ugly orange airplane.” But Herb Kelleher would always say, “Yeah, but it turns green when it goes to the bank.” 

 Plans to raise additional money through an initial public offering just before service began were interrupted by yet another battle. Braniff and Texas International (see TEXAS AIR) complained to the Civil Aeronautics Board that Southwest's operation might violate its intrastate exclusivity. Kelleher moved swiftly to argue the Southwest case. He flew without a change of clothes from San Antonio to Washington, where he pleaded before the CAB for several days in his rumpled business suit. Back in Dallas, and only two days before Southwest's scheduled inaugural flight, word was received that the CAB had thrown out the objections of Braniff and Texas International. But almost in the same instant, it was learned that the two carriers had won a restraining order barring Southwest from beginning service. The order was issued by the same Austin judge who issued the original injunction against the TAC decision. Kelleher immediately flew to Austin, where the Texas Supreme Court held an emergency session to hear the case, voided the injunction, and forbade the judge from involving himself with Southwest again. On June 18, 1971, a Southwest Airlines plane flown by Capt. Emilio Salazar began service out of Love Field.

Southwest was only five months old when Muse came out with an unbelievable fare offer—$10 on the last flight of the week from Houston to Dallas. The plane was needed back in Dallas anyway for weekend servicing, and the crew had been ferrying it back empty every week for five months. Within two weeks, the flight was carrying a full load, and Southwest never advertised. Muse then slashed fares on the last flight of each day in each direction to $10. That meant anyone flying Southwest after 7:00 P.M. on any day of the week needed only a $10 bill to board. By the next fall, Muse had raised regular fares from $20 to $26 and the weekend and night fare to $13. The two-tier fare system, one of the most important innovations in airline marketing history, had been born. The larger airlines, however, were not finished with their fight against Southwest. Braniff lowered its Dallas-Houston fare to just $13. In an action that became characteristic of the airline, Muse responded with newspaper advertisements claiming, "Nobody's going to shoot Southwest Airlines out of the sky for a lousy $13," offering customers their choice of either a $13 fare or a full-fare ticket plus a fifth of premium liquor. The bottles of liquor did not cost $13, but a businessman could put the $26 fare on his expense report and take the liquor home free. Once again, a Braniff tactic backfired. With 80 percent of its customer base choosing to pay full fare, Southwest won this 1972 fare war and became the largest distributor in Texas of Chivas, Crown Royal, and Smirnoff. Braniff and Texas International were later indicted and pled nolo contendere to antitrust charges in connection with their activities involving Southwest.

To enhance the company's image further, Muse began a marketing campaign that clad stewardesses in hot pants and advertised the company as the "LUV" airline, a pun on its home base at Love Field. In 1977 Southwest listed its stock on the New York Stock Exchange under the trading symbol LUV. Southwest turned a profit in 1973 and  remained profitable for forty-seven years as of January 2020. Nevertheless, one of the line's longest court battles began in 1972, when the new Dallas-Fort Worth Regional Airport (now Dallas-Fort Worth International Airport) and the cities of Dallas and Fort Worth sued Southwest in an attempt to force the carrier to move with other airlines to the new airport. The other airlines were bound to the move by contracts, signed in accord with the 1968 Regional Airport Concurrent Bond Ordinance; however, Southwest, not an operating signatory at the time, intended to stay at Love Field because of its proximity to downtown Dallas. Two years later, Southwest won the privilege to remain at Love Field as long as the field was a commercial airport. Despite this ruling, the controversy continued. In April 1974 the Dallas City Council attempted to close Love Field to commercial traffic, but once again court rulings enabled the airport to survive. Still, the  larger airlines were not legally through with Southwest.

