Former Houstonian M. Lamar Muse, one of the founders of Southwest Airlines and a pioneer of airline deregulation, died earlier this week in Dallas. He was 86 at the time of death.
Muse was legendary in the airline industry for taking over Southwest when the airline had no planes, piles of startup debt, and nominal liquidity. He