Southwest Airlines the Airline Industry Has Been

Southwest Airlines

The airline industry has been one that has consistently lost money during the last decade. Even before that, if an airline did not have a good business strategy, they were most likely doomed to failure. Many people do not remember Braniff, TWA or Pan American, but for a long time they were among the largest air carriers in the world. He present model, for airlines as well as other businesses, is to determine what they can do to streamline their costs, and the costs to their customers, while still remaining profitable. This may seem like what companies have always done, but that has not been the case. When the economy is doing well customers do not care as much about pricing and carriers offer more for the price of a ticket. Unfortunately this balance has been destroyed by the economic downturn, and many businesses have not been able to survive.

There are some that have either learned the lesson of survival, or they were able to continue a business model that was consistent with the equilibrium that has been established since the crisis. Southwest Airlines has always prided itself on the fact that it is a low-cost alternative to the big name international airlines. Southwest started as a regional carrier and has become successful nationally because they have maintained a pricing strategy that is consistent with the way customers now behave. Like businesses such as Wal-Mart and thrift stores, the low-cost alternative has become the industry reality. Southwest has been able to grow its business through this economic period because of savvy decisions that were made decades ago. With new initiatives (that are actually old ones repackaged) such as "bags fly free" and new ones such as hedging fuel costs, Southwest Airlines has been able to thrive at a time when other airlines are at the brink of bankruptcy. This paper details the culture and values that have made Southwest one of the more revered and copied companies in the United States.

Background

History

Southwest Airlines is an air carrier that specifies low cost travel for all of its patrons. The carrier serves the continental United States with non-stop service to and from all of the airports it serves, and it guarantees that air fares will be the lowest non-stop fares of any other carrier. The main goal of the airline is to make air travel affordable to all who wish to fly. At the outset, the founders of the airline, Rollin King and Herb Kelleher, said that "they began with one simple notion: If you get your passengers to their destinations when they want to get there, on time, at the lowest possible fares, and make darn sure they have a good time doing it, people will fly your airline" (Southwest Airlines, 2012). They have tried to maintain their promises despite rising fuel and other transportation costs while other national and international carriers have consistently increased their prices over the last decade (Southwest Airlines, 2012).

The company originally flew only routes in Texas, and that was the plan going forward. The competition within the state was not heavy because Southwest, then called Air Southwest, offered flights at a very discounted rate. The flights were so cheap that they actually competed with bus companies for passengers. The only issue they had early on was that if they wished to expand beyond the state of Texas, they were only allowed to fly to other states that touched Texas. This restriction, called the Wright Amendment, was meant to govern air traffic at Dallas's Love Field. The reason for this restriction was to both decrease the competition between Love and Dallas/Fort Worth International, but also because allowing full operation of both airports would cause an airspace nightmare for the FAA. However, Southwest established its headquarters at Love Field despite the restrictions, and, over time, was allowed to fly to any destination within the contiguous United States.

The airline remains specifically a U.S. carrier (the largest U.S. carrier as of 2011 data), but with the recent purchase of AirTran Airways in 2011, Southwest may begin international flights to the Caribbean and some destinations in Mexico and other Central American countries. As of right now, Southwest has agreements with other airlines that allow passengers to book international flights through their website, and use the additional carrier to continue the flight after the passenger leaves U.S. soil.

The airline is also known for its specificity of airplane type. Southwest has, almost exclusively, used the Boeing 737 in its flights. However, when the airline purchased AirTran, they also acquired its fleet of Boeing 717's. The airline has implied that they will continue to operate these airplanes also, but new orders for an updated fleet did not include new 717's (Southwest Airlines, 2012). The reason that Southwest wants to maintain a limited number of aircraft types is because it makes reduces the overall costs to the company, and thus to the passenger.

Value/Culture

The original desire of the airline was to offer the lowest possible prices to all destinations that they served. The company has tried to maintain that position as a central value because they believe that customers will be loyal to a company that tries to remain loyal to them. The idea behind this is not to be a "cheap" airline, but a low cost alternative to the large international carriers (Southwest Airlines, 2012). The mission of the company "is dedication to the highest quality of customer service delivered with a sense of warmth, friendliness, individual pride, and company spirit" (Southwest Airlines, 2012). This affirmation sets the tone of both what the company values and the culture that has been instilled. The company website says that the culture "is all about working hard and playing harder" (Southwest Airlines, 2012). Since its beginnings the top executives have tried to make the mission of the company one that supports its employees and values its customers. The company also works its values statements into its goals for customers and employees by saying that they

"are committed to provide our Employees a stable work environment with equal opportunity for learning and personal growth. Creativity and innovation are encouraged for improving the effectiveness of Southwest Airlines. Above all, Employees will be provided the same concern, respect, and caring attitude within the organization that they are expected to share externally with every Southwest Customer" (Southwest Airlines, 2012).