In 1978, in an attempt to curb Southwest's growth, the major airlines at DFW sought support from Congress to bar flights from Love Field to anywhere outside of Texas. Finally, in 1979 a compromise known as the Wright Amendment (named after majority leader Jim Wright, D-Fort Worth) was ratified. This measure limited service from Love Field to Texas and the four surrounding states, Arkansas, Louisiana, Oklahoma, and New Mexico. The Wright Amendment hampered Southwest's growth from Dallas Love Field, but it did not prevent the carrier from succeeding. Southwest simply grew in other directions. The Wright Amendment continued to be a controversial issue. Congressional representatives from districts not served by Southwest introduced legislation to repeal the act in hopes of bringing nonstop Southwest service and low fares to states that did not border Texas. Other major airlines opposed repeal of the Wright Amendment. American Airlines president Robert Crandall openly lobbied Dallas mayor Steve Bartlett against repeal, and Fort Worth threatened to sue Dallas if the latter even discussed repeal. During the interim years before the repeal Southwest's low fares continued to attract customers and forced other airlines to discount their fares.

King resigned as an officer of the company in 1976 but remained on the board of directors and flew the line for two years as a captain. While Muse was widely known for his brilliance at Southwest Airlines in the positions of CEO and president from his leadership in 1971, he left in 1978 after a corporate dispute with co-founder and chairman Rollin King. Kelleher was asked to run the airline on an interim basis until a new president and CEO could be hired. Kelleher was appointed chairman of the company. In August 1978, Howard Putnam, a United Airlines executive, was hired as president and CEO. Putnam subsequently left in September 1981 to take over the ailing Braniff Airways. At that time, Kelleher left his San Antonio law firm for good and began running Southwest full-time. He was named permanent chairman, president, and chief executive officer on February 23, 1982.

Kelleher, a larger-than-life executive, became beloved by his employees. He represented one of the first disruptive, change-driven leaders that placed his employees first because he had learned from his mother that customers would be well-served by innovative, engaged, and happy employees. Kelleher and his colleagues identified the “Eight Freedoms” that characterized the culture inside the airline exemplified by the “freedom to learn and grow,” the “freedom to create financial security,” and the “freedom to create and innovate.” When the skies became affordable and democratized for average Americans, Southwest had succeeded. Kelleher saw record growth as the carrier entered new cities and forced existing carriers to lower their fares. “The Southwest Effect” occurred so often that federal officials dubbed this a natural phenomenon of Kelleher’s business plan.

Because of the Airline Deregulation Act of 1978, which permitted competition on routes across the country that were previously virtual monopolies, Southwest again expanded. From July 1981 until November 1982 the country suffered through a recession with high inflation and high unemployment, and in 1981 a major air traffic controllers strike shocked the whole industry. As airlines fought for market share, many with existing financial problems filed for bankruptcy or merged with larger better-managed airlines by the late 1980s into the 1990s. However, Southwest prospered without reductions after deregulation under Kelleher’s management strategies. He led the airline into an overall efficient profitable “flying machine.” While the major carriers remained tethered to hub and spoke method of service, meaning a central airport from which flights emanated, Southwest instead flew to both large metropolitan cities as well as underserved cities using direct flights and often bypassing larger airports. Passengers used recycled plastic boarding passes in sequential numbers allowing passengers to board according to their check-in times, all without assigned seating. Their optimal gate time between flights totaled about ten minutes with takeoff as soon as possible. Other carriers took thirty minutes or longer between flights to accomplish servicing the aircraft, boarding the passengers, and preparing for takeoff. Future low-cost airlines mimicked Southwest strategies that saved money and time.

By the end of 1981 the airline had added service to Amarillo, New Orleans, Albuquerque, Oklahoma City, Tulsa, and thirteen other cities. In early 1982 Southwest added service to San Diego, Kansas City, Las Vegas, and Phoenix—its first service to cities outside of Texas and the surrounding states. Of course, in compliance with the terms of the Wright Amendment (repealed in 2014) direct service to these cities was not available from Dallas Love Field. Since 1982 the airline has grown substantially, generally by taking advantage of opportunities in markets that were overpriced and underserved. By the late 1980s Southwest had become the number-one airline in California, and in 1989 it officially became a "major" airline, with annual revenues exceeding $1 billion. While the airline had abandoned the hot pants/go-go boots uniforms for a more traditional but casual look, the hostesses (flight attendants) continued with the Love (Luv) tradition of marketing by passing out lollipops when smoking was banned on domestic flights lasting less than two hours in 1988. By 1990 smoking ceased on all domestic carriers, and hostesses entertained passengers with Christmas carols inflight. With the inauguration of service to Baltimore Washington International in 1993, Southwest served both coasts for the first time. The acquisition of Salt Lake City-based Morris Air at the end of 1993 facilitated Southwest's expansion into new cities in the West and Northwest. By 1994 it served forty-one cities in nineteen states, including eleven airports in ten Texas cities, and had plans for major expansion .

