On Sunday I mentioned the ongoing effort to have Southwest Airlines honor its founding President and CEO at the end of his life.
Lamar Muse passed away peacefully at 10:32pm last night.
Please indulge me by allowing me to quote extensively from an autobiographical sketch:
- Muse was the co-founder and first President and CEO of Southwest Airlines, a role he served from 1970 to 1978. A true market innovator, he created the business model for an intrastate low-cost air carrier and, seven years before the deregulation of the airline industry, he changed the playbook for an industry that was long regulated to the benefit of large carriers who could control competition and operate on a cost-plus basis — with the cooperation of the federal government. He proved it was possible for a low-cost, no-frills provider to deliver excellent customer service – and make a profit.
With unheard of low prices, he democratized air travel, making it convenient and affordable for the masses, rather than just the affluent. With three Boeing 737 aircraft serving Dallas, San Antonio and Houston, he stimulated economic development in Texas – making it one big, burgeoning market that companies could easily serve. He enabled air travel for the price of a bus ticket in Southwest markets, thereby creating a booming leisure market within the state, then the region.
Muse was a master marketer – using sex and sizzle to create product differentiation and a lively in-flight experience in a previously-staid commodity service sector. He captured the essence of Texas in its go-go growth era with 38 gorgeous “Hostesses” (today known as Flight Attendants) attired in hot pants (designed by his late wife, Juanice). He endorsed a sassy brand image and advertising campaign with a “luv-themed” play on words. To this day, the symbol for Southwest on the New York Stock Exchange is LUV. Not surprisingly, such moves earned an on-going stream of noteworthy – and free – news coverage.
Southwest employees still “luv” Lamar Muse for implementing an early profit sharing program – a trade-off for lower wages offered in the interest of becoming the lowest cost highest profit per seat mile competitor. Thousands of those hired by Muse are millionaires today due to the value of their profit sharing plan.
After departing Southwest as a result of a boardroom battle regarding expansion plans to Chicago (which the airline implemented twelve years later), he created along with his son, Mike, another wave of attention-getting innovation in the founding of Muse Air, subsequently sold to Southwest, with the industry’s first “No Smoking” policy. Muse accurately anticipated changing health habits and the traveling public’s demand for clean air, now de rigueur in commercial spaces, other segments of the travel industry and legislated by many local governments.
With his emphasis on the bottom line, Muse commanded the attention of Wall Street and the respect of the investment community. He knew how to raise capital and led two of the biggest initial public stock offerings yielding $6.5 million for Southwest Airlines in 1971 and $35.5 million for Muse Air in 1981.
He pioneered a simplified fare structure consisting of executive class fares during business hours (6:30am – 6:59pm) and pleasure class fares at all other times, including weekends. A weekend or nighttime trip on Southwest was only $13, compared to $26 on competing Braniff and Texas International.
Muse became a bona fide legend in business and aviation during a career that spanned five decades. Blunt, colorful and plainspoken, he did what he thought was right for the business, customers, employees and investors — corporate politics be damned.
He had a gift for persuasion – building a strong case. He was an early proponent of free markets and educated lawmakers on the benefits of deregulating the skies during a wave of congressional hearings in 1978. He was one of Senator Edward Kennedy’s major witnesses to testify before the Senate Judiciary Committee investigating airline deregulation.
A professor at Harvard Business School created a case study on Muse and Southwest that is still being used in MBA classrooms throughout the nation. A video interview with Muse continues to be a popular, in-demand classroom tool. His book, “Southwest Passage,” tells the inside story of the founding of Southwest Airlines in detail.
Lamar Muse was a swaggering maverick – always courageous, sometimes controversial — with an innate marketing sense and a flair for the dramatic. He was a strategist who could execute.
When Muse was recruited to join Southwest, it had a little over $100 in the bank and past-due bills of more than $133,000. He welcomed the challenge and in just 120 days, the company hired and trained pilots, hostesses, mechanics, station personnel, marketing staff and completed negotiations for space at three airports, and completed the purchase of its first 3 Boeing 737 aircraft (with a 100% credit loan from Boeing Aircraft).
Thirty six years later, the company continues to operate on his founding principals – now one of the dominant domestic carriers with over 31,000 employees with the highest market capitalization of any airline in the industry, and serving more originating passengers each year with those same luv-ly low prices than any other domestic airline.
Lamar’s illness gave him several good weeks at the end of his life. He was able to enjoy visits from his family and friends, and he received emails from hundreds of people around the world whose lives he had impacted. Because he was able to participate in these memorials to him, no memorial service will be held. His ashes will be spread under the “Big P” on the rocks in Waddington Channel, British Columbia, a place he called heaven. Gifts made in his honor should be sent to the Palestine YMCA (named in honor of his parents, Hiram and Nan Muse), attention Michael Oranch, 5500 North Loop 256, Palestine, TX 75801.
Lamar Muse’s full bio is here (Microsoft Word).