The airline seems to believe that if they treat their employees with respect, the employees will forward that to the customers. Since the company has consistently ranked as one of the most admired companies both to work for and do business with in the past three decades, this mission seems to be working.

Maximizing Profit Opportunities

Southwest Airlines has become the number one carrier in the contiguous United States because the company has taken advantage of the profit opportunities that have presented themselves. In the beginning, as described above, the company has expanded slowly, but it has always done so regionally and then nationally. Instead of trying to compete with more established carriers such as U.S. Air and Continental on all of their routes (both national and international) which would have been difficult to accomplish, Southwest has tried to grow profits by staying "small" (Smith, 2010).

Acquisitions

The history of the company describes how they have tried to maximize profits in several different ways. Southwest airlines started as a small company that wanted only to serve customers in a small area. Thinking globally, that is what they continue to do. Southwest is not interested in the international market the way other carriers are. Companies such as British Airways, U.S. Air and other international carriers have expanded their businesses by gaining more international routes and by engaging in partnerships that will help them to serve more routes. This can be seen in the recent British Airways merger with Iberia Airlines (British Airways, 2011). Through the parent company International Airlines Group (IAG), British Airways now has access to more routes and the ability to grow stronger as an international carrier. IAG recently tried to incorporate Lufthansa's Heathrow business also, but was unable to complete the sale (British Airways, 2011). This is how the international carriers are able to grow their business, and Southwest has followed the same model on a national scale. Through the acquisition of several smaller, regional airlines, Southwest has been able to gain slots at LaGuardia in New York and Hartsfield-Jackson in Atlanta (Southwest, 2012). These are two major destinations that Southwest has not been able to offer passengers because of airway restrictions. However, Southwest realized that they needed to add direct service to two of the largest metropolitan areas in the United States. This strategy, acquiring smaller, failing airlines that have coveted/hard-to-obtain routes, has allowed Southwest to grow its business over the past three decades.

Hedging Fuel Prices

Another strategy that the airline has used which has caused both controversy and some interest from other carriers, is their practice of hedging fuel prices. Of course, commodities trading is one of the oldest forms of stock exchange in the world, but airlines have always followed the supposedly safer strategy of buying fuel as it was needed, and at the price that was given at the time. But, Southwest is always looking for the edge that will allow them to serve their customers with lower prices. Commodities trading allows an entity to lock in a price on a good (such as airline fuel) whether it goes up in price, stays the same or goes down. Southwest, and all other commodities traders, sometimes pay the price when the commodity dips lower than they had anticipated, but they also gain when the price increases, even a few cents, over what they had guaranteed from the provider (Pae, 2008). According to Los Angeles Times writer Peter Pae,

"The airline, one of the largest at Los Angeles International Airport, locked in more than 70% of the fuel it expected to consume this year at about $51 a barrel, far below Thursday's closing crude price of $126.62 a barrel. Other large airlines, meanwhile, have only 20% to 30% of their fuel "hedged" this year at an average cost of $100 a barrel."

The airline industry as a whole believed that this was a gamble that was not wise given the volatility of fuel prices, but Southwest took the gamble and won. Unfortunately, it does not always turn out this well because fuel prices do fluctuate wildly at times, but it was a gamble that allowed Southwest to post profits when other carriers were not. However, in the first quarter of 2012, Southwest did see negative profits because of its fuel hedging practices (Trejos, 2012), but this is seen as a temporary setback as fuel prices are trending up for the future.

