Southwest Airlines

Southwest Airlines is a Dallas-based US carrier whose headquarters sit on the grounds of Dallas Love Field. Its low-cost formula has been widely copied: Ryanair, easyJet, IndiGo, Volaris and Pegasus are among the airlines whose models drew on it. Since 2025, though, Southwest has been changing the product in ways that move it towards a hybrid position, and the profile below should be read with that shift in mind.

Texas origins

The company was incorporated as Air Southwest Co. in 1967 by Herb Kelleher and Rollin King, with a plan to fly only within Texas, linking Dallas, Houston and San Antonio. Staying inside one state kept it outside federal fare and route regulation, and rival airlines fought its launch in the courts. It took the Southwest Airlines name in 1971 and began flying that June with Boeing 737-200s. Its first route outside Texas, Houston to New Orleans, opened on 25 January 1979, after US deregulation, and the network then spread west and north through the 1980s.

Restrictions on flights from Love Field, known as the Wright Amendment, shaped where Southwest could fly from Dallas for decades; they were finally lifted on 13 October 2014. Growth also came through acquisition. Southwest bought AirTran Airways in May 2011, gaining Atlanta, Boston and Caribbean destinations, and the two airlines were fully merged on 29 December 2014. In December 2011 it became the launch customer for the Boeing 737 MAX with a firm order for 150 aircraft.

How the model works

Southwest does not run a classic hub-and-spoke operation. It flies point to point with what it calls a rolling-hub pattern at its larger stations, and it has used a single aircraft family, the Boeing 737, throughout. There is one cabin, without a separate business or first class. As of June 2026 it served more than 100 destinations in 43 US states, Puerto Rico, Mexico, Central America and the Caribbean. Denver, Las Vegas, Chicago Midway, Baltimore/Washington, Phoenix and Dallas Love Field are among its busiest airports.

What has changed since 2024

In 2024 the activist investor Elliott Investment Management built a stake of more than 10% and pressed for changes. A settlement that autumn put five Elliott nominees on the board, and long-time leader Gary Kelly stepped down as executive chairman; Bob Jordan, chief executive since February 2022, stayed on. The changes that followed broke with several long-standing Southwest practices:

• the first layoffs in the company's history, of about 1,750 corporate staff, in early 2025;
• the end of two free checked bags on 28 May 2025, along with new basic fares and one-year limits on flight credits;
• extra-legroom rows on 737-800 and 737 MAX 8 aircraft from May 2025;
• assigned seating from 27 January 2026, replacing the open-seating system;
• sales through third-party sites, red-eye flights and new airline partnerships, with TAP Air Portugal and LOT Polish Airlines added as the tenth and eleventh partners in the third quarter of 2026.

In its third-quarter 2026 results Southwest also announced its first airport lounges, expected to open to guests in 2027, and a fleet-wide Starlink Wi-Fi installation due for completion in autumn 2027. A revised Rapid Rewards programme takes effect on 1 January 2027.

Fleet

Southwest had 803 aircraft at 30 September 2026, all Boeing 737s across the -700, -800 and MAX 8 variants. In the third quarter of 2026 it took 20 737 MAX 8s, retired 17 737-700s and sold three 737-800s. It expects 67 deliveries of the MAX 8 and MAX 7 in 2026 against about 60 retirements, and it has removed six seats from its 737-700s to make room for extra-legroom rows.