When Southwest Airlines Co. was just getting its business off the ground in the 1970s, the Dallas-based company faced stiff competition that threatened to crash it. So when the low-fare airline couldn’t set its fares any lower, it opted to offer something that others weren’t – a free bottle of whiskey.
“We became the leading liquor distributor in Texas,” joked James Parker, Southwest’s former chief executive officer.
Parker describes similar business strategies in his recently published book, “Do the Right Thing.” His biggest challenge as CEO: Keeping the airline afloat in the months following the Sept. 11 terrorism attacks. Instead of responding to billion dollar losses by laying off employees, as other airlines did, the company cut corners elsewhere, Parker said. Southwest was the only major airline to report a profit that year.
“We had our employees cutting our lawn, and everything else you could think of to save money so that we didn’t have involuntary pay cuts,” Parker said. “This company was built on the idea of being frugal, and that has made it successful.”
Parker, who retired from Southwest in 2004, also takes pride in the fact that he personally handed out peanuts to passengers regularly during flights – something he said helped him bond with customers and flight attendants.