Regional Airports

Besides the strategy of hedging fuel prices, Southwest has also adopted a policy of hedging airports since its inception. When the airline began operating in 1971, it was headquartered at Love Field in Dallas. Love Field is located in downtown Dallas, and puts business travelers, as well as vacationers, right in the midst of the city. This is a strategy that the airline has used as it has expanded throughout the United States. Many large cities have more than one airport used to service a large population. In Chicago, the main airport is O'Hare International, but Southwest operates all of its flights out of the more centrally located Midway. Houston Hobby is the same type of airport as is LaGuardia in New York. The strategy was by the airline was two-fold. First, many of the larger airports carry the tag "International" in their name, so they have longer runways for the larger jets, and they have a greater amount of air traffic. The smaller, inner city airports are more exclusive in the clientele they serve (usually being the hubs for smaller, private jets), and they do not have the traffic delays that occur with the international carriers. Another advantage that Southwest noted with these types of airports is that they are closer to these cities' downtowns. Customers have the luxury of quickly making their final destination within the city because they have landed at an airport located in the downtown area rather than one which is located on the outskirts. An advantage for Southwest, especially as they have become the national airline with the greatest number of U.S. flights, is that they are an attractive customer for these smaller airports, so they can command reduced rates for their presence in the airport. They are basically the anchor store in many of the airports they serve.

Customer Service

The fact that they operate in these smaller regional airports has made it clear to customers that Southwest stays true to its stated values. Recently, Southwest airlines has been advertising using its "bags fly free" tagline because so many other carriers are not allowing passengers to have more than one carry-on without charging them an extra fee. This campaign has demonstrated (as seen through Southwest sales in recent months) to passengers that Southwest cares about whether they receive the best service or not. But, it is sleight of hand on the part of Southwest airlines. Since Southwest only flies domestically, they can afford to carry a greater weight of passengers and luggage that the international carriers cannot. For domestic flights, many of the international carriers will wave some of their bag fees also, but the practice is even more in force for international flights. The reason is fuel costs, where Southwest has had an advantage over other carriers in the recent past. As explained above, Southwest has hedged a great deal of its fuel load which has led to greatly reduced costs, much of the time, this means that they are able to travel a greater distance, and with a greater load, than another airline on the same dollar amount of fuel. Because of this practice, Southwest has even been able to increase the amount of passengers they seat, so even when they are wrong about a particular price they have been able, most quarters, to see a profit.

Transforming Knowledge into Profit

The greatest example of this is the fuel hedging that the company has done over the past decade. The rest of the industry was skeptical about the practice because they had already been losing profits to a large degree over the past twenty years. The airline industry does not have large margins for its product in the first place and rising fuel prices decreased those margins even further. Carriers have to balance what they pay to operate with what the public is willing to pay for the advantage of flying. Southwest was able to cut into the calculation by paying less for the fuel that they used.

The airline industry as a whole has been failing for decades because of the increased costs of doing business. Fuel is the main issue, since it used to be a relatively cheap part of the equation and has grown into the largest part, but other costs plague carriers also. Many fleets had become almost unmanageable by the 1980's and the various airlines had to upgrade significant numbers of their planes. Because of the increased cost of doing business, major manufacturers such as Boeing and Airbus also had to increase cost dramatically during this time period. This forced many major carriers, such as Braniff and TWA, out of business. Short-term thinking doomed much of the airline industry just as it had many auto manufacturers. But rising maintenance costs have forced the airlines to upgrade their fleets to more efficient, newer planes. In the short-term, this is a large expense, but it is justified by the lower cost over the long-term.

Southwest has used both strategies to increase their profitability over the past decade. The executives of the company have always seemed to share the knowledge that short-term thinking is death to a business. Just like the business models that Japanese automakers used to drastically increase their market share in the 1980's and 1990's versus the big three U.S. automakers, Southwest has used a long-term efficiency model to increase their own market share and profits. By hedging fuel costs, reducing the airplanes they purchase to a single type (which has gained some traction within the industry), and continuously upgrading their fleet, Southwest has been able to ensure their profitability.

Southwest Pricing System

Pricing systems are generally based on either the government or a free market design. In the United States, the pricing system is a mixed model based on the fact that a completely free market system breeds some amount of greed from the people who are best able to use the system (usually the largest companies in an industry), and the fact that the government is in place to protect the consumer from inordinate greed from businesses. This means that government regulation, especially antitrust legislation has determines, to some extent, the pricing model that businesses are able to pursue.

