In the 1970s, Southwest was a small startup in Texas designed to facilitate travel between the state’s three major cities. Now, it’s one of America’s largest domestic airlines, and much of its early success can actually be attributed to a savvy marketing tactic that gave customers free bottles of booze.
Southwest was struggling to fill seats in the early years, so it hatched a scheme to halve its rates on certain flights to $13 one way and $25 round trip. The promotion was a success, and routes that were previously in the red became profitable as planes filled up with passengers enticed by affordable fares.
Braniff Airways, Southwest’s major local competitor at the time, caught wind of the half-fare buzz and decided to match its low price of $13 to fly from Dallas to Houston, Southwest’s most profitable route. This triggered what is now known as the “$13 Fare War” of 1973, a proverbial arms race between Southwest and Braniff to attract the most customers with the best deals.
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Herb Kelleher, Southwest’s lawyer and, later, CEO, was a Wild Turkey bourbon aficionado and appreciated the value of a nice bottle of liquor. He proposed that Southwest offer its passengers an option: either pay the discounted price, or pay the full fare and get a gift for their patronage. Customers could choose from products including a fifth of Chivas Regal Scotch, Crown Royal, Smirinoff, or even a leather ice bucket. About three-quarters of Southwest’s passengers, primarily traveling businessmen, flocked to Southwest and happily paid full fare on their company’s expense accounts to claim their free bottle of booze.
The country watched intently as the back-and-forth battle between Braniff and Southwest unfolded. The media played up each time one company undermined the other with a better deal, making this one of the most widely reported conflicts in aviation history. As the “war” waged on and Southwest distributed more and more bottles with each flight, the airline suddenly became the largest distributor of “premium” liquor in Texas, according to a PR representative from the carrier.
While the idea of giving out free bottles of premium spirits might seem silly, the promotion led to Southwest’s first-ever profitable year and drove the airline to victory as the undisputed winner of the $13 Fare War. Southwest established itself as a scrappy, entrepreneurial airline, while Braniff Airways ceased airline operations in 1982. With Southwest’s recent struggles, perhaps it wouldn’t be a bad idea for the airline to get back into the business of giving passengers free bottles of booze.