In the late 1980s and early 1990s, Southwest lobbied against a proposed high-speed train between Dallas, Houston, and San Antonio. Studies showed that the train would require government subsidies of close to $100 per passenger. Since all of Southwest's fares between those cities were well below $100, the company claimed that with the same subsidy, it could fly everyone in those markets for nothing. Although a contract to build the train was awarded to Texas TGV, the company was unable to raise even a fraction of the start-up funds it required, and it ultimately defaulted on its contract. As of 2020 the Texas Central Railroad (TCR) received authority from the Federal Railroad Administration to build a high-speed train connecting Houston and Dallas that would take ninety minutes and be operational by 2026 according to TCR. However, several obstacles remained as to an actual construction date. As of 2022 outcomes of any discussions of the impact to airlines that service the Houston-Dallas route remained undetermined.   

Southwest has maintained a high level of public recognition through innovative advertising and public relations. Kelleher painted Southwest planes to resemble the Texas and Arizona state flags and Shamu, the killer whale, to promote the airline's association with those states and with Sea World in San Antonio. The company also staged a famous arm-wrestling contest between Kelleher and the president of Stevens Aviation, Incorporated, of Greenville, South Carolina, to settle a dispute over rights to the advertising slogan "Just Plane Smart." While avoiding a high-cost court battle, the two companies agreed to a much-publicized match in Dallas to settle the dispute. Kelleher lost, but Stevens allowed Southwest to share the slogan anyway. By the early 1990s Southwest had grown to be the nation's seventh-largest airline, with more than 35 million customers a year, annual revenues exceeding $2 billion, and more than 15,000 employees in a largely unionized workforce. Although it owned under 3 percent of the nation's airline market, more than two-thirds of passengers flying in Texas did so on Southwest. With a highly developed corporate culture, which emphasized that work can be fun, with employee stock options totaling about 10 percent of shares outstanding, and with a no-layoff policy unheard of elsewhere in the airline industry, Southwest was named one of the top ten companies to work for in America. Southwest was the only major airline in 1990 and 1991 to make a net operating profit, and in 1992 and 1993 it received the industry's "Triple Crown" for best on-time performance, least lost baggage, and fewest customer complaints—thus accomplishing for two years straight something no other airline had ever done, even for a single month.

Kelleher stepped down from his CEO and president positions in June 2001. He remained chairman of the board until 2008. On June 18, 2001, the airline celebrated its thirtieth anniversary, and the next day, James “Jim” F. Parker, fifty-four, replaced Kelleher. Parker, the vice president-general counsel began his tenure at Southwest in 1986, and he assumed the title of both president and vice chairman. A University of Texas School of Law graduate, he had worked the drive-thru at Sandy’s Hamburger Stand in Fort Worth, and the best advice he received included catching “more flies with honey than with vinegar.” He had practiced law in San Antonio and had served as Texas’s assistant attorney general. Recognized by Fast Company magazine as Best of the Best, Fortune also acknowledged him in People to Watch in 2002.   