The hospitality industry, of which airlines are a major part, has long used a model that is known as optimized pricing (Kadet, 2008). "When airlines moved to this sort of high-tech pricing in the 1980's, consumers howled. Though optimization led to lower fares for some, fliers argued it smacked of price gouging, because fares go up when people need to travel most, like during holidays and school breaks" (Kadet, 2008). Of course, this has become the industry standard around the world now and customers seem to accept it from airlines, hotels, and other hospitality trades as the accepted way of conducting business. Southwest, like any other carrier uses the practice to set prices during peak times of flight which pays for business when there are not as many people using the airline. Because of the restrictions imposed by the government and the fact that Southwest must meet the strategies of the rest of the industry, the company is somewhat limited in what it can do as far as pricing. However, Southwest has instituted one pricing strategy which it has built into a large, and profitable, advertising campaign. Most airlines have been losing money for two reasons. First, fuel costs have been increasing dramatically for the past five to ten years, and this has affected carriers such as airlines and long-haul truckers more than anyone. Another reason airlines have lost money is because of the poor economy. People have opted to either not fly on the vacations that they take because driving is deemed a less expensive alternative, or they have gone on fewer business trips and vacations. The advent of technology that has allowed businessmen and women to curtail flying, a segment of the population that provides a great deal of business for air carriers, has been greatly reduced due to internet technologies which allow people to teleconference foregoing the need to travel to a face-to-face meeting. This means that airlines have had to try and gain back that money in any way that they can. Customers have had to shoulder this increase by paying for services that were once free. Two of these services are in-flight meals and baggage check-through. Whereas both of these services have been historically free on airlines, they now cost the passenger money because the airlines can no longer afford to provide them for free.

Every airline that is except for Southwest. Pricing is of specific concern to Southwest because they are billed as a low-price airline. Because Southwest wants to maintain its reputation in this regard, they have had to undercut other carriers with any pricing strategy that they can legally employ. This would seem to indicate that Southwest would be one of the first to implement carry-on fees, but they have done the opposite. Southwest has not had to concern itself with negative press about food choices either, since they never offered food service, to any great extent, anyway.

One further issue that many carriers have is labor. Although, Southwest has had some labor issues (especially with flight attendants (Southwest, 2012)), they have been able to navigate around many because of the company's unique labor structure. Pilots that fly for Southwest do not belong to a national or international union, they belong to one that is specific to Southwest Airlines. This has made it possible for the company to cut costs because they are not dealing with labor agreements that affect the entire industry (SWAPA, 2012). Labor agreements are also one of the reasons why Southwest has not aggressively pursued international flights. By lowering labor costs, Southwest is able to keep pricing for their customers low also.

Entrepreneurship

Although many of the decisions Southwest has made have not been welcomed by their competitors, they have served the company well. When Southwest first began the motto was to fly within Texas and give customers the lowest fares available in that state. The motto has basically stayed the same through the company's 40 years of operation. Low fares are something that has been a hallmark of the company, and they have been able to maintain them through creative marketing and pricing. Another reason that Southwest has been able to remain a viable air carrier despite the travails of other carriers is that is has maintained an entrepreneurial spirit.

Southwest Airlines is run like a much smaller company. There are not great layers of management between the lowest employee and the CEO, the company has tried to be a model for the flattened hierarchy that has become such a hallmark of U.S. businesses within the past two decades. Because of this structure, Southwest employees are better able to have a say in the developments of the company and the innovations that make Southwest very employee friendly. The website claims that the company is very cognizant that employees who are busy serving customers directly everyday should have a great deal to say about improvements that can be made to enhance the services offered by the company (Southwest Airlines, 2012). The company has tried to maintain an entrepreneurial spirit by allowing the employees to take ownership of the processes that govern how the company is run. This, in turn, makes the service that they offer the customers that much better.

Spontaneous Order

Any airline has a few prices that it controls and negotiates, either directly or indirectly, with its customers in order that both parties will be satisfied with the arrangement. These prices, how much a customer will pay for an airline ticket and how much the customer will pay for peripherals, are also how Southwest and other airlines stay in business or lose business to other carriers. Since the beginning of the economic downturn, the company has had to make its prices more enticing, or it would lose business due to the decrease in disposable income. Southwest and the rest of the members of the hospitality industry have had to give up even more in this case because the customers hold much of the power. As it says in Porter's five forces, a company that does not pay attention to this issue (and others that affect profitability), will not survive in a tight market. Southwest has reacted to the economic downturn in ways that have regenerated its power in the bargaining of price whereas others have not.

