Matt D
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Herb Kelleher=Modern Juan Trippe?

Mon May 07, 2001 4:17 am

I'd like to get your feedback on this. What would you say if I said that in many ways, Mr. Herbert Kelleher is a modern day Juan Terry Trippe (for those of you who don't know, Mr. Tripped founded and built the original Clipper Pan Am). Consider the following parallels between the two men and their airlines (summarized):

Both almost single handedly ran their airlines from the start for several decades

Both (airlines) were models of success that many airlines later copied.

Both were said to be the "leaders" in what they did.

Both were air travel trailblazers (transoceanic, transcontinental, jet service for Pan Am, and cheap, mass transportation for Southwest).

Both (airlines) were considered impenetrable and seemed assured of being the "leader" for millenia.

Both (airlines) were launch customers for highly successful aircraft types

Both refused to deviate from their initial business plans that kept them strong for so long.

Both bought an airline and later regretted doing so
(National for Pan Am and Muse Air for Southwest)

Both lost their momentum after losing their longtime "father". Pan Am eventually floundered. None of the subsequent leaders of Pan Am shared Mr Trippes vison, expertise, or mastery of the airline.

Now that Southwest is losing Mr Kelleher, and so many airlines closing in on Southwest (JetBlue, Frontier, Midway, AA, UA, DL, etc), and many people taking a "second look" at WN, could Southwest possibly be at the place that was unthinkable just a few years ago? At the beginning of its end? After having just one leader for so long, will Herbs successor be able to continue that airlines success? Or will the departure of Mr Kelleher be the first nail in WN's coffin?

There are a lot more similarites than differences between PA and WN than many of us may have imagined. Remember, "never" is the most dangerous word in the airline industry. What may "never" happen today, may be reality tomorrow.

Remember, there was a time when no one ever, EVER thought that Pan Am, TWA, or Eastern would ever go under. And 20 years ago, who would've imagined that little tiny Southwest out of Dallas would be the much respected and huge airline they are today.

What do you think?

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lindy field
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RE: Herb Kelleher=Modern Juan Trippe?

Mon May 07, 2001 4:24 am

I don't see any "beginning of the end" for Southwest. It has merely become a more mature and established airline. Perhaps other airlines will show themselves capable of greater innovation as Southwest shows middle-aged complacency. I don't think that's a necessary outcome, though. Wait and see...
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RE: Herb Kelleher=Modern Juan Trippe?

Mon May 07, 2001 4:49 am

Get your patchouli stink outta my store!
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RE: Herb Kelleher=Modern Juan Trippe?

Mon May 07, 2001 6:01 am

Southwest is definitely at a crossroads with Herb Kelleher leaving. There are two keys to their future success:

1) They need to remain a privately held corporation and not go public.
2) The chosen replacement for Southwest must share the same vision and direction as Herb Kelleher.

If those two things happen, you can bank on Southwest being around for many years to come, long after the mega-merged airlines are gone.

Why do I make that last statement? Because the behemoths have had a very difficult time operating effectively. And throughout the history of the airline industry, the largest airlines have seldom been the best, or the most profitable.

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RE: Herb Kelleher=Modern Juan Trippe?

Mon May 07, 2001 6:06 am

The fellow who actually "ran" Southwest and laid the groundwork for what it is today is a gentleman named Lamar Muse. He and the other execs that were around at the start laid the foundation - subsequent leadership, Herb included, were smart enough not to screw around with it.
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RE: Herb Kelleher=Modern Juan Trippe?

Mon May 07, 2001 8:34 am


You're wrong on one count...

Southwest is already public. They're traded on NYSE under the ticker symbol LUV. Check it out.
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RE: Herb Kelleher=Modern Juan Trippe?

Mon May 07, 2001 9:46 am

Southwest has been a public company since 1977. Wish I would have bought some then, it's made a lot of people rich. It hasn't done too bad for me since I bought it in 1992.

FWIW - Southwests market cap is greater than AA,DAL,USAirways, and UAL COMBINED.
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RE: Herb Kelleher=Modern Juan Trippe?

