Monthly Archives: February 2007

Southwest Airlines Founder Lamar Muse Dead at 86

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Lamar Muse, the feisty, controversial, egotistical, and always opinionated co-founder of Southwest Airlines, died late Monday in Dallas after a battle with lung cancer.

Muse, who was still feisty until the end — contributing regularly to an airline industry email list from a rehabilitation facility in Dallas after having undergone treatment for the cancer — was, along with Herb Kelleher and Rollin King, one of the three founders of Southwest Airlines. Or Air Southwest as it was originally dubbed.

As Terry Maxon mentioned in his article on him today in the Dallas Morning-News,

“In early 1973, Braniff began offering $13 fares on Southwest’s routes, a half-price fare that threatened to steal many of Southwest’s customers. Southwest and Mr. Muse responded with large newspaper ads proclaiming: “Nobody is going to shoot Southwest Airlines out of the sky for a lousy $13.”



Southwest gave travelers a choice: They could fly on a full $26 fare and get a free bottle of liquor, or get the $13 fare. The offer boosted ridership so much that Mr. Muse later credited the Braniff offer for Southwest’s eventual financial success.”

Just one of many, many stories out there.

But, as Southwest grew in the 70s, so did tensions between King and Muse. Not surprising — given the egos involved. Finally, in March 1978, Muse thought he would force a showdown with King, after which the board of directors would choose Muse over King. Muse submitted his resignation.

Big mistake, as Muse admitted later.

The board accepted his resignation and named Herb Chairman of the Board. Bye bye Lamar.

What many people may not remember is that later that same year, Southwest named Howard Putnam (yes, the same Howard Putnam who starred in the infamous Bob Crandall recorded telephone conversation) the airline’s President and CEO.

Putnam would leave for Braniff and his date with airline anti-trust history in 1981. It was then that Herb became CEO of Southwest.

Muse, meanwhile, along with his son, started Muse Air in 1981. Given the circumstances, it was nicknamed, “Revenge Air” at the time. The airline was eventually sold to Southwest, which shut down the remains of the carrier in August 1987.

Tired Fingers; AirTran Tales

PBB is done. Well, not done. It’s in final edits. But yours truly is done writing for the most part.

We should be posted in a couple of hours. It’s a long issue. Very tedious to edit those earnings call write-ups.

Writing about earnings calls is certainly not the most creative thing in the world, but it sure is fun to listen to the calls and see how much the participant’s personalities come through.

Case in point this week: Joe Leonard at AirTran. We all know Joe. Joe is not the shy and retiring type. Nothing warm and fuzzy about this guy.

This was certainly proven last week in AirTran’s call last week. Mostly silent throughout the bulk of the call, Joe came roaring out of hiding when analyst Jamie Baker from JP Morgan asked the airline’s CFO Stan Gadek, “Stan, you mentioned in some of your prepared remarks about raising the service bar. I was wondering if you’d be comfortable elaborating on that as it relates to the merger just given that Midwest [Airlines]is already so highly regarded it seems more likely than not that the local Milwaukee passengers would in fact witness some sort of a decline in what they’ve come to expect. Can you add anything to that?”

At that, the slumbering giant — that would be Joe — sprang into action with this rapidfire response:

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“Well, yes, this is Joe. I mean we have business class on every single flight. We have XM Radio on every single flight. The fact of

the matter the MEH product offering is all over the place. I mean they have this image which they deserve, a very high-quality service and I hear about lobsters and they haven’t served lobsters in six years, and they have 2-by-2 seatings on less than half of their flights where we have 2-by-2 seating on every flight.

Is there a quality of service on 18 passenger Beech 1800s or is it Dornier 32 passenger RJs or is it 50 passenger RJs or is it’s all coach MD80s? So you know their product offering is all over the place quite frankly. I think their image there’s a lot of nostalgia in their image that doesn’t fully bear out. So we think that by putting our product in there and also they’ve done a better job of brand management than we have. Adopting some of the things that they do that we don’t would be the best of both worlds.”

Pause.

Jamie then added, “So maybe the mystique exceeds the reality. I guess you’d have to drink quite a bit for a chocolate chip cookie to look like a lobster. All right. Thanks for the color. I appreciate it. Good luck.”

Great stuff.

Talk to you again in a bit. Off to set up our subscriber e-mailings.

Ticker: (AMEX: MEH), (NYSE:AAI)

Bored? Need Something to Listen To; ExpressJet Routes Posted

Earnings-2

The Raymond James Growth Airline Investment Conference is being held in New York today. Many airlines are there, and if they are, chances are they have a weblink on their respective website to their presentation. (Or to an archived copy if they presented earlier in the day.)

Yes, both AirTran and Midwest are there, as well as Allegiant, Frontier, and others. I haven’t heard yet whether or not they had to keep Joe Leonard and Tim Hoeksema separated by 2-foot thick walls or not.

And of course ExpressJet also presented today. In fact, if you would like to see the route map of the airline’s new regional operation, you can see it on their website now. I like it.

We’ve got a couple of PBB moles who are there — and I’ll be waiting to hear their reports later today. I’m also listening to several presentations myself.

Oh — which reminds me.

Yes, this week’s issue is going to be published on Friday. No question. I wanted to listen to the presentations in New York today and talk to folks who were there before finishing up this week’s issue. In addition, we’re working on earnings reports as well.

Meanwhile, back to Midwest/Airtran for a minute. AirTran has extended by one month its offer of $345 million in cash and stock for Midwest Airlines’ parent company.

Midwest Air Group shareholders have until March 8 to consider the offer, which was to expire Feb. 8.

Tickers: (NYSE:AAI); (Nasdaq:ALGT); (Nasdaq:FRNT); (NYSE:XJT); (AMEX:MEH).