The spontaneous order argument, as applied to economics, says that chaotic trends within society will eventually stabilize throughout that society into a new form of order. The businesses that realize this are the ones that thrive through the chaos instead of being swallowed by it. It is basically impossible to order the chaos by any artificial means either; reaction to the chaos while it is happening often causes companies to go down. The correct reaction it seems is to ride the chaos and try to maintain any momentum temporarily by not changing anything until the new order is determined.

A few companies in different industries were able to accomplish this and find success where others had either had to account for large losses, or were completely devastated by the economic crisis. Ford Motor Company was able to weather the storm because they had early on established methods that the other automakers did not. They had reduced their hierarchical structure, and reduced the number of plants making cars prior to the crisis. Also, they had a great deal of cash in reserve (around $13 billion) that was used to help allay losses during the downturn. Bank of America did not make as many bad loans as other institutions prior to the downturn, so they were not affected as much as some other banks that were far larger. Bank of America took over the operations of some of those other lenders such as Countrywide. Southwest Airlines, like these other two examples, was able to weather the economic storm because they were already a preferred low-cost airline. Like Wal-Mart in among large retailers, Southwest had already established its reputation, and thus it was able to maintain in the face of economic difficulty. Customers continued to patronize Southwest because the company did not panic, as many other carriers did, and start charging for extras that had previously been free. The order that finally occurred was that people were more frugal and more willing to save the money that they acquired while looking for a better deal. Southwest not only fit into this new order, they led it to some degree because other carriers had to match the low-cost fares that Southwest had thrived on for decades. While other air carriers were reeling and having to find new ways to conduct business, Southwest was able to increase the business it already had by not panicking and continuing to offer the same service it always had. The "bags fly free" initiative is not new, but it is a guarantee that Southwest will not panic like other carriers have with their insistence that customers have to pay more because of the downturn.

Outsourcing

Businesses have tried to cut costs in recent years by outsourcing many of their peripheral operations to specialty companies. Many times these are foreign companies that are used because they also provide the needed service at a much reduced cost. In the case of Southwest airlines and many other U.S. air carriers, the outsourcing comes in the form of maintenance that is farmed to companies in central America that are allows the airline to have major maintenance functions completed by a vetted company that also provides the service at a greatly reduced rate. There are pros and cons to this strategy which have been thoroughly examined by consumer watch groups in the U.S. And abroad.

For Southwest this is a good strategy because they are able to save additional money on rehabbing older planes that need major repairs. The company website states that there is some maintenance outsourced, but the companies performing the maintenance are completely vetted by Southwest and they are doing this to save the traveler more money on their ticket price. In one sense this is true, but Southwest may be costing itself further revenue in other ways.

The problem many see with outsourcing services to companies that operate outside of U.S. borders is two-fold. First, the maintenance may be cheaper, but it also takes jobs away from U.S. workers. Passengers may get the idea that Southwest is unfriendly to U.S. workers and decide to patronize another carrier if they guarantee that they will not use outside labor. Although this is probably not a big concern, Southwest uses unionized labor almost exclusively. When it comes to negotiations with the unions, it may be more difficult to reach agreements if some of the labor that could be done by unionized U.S. employees is completed instead by workers in other countries because it is cheaper. The other issue is that the regulation that guards U.S. citizens against shoddy workmanship is not in place in many of the areas where Southwest and other carriers have their maintenance done (Smith & Bachman, 2009). Southwest stopped much of the outsourcing that they were planning in 2009 because of the outcry from consumer watch groups, and because the U.S. was going to make it mandatory that they pay to have the FAA check the maintenance work done anyway. The advantage of having the work done abroad was not as great as re-establishing relations with U.S. workers.

Outsourcing has also impacted customer service in some parts of the industry. Call centers have long been considered one of the areas where outsourcing to overseas sites was acceptable. Southwest began receiving low customer ratings for its customer service regarding flight issue notifications, so they decided to look into an outsourcing solution for the problem. Southwest hired a Seattle-based company, instead of an overseas firm, to design a system that would efficiently let customers know an up-to-date status of their flight (Bowen, 2010). This system was developed by an outside company because Southwest does not maintain a large IT department in an effort to curb costs. This method has increased customer satisfaction until the Southwest system is now regarded as "best-in-class" (Bowen, 2010).

Incentive Structures

Ticket prices are the primary means that an airline has for managing its profit and loss within the industry. Consumers are willing to pay a certain amount for a ticket because of the convenience flight offers as compared to using another means of transportation to reach a destination. However, there is a balance that must be struck between the consumer and the service provider that cannot be violated or the consumer will find another method of transportation. Of course, the level of service and the price are not the same for every consumer, or even for every flight, but the balance has to be struck or the an alternative agreement will be managed with another carrier or some other alternative.