Colleen Barrett , fifty-six, who had been with the airline since 1978 took the title of president and assumed the role of the airline’s first chief operating officer. The duo of Parker and Barrett jointly ran the company and assured Wall Street and the flying public that nothing would change the operation of the successful airline. Barrett became the first female to attain the title of president of a major airline. The once legal secretary worked at Kelleher’s law firm and rose to an executive position in charge of customer relations at Southwest. She described her past as coming from “a poor little family that never had much.” Barrett became a trusted and integral link in the chain of successes she and Kelleher had achieved together. She attributed her rise to Kelleher’s egalitarian views that all team members ranked the same and were treated equally. At the time of this succession Southwest reigned as number seven in the industry after twenty-seven years with no union strikes in a company where 85 percent of the employees participated in unions. The company earned about $5.6 billion in sales in the year 2000, with $603 million in net income. Those that held Southwest stock profited because the airline topped the industry as the best-performing stock from 1972 through 2002. Chairman Kelleher remained highly engaged with critical government affairs, aircraft purchasing, strategic planning, and system scheduling.

The Parker and Barrett duo maintained the Kelleher business plans until the terrorist attacks of 9/11 (September 11, 2001). The technology financial crash of 2000 had already impacted the airlines, and the attacks temporarily grounded the aviation industry and accelerated the bankruptcies of four major airlines. Since the late 1970s Parker had been Kelleher’s main negotiator with the highly unionized airline. He now faced rising union issues with various employee groups that led to escalating strife as several contract negotiations ensued with management at a difficult time when airlines depended heavily on cash flow and growth. Southwest, however, avoided most of the troubles that plagued its competitors after 9/11 and remained the only major airline that protected its employees’ jobs. The company’s market cap quickly exceeded its combined competitors. Barrett, referred to as “Mom” by the employees, relied on her belief system to work through the troubled times. She emphasized patriotism and the overall care of the employees, with a strong belief in the Golden Rule of treating people as one would want to be treated, as the key element to the success of the airline. Southwest advertised after 9/11 before the other airlines. On September 14, 2001, Southwest Flight 145 departed from Nashville, Tennessee, with forty-nine passengers. Southwest’s 33,000 employees at that time committed to “keep America flying.” To that date the skies had remained empty apart from military and first responder flights. The newly-organized Transportation Security Agency system, created to provide safety for airlines and their customers, adopted numerous security measures that brought fundamental changes to the whole travel experience. Overall, flying as a “customer event” became tedious and time consuming when 9/11 forever changed the rules of travel because of recurrent security issues.

During the aftermath of the attacks, Parker reflected, “We didn’t have time to do an economic analysis to figure out what the effects would be.” The airline offered refunds to customers, although the company was surprised that few wanted them, with stalwart fans sending envelopes with cash to the company. No employees lost their jobs, and Southwest also contributed $179 million to the scheduled employee profit-sharing plan during the wake of the attacks. The airline realized a fourth quarter profit in 2001. In the wake of 9/11 Barrett shepherded employee buyouts and suggested flight cuts in the system. She also pressed for technological advances, and in 2002 the airline introduced self-service check-in-kiosks. In 2004 online boarding passes became available. During her tenure from 1986 to 2008 she served as a member of the board of directors, corporate secretary, vice president administration, executive vice president customers, president and chief operating officer. Parker resigned in 2004, after guiding the airline in a post-9/11 world and negotiating with the Southwest unions. During his leadership Southwest’s honors included recognition as one of America’s 100 best corporate citizens, one of the top three most admired companies, and worldwide airline of the year. 

Gary C. Kelly, a lifelong Texan and graduate of the University of Texas, began his career at Southwest Airlines as controller in 1986. Kelly assumed the role of CEO and  vice chairman after James Parker resigned in July 2004. By 2008 he served as chairman and president after Colleen Barrett resigned and became president emeritus. Kelly had worked as a CPA for Arthur Young & Company in Dallas and as controller for Systems Center, Inc. before joining Southwest. Beginning in the 1990s he helped develop the airline’s fuel-hedging program that allowed advanced fuel purchases at a fixed price. The move spared the airline from the spiking fuel costs that plagued the aviation industry, especially in the post 9/11 business environment. He forged through the economic downturn of 2008–09. Kelly advanced the airline with major adjustments that reflected a new era for Southwest by changing with the times without damaging the overall corporate culture of the company. He stewarded the acquisition of AirTran Airways, the launch of service to Hawaii, the advent of international destinations, and the startup of an advanced reservation system. The acquisition of AirTran expanded the route system to the foreign destinations in Central America, the Caribbean, and Mexico. Kelly launched a campaign to rid Southwest of any destination restrictions, and on October 13, 2014, the Wright Amendment ceased as Congress repealed the act that had limited flights leaving Dallas Love Field for thirty-five years. Because of this ruling Southwest could schedule non-stop flights from the airport to any destination in the United States.