Mon May 07, 2001 9:48 am

As far as their stature within the industry, sure I can see a similarity. Both men seem to be "larger than life." However, Pan American World Airways was a pioneer in many of the technical fields of aviation.

The stature of what was Pan American will probably never be duplicated in the near future. Pan Am offices in different countries arguably had more influence than the US Consulate in many of the countries that PA served. It was THE FLAG CARRIER for many decades.

For many years both carriers enjoyed an enviable safety record, SWA still enjoys that distinction today.

PA was the airline of glamour and stardom. SWA is the airline for folks looking for cheap seats.

As far as the men at the helm of the carriers, I can see some parallels, but the will always be one Juan T. Trippe, and one Herb Kelleher. Both mens personalities are inextricably linked to their companies corporate culture.

The ghost of Trippe haunted Pan Am for years, and I imagine Herb Kelleher will look upon his SWA long after he's gone.
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RE: Herb Kelleher=Modern Juan Trippe?

Mon May 07, 2001 10:33 am

In my opinion Herb is 100 times better than Juan because atleast Herb is way smart enough to leave the company in the hands of a person who knows how to run it properly instead of into the ground like the PAN AM CEOs after Trippe that were just in it for the sake of money and power. Trippes Successors had failed and now look where PA is. After Trippe's Death in 1981 that when the comapny really started to go down during the Ed Acker years. Hopefully this'll pose as a reminder.
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RE: Herb Kelleher=Modern Juan Trippe?

Tue May 08, 2001 4:54 am

That comparision is very true indeed. But the one thing that truly made LUV and destroyed PanAm was the Airline Deregulation act of 1978. It did away with the CAB (and state-run Aviation Boards like in TX) and allowed smaller airlines the chance to grow. Southwest by this time had been fighting tooth and nail with Braniff and Trans-Texas on routes in Texas. With deregulation, they could finally expand out of Texas, and not have to fight with the Texas CAB. As for PanAm, deregulation brought more competition that diluted their marketshare. Add to this their purchase of National, and they started the slow downward spiral to oblivion. Will Southwest do the same? Who can say? If they maintain leadership that sticks to the formula and came fight off the competition, they may stay strong for years to come.
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RE: Herb Kelleher=Modern Juan Trippe?

Tue May 08, 2001 7:23 am

I suppose it would be rude to say that I think you're on crack... so I'll just say that the parallel doesn't hold. Why?

* Herb didn't "single-handedly run the airline from the start." He was the corporate counsel for Southwest in the early days. Lamar Muse ("Muse Air") was the guy running the show back then in the formative days when the company culture was being established.

* Success breeds imitation. Southwest actually imitated PSA but did a better job of it. Ditto on this for cheap, affordable air transportation.

* Pan Am launched some risky *new* aircraft types (707, 747, etc.) Southwest launched three different derivative versions of the 737 - no-brainer there given their all-737 fleet.

* Pan Am *did* deviate from its business plan by buying National (they needed domestic feed, though). But they failed to successfully adapt the overall business plan when the original one went south. Southwest's business plan has been increasingly more profitable in recent years. There's no reason to change it until they see warning signs of it failing. Yeah, they should buy a bunch of 747's and start service from PVD to STD and MUC because it's time to "deviate from their initial business plan." (Actually, adding long-haul service in recent years *is* a deviation from their short-haul business plan)

* I don't think Southwest regretted buying Muse as much as Pan Am regretted National. Southwest managed to take out a competitor on its intra-Texas routes by purchasing MC, and also learned some important lessons about longer-haul markets. They knew when to call it quits. Pan Am pretty much had to stick with National - they had to get feed for their international operations after they began to face competition on their international routes.

* What happens at Southwest "post-Herb" is still up in the air. The airline has a strong corporate culture, though, and there's a good management team in place that will likely stick with their successful recipe.

So, aside from both men being important figures in aviation history, I don't think the parallel really holds.

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