One of the methods that air carriers and other businesses use to entice customers to use their service rather than a competitors is through incentive programs that provide an added bonus to consumers over the service of another airline. Southwest Airlines does not believe that they need incentives to get customers to fly with them because they have needed them in the past 40 years of operation. The reason for this lack of such programs is found in the primary goal of the airline -- to be the low-cost national airline in the United States. They have been able to maintain their profitability by maintaining this goal throughout the years. In other words, Southwest has maintained their pricing strategy because it is proven.

The airline has a website that is dedicated to showing current and possible investors their market reports and providing reasons for continued investment in the company. Under the heading "Performance" the company states that 2010 (the last year that data was given) was the 38th consecutive year that they have shown a profit (Southwest One, 2012). They say that

"We remained true to our low-fare brand, refusing to follow the industry's efforts to pile on additional fees and surcharges. Instead, we offered Customers a choice in paying more for optional services. As we continued our focus on superior Customer Service, we experienced record load factors in all but one month of the year and grew our market share. We held on to the distinct designation as the largest domestic airline."

The program may not be considered a typical incentive program, but customer service and good service at low prices is always an incentive for customers to purchase a product. The fact that Southwest continued to provide these advantages to their customers despite the failings of the industry during the depths of the financial crisis is a testament to the wisdom of the incentive program that they have maintained.

Coase

One theorem that closely follows the reasoning of Southwest Airlines in many of the decisions that have been made during the company's unlikely growth is that attributed to Ronald Coase. His theory, which is one of the premier explanations of present economic thinking, was made with regard to property rights and transaction costs. Many attempts have been made to adequately explain his theory, but it is presented eloquently in his use of farmer and a rancher as a metaphor (Coase, 1960). He wrote that a farmer who grew corn lived next to a rancher that raised cattle. The cattle would break down the fence and eat the corn, and the rancher would have to pay the farmer for the loss. He said the decision that the rancher had to make was whether it was in his best interest to continue paying the farmer for his lost corn, or build up his fence so the cattle could not escape. The decision would have to be based both on the cost of both transactions to the rancher and which would leave him the most profitable in the end. This is the same dilemma that companies face constantly as they determine what to do with regard to regulations (what is the cost of ignoring or following the regulation), other companies' supposed property rights, and so forth.

In the case of Southwest Airlines, they had to determine both the property rights issue and transaction costs early on. The company was actually incorporated in 1966, but they did not begin operations until 1971. In those five years, Herb Kelleher and Rollin King fought with most of the other transportation companies in Texas who were against their charter. The company's history timeline states that "Braniff, Trans Texas (later Texas International), and Continental Airlines obtain a temporary restraining order from Travis County District Court prohibiting TAC from delivering our Certificate" (Southwest Airlines, 2012). The reason for this was that the other airlines believed that the airways of Texas were already saturated and that they would lose business if another local carrier was allowed to operate. Kelleher and King had to decide if the continued fight was worth the expected cost in terms of time and finances. Eventually, after five years of court battles, Air Southwest (later Southwest Airlines) was given its charter. Because the order was issued and the company has succeeded beyond their initial modest expectations, it can be seen that the initial investment in time and finances was worth the transaction cost.

When Southwest started operations, they used Love Field (as they still do) as their base of operations. This airfield was only allowed limited access to routes because of the Wright law. Again, the executives at Southwest had to decide what the cost of fighting the legislation were in relation to the disadvantages. The transaction cost of the fight that they were engaged in was the time and the money expended to try and get the law changed so that they could continue to use Love Field. The company could have decided to obtain space at DFW, but they would not have been able to get as much space as they had at Love Field (where they were the only major airline tenant), or they could fight both the major airport, much of the airline industry and the government in their pursuit of an equitable deal using Love. For a time, the maintained their offices at Love Field, but flew many of their routes out of Houston Hobby. This allowed the airline to expand the number of routes they flew while maintaining their hold on their property in Dallas. Eventually, after more than 20 years of fighting the legislation, Southwest was able to fly to all of the contiguous United States from Love Field. This project also convinced the company to follow a similar program in other large U.S. cities which turned out to be a very profitable move.