In 2016 the union representing the pilots expressed a no confidence vote on Kelly’s leadership. Eventually the company settled the grievance. In January 2017 Kelly relinquished the title of president and named former Southwest board member and executive Thomas “Tom” M. Nealon as president. Kelly completed transitioning to the reservation system, Amadeus, and oversaw the introduction of the Boeing 737 MAX 8 into the airline’s fleet.  Southwest maintained a superior level of safety throughout its history, with only a single passenger fatality in 2018 after a fan blade detached from an aircraft engine and penetrated a window. During the first quarter 2019 the airline canceled more than 10,000 flights since mid-February because of the grounding of the 737MAX by the FAA, in addition to inclement weather, and a long-disputed contract with the mechanics union.   

By 2020 the aviation industry suffered drastic changes in their operation and total revenue generated. The COVID-19 Pandemic negatively affected the U. S. economy with the aviation industry suffering inordinately as people quit flying. American, Delta, United, Southwest, JetBlue, and Alaska Air lost $30.4 billion in 2020. The U. S. government supported the airlines with $50 billion, yet the losses had continued. Southwest Airlines suffered its first loss in forty-eight years. Southwest reported it lost a record $3.5 billion in 2020, excluding special items, forcing the airline to ground many of its jets. From a successful 2019 into 2020 the airline suffered a 97 percent drop in traffic. Kelly executed a plan of recovery. Along with other airlines, Southwest accepted aid from the $2 trillion bailout under the CARES Act that Congress authorized during the Pandemic. Kelly slashed spending while simultaneously planning for growth. Southwest competitors abandoned certain markets while Kelly opened new destinations associated with hubs at Chicago O’Hare International Airport, Miami International Airport, and George Bush Intercontinental Airport at Houston. Obtaining landing slots abandoned by other carriers played a crucial component when adding new destinations and helped the Southwest’s recovery. By 2021 further COVID-19 directives from the federal government challenged Kelly. Southwest became fully engaged in promoting and complying with vaccine mandates after President Joe Biden’s executive order compelled federal contractors to be vaccinated by December 8, 2021. Kelly did not believe that mandate initiatives were a proper response; however Southwest complied with federal directives and mandated vaccination, with certain allowable exemptions, for its 56,000 employees. The pilots union filed a lawsuit to prevent the mandated injection. Their efforts proved futile as a federal judge denied them relief and blocked their suit.

By June 18, 2021, on the fiftieth anniversary of the low-cost airline, Kelly emphasized that Southwest had never experienced employee layoffs. However, the  summer and fall travel season of 2021 proved tumultuous for Southwest, with numerous flight cancellations, flight delays, unhappy pilots, overworked flight attendants, disgruntled mechanics, employee shortages, unruly passengers, and an overall sense by the employees that the LUV culture had not withstood the repercussions of the ubiquitous COVID-19 pandemic. The airline management apologized to its employees and to its customers. Some of the unions expressed their unhappiness with working conditions.   

Effective February 1, 2022, Robert “Bob” Jordan assumed the role of CEO and joined the board of directors. Jordan, the airline’s sixth CEO, joined President Tom Nealon and COO Michael G. Van de Ven as part of a three-member team leading the airline into a post-pandemic business environment. In September 2021 Nealon suddenly retired as president. Van de Ven became president and retained the position of COO, with Nealon staying as an advisor. Van de Ven graduated from the University of Texas at Austin and served on the McCombs School of Business Advisory Council. Coming from Ernst & Young in Dallas, he joined the carrier in 1993 and over the years held numerous vice-presidential positions and led numerous departments at Southwest Airlines.

