Sunday 24 February 2019

Chain-smoking and bourbon-drinking pioneer transformed the aviation sector

Saturday Insight

Southwest Airlines founder Herb Kelleher died this week at the age of 87. His low-fares airline model transformed the airline industry and spawned copy-cats around the globe, including Ryanair. Photo: Reuters
Southwest Airlines founder Herb Kelleher died this week at the age of 87. His low-fares airline model transformed the airline industry and spawned copy-cats around the globe, including Ryanair. Photo: Reuters
John Mulligan

John Mulligan

Herb Kelleher, who died this week at the age of 87, is credited with kick-starting a global low-cost air travel revolution.

The founder of Texas-based Southwest Airlines, the aviation pioneer with Irish heritage was ahead of his time when he established the carrier almost half a century ago.

It would spawn another major success - Irish low-cost airline Ryanair, which adopted and refined Southwest's model to become a powerhouse of world aviation.

Mr Kelleher's persona as a chain-smoking sipper of Wild Turkey whiskey fit Southwest's creation story: he and Texas businessman Rollin King used a cocktail napkin in 1966 to sketch a plan for flights in a triangle of Houston, Dallas and San Antonio.

Their formula of short, frequent, no-frills trips spawned dozens of imitators, made Southwest the largest US carrier by domestic traffic, and led to an annual profit streak dating to 1973.

Up until at least 2012, Mr Kelleher was still smoking his way through 40 cigarettes a day.

In 1999, when he was diagnosed with prostate cancer, investors and analysts pressed Southwest for a succession plan. After eight weeks of radiation treatment, he proclaimed himself fit, though he wasn't giving up cigarettes.

"I don't smoke with my prostate," he said.

Born in 1931 into a middle class Catholic Irish-American family - he reckoned his paternal grandparents were most likely from either Cork or Kerry - Mr Kelleher grew up in the New Jersey suburb town of Audubon.

"I'm Irish on both sides, mom was a Moore," he told the Irish Independent in a 2012 interview.

"I like to think that we've had that particular Irish ebullience in us - along with that egalitarian streak which means we're not impressed by titles or position."

His dad was a supervisor at the Dorrance family's Campbell's soup plant.

"Soup did well in the Great Depression. Everyone was gobbling it given that it was tasty, nourishing and affordable," recalled the aviator.

In college he took English and originally had designs on being a journalist. In the end he took "the sensible route" and became a lawyer.

Shortly after getting married to Joan Negley in 1955, they travelled to her home town of San Antonio to follow the state's booming law opportunities and set up a practice.

"The first thing I noticed about Texas is that enterprise was promoted and encouraged there and the people weren't afraid of thinking big," he told the Irish Independent.

"Most of them weren't long in the oil money and they didn't think anything of gaining a fortune, losing it again and then regaining it," he recalled. One of his Texas clients from those days was the colourful Rollin King, who called him for a meeting one day in the St Anthony Club in the hotel opposite his law offices.

"Rollin was running a small, third-level carrier on short-haul routes out of Twin Beach," said Mr Kelleher. "He'd been talking to his banker John Parker who had been using Pacific SW, a regional airline in California, and was impressed with the quality of the service.

"Parker told Rollin that he thought he ought to try and start something like that in Texas. The state was large enough and its cities geographically separate enough to support the idea. Of course I was a little sceptical at first."

It would be 1971 before Southwest got into the air after legal battles with incumbents.

"We didn't just ruffle their feathers, we stripped them right off those birds," he said.

The success of Southwest in the years that followed would see it act as a template for Ryanair.

Southwest operated just one class and no assigned seats, one aircraft type - the Boeing 737 - turned its aircraft around in 20 minutes and had no on-board meals. Mr Kelleher and Southwest's Colleen Barrett created a fun culture for Southwest employees, whose affinity for the airline prompted them to go the extra mile for customer service.

In 1987, Ryanair - then a tiny, full-service carrier battling State-owned Aer Lingus and other dominant carriers - was failing and close to collapse.

Its founder, Tony Ryan, asked his then 26-year-old accountant Michael O'Leary (who would become Ryanair CEO in 1994) for his thoughts on turning the airline around. The outspoken airline chief famously told the late Mr Ryan that he should shut it down.

But Mr Ryan despatched Mr O'Leary to Dallas to find the secret sauce at Southwest and to see if it could be sprinkled over Ryanair.

"Herb more or less invented this business - credit where credit is due," Ryanair chairman David Bonderman told the Irish Independent in a 2015 interview.

"I happened to be in Texas at that time and we were familiar with what they (Southwest) were doing. One of Michael's first acts was to go out to Texas and look at what Herb was doing. He came back as a co-religionist."

A quarter of a century later, Herb Kelleher also clearly remembered Mr O'Leary's visit to the Lone Star State.

"Tony was an old friend of mine and I talked to him on and off about a lot of things," he recalled.

"I knew he had an airline - Ryanair - and I knew things weren't right with it. So Michael arrived in Dallas and my first impression was that he was obviously a very bright and intelligent guy. He was very intense about his questioning I recall.

"There was no doubt that this guy was totally focused and on a mission.

"We went out to dinner and there was a lot of, how you'd say... intoxicating liquids consumed."

In Paul Kilduff's book 'Plane Speaking', Mr O'Leary recalls his own version of his US epiphany with characteristic colour: "We went to look at Southwest Airlines in the US. It was like the road to Damascus," he said.

"This was the way to make Ryanair work. I met with Herb Kelleher. I passed out about midnight and when I woke up again at about 3am, Kelleher was still there, the *******, pouring himself another bourbon.

"I thought I'd pick his brains and come away with the Holy Grail.

"The next day I couldn't remember a thing."

This week, Mr Kelleher's role as an aviation pioneer was remembered by leaders across the sector.

In a statement yesterday, Mr O'Leary described him as the "Grand Master Yoda" of the low-fares airline industry.

"His stamp on the airline industry cannot be overstated," said Southwest chief executive Gary Kelly.

"His vision for making air travel affordable for all revolutionised the industry, and you can still see that transformation taking place today."

Irish Independent

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