Southwest began as a Texas carrier, founded by Herb Kelleher and Rollin King with a fleet of Boeing 737s. Their early strategy rejected hub‑and‑spoke schedules, opting for point‑to‑point routes that reduced turnaround time and costs, allowing fares to be set dramatically lower than competitors. When the airline received its first operating certificate in 1978, it opened routes between Dallas, Houston and San Antonio, proving that a no‑frills service could attract business and leisure passengers alike.
The 1990s marked a turning point as Southwest introduced the Rapid Rewards loyalty program and expanded beyond Texas into the Sun Belt, leveraging its low‑cost model to dominate markets such as Arizona and California. By standardizing a single aircraft type and eliminating assigned seating, the airline kept maintenance and staffing expenses low, reinforcing its ability to offer fares that often undercut legacy carriers even during periods of rising fuel prices.