Jordan’s history with Southwest began in 1988 as the director of revenue accounting.  A graduate of Texas A&M University, he had worked as a financial analyst and programmer at Hewlett-Packard before his tenure at Southwest. Over the years he held various vice president positions, and during his tenure, he assisted in the acquisition of AirTran Airways, the development of the new Southwest.com e-commerce platform, the Rapid Rewards loyalty program, and an enhanced boarding process. Jordan headed the voluntary leave and early separation programs to reduce the airline’s expenses during the pandemic.

As 2022 began the industry hoped for a post-pandemic business environment but quickly realized that it represented a transition period. A commitment to Southwest’s open seating, no bag fees, and no change fees remained as policy to benefit customers.  Jordan’s over-arching goals focused on “loving” the employees, replacing the 5,000 employees that opted for early retirement (2020–21), and raising salaries that expressed a market-driven economy. Jordan emphasized the importance of returning the airline to sustained profitability and operational reliability. Southwest showed the first post-pandemic profit during the fourth quarter of 2021 without federal government support. The airline faced hurdles such as higher fuel costs, demands for higher salaries, struggles to find employees, high tech issues, and schedule reliability due to staffing challenges. At that time the airline’s complement of Boeing 737s stood at 730 with a goal of ramping the fleet to about 1,000 jets. Fortune magazine listed the airline as one of the most admired companies in the world and ranked it twenty-eighth in 2022. However, the airline struggled with unhappy employees that continued questioning the validity of the federal contractor vaccine mandate. An injunction issued by a federal judge halted the mandate. As of April 2022 an Atlanta-based federal appeals court remained unclear as to the government’s authority to mandate a vaccine for employees of federal contractors.  The airline, however, had directed that all new hires must have proof of vaccination. Therefore, this issue continued as a wedge between management and some employees.  As of June 2022 the courts had not settled the issue of federal contractor vaccination mandates.      

Southwest announced new destinations for the 2022 summer schedule. Beginning in June service commenced between Austin and Cozumel, (subject to government approvals); Nashville and Portland, Maine; Denver and Eugene, Oregon; Denver and Amarillo; Denver and Lubbock; Denver and Midland/Odessa; Houston and Louisville, Kentucky; Chicago and Montego Bay, Jamaica; Chicago and Rochester, New York; and Chicago and Tulsa, Oklahoma. Southwest resumed several international nonstop routes from cities across the nation. Jordan envisioned 2022 as a “rebuilding” year for the carrier at a time when the labor market was tight and staffing the airline remained a challenge.  

Southwest Airlines has conducted extensive charitable efforts. The Southwest annual "Home for the Holidays" program, which received the President's Award for Private Sector Initiatives for 1986 and 1987, enabled thousands of poor senior citizens to visit friends and relatives during the Christmas season at no charge. The Southwest Airlines Medical Transportation Grant Program provides medical treatment. Since 2007 the carrier has offered free transportation worth more than $42.6 million to 117 nonprofit hospitals in twenty-eight states. In 2014 the company donated $20 million in cash and in travel to qualified nonprofit organizations with employees completing 144,596 volunteer hours. During 2022 the airline donated $4 million for the transportation of those needing medical care. As of 2022 Southwest was a continuing supporter of the Ronald McDonald Houses, which provides a home-away-from-home for families of critically-ill children who are undergoing treatment at nearby medical facilities. Through a six-year joint relationship with Project for Public Spaces, Southwest Airlines Heart of the Community grant program provides grants for the improvement of public spaces in the “heart of cities” served by the carrier. The airline also supports both active military and veterans through donations to organizations that benefit the men, women, and families of all branches of service. Southwest also assists victims of floods and other disasters.  Environmentally the airline set 2050 as the date of carbon neutrality by launching a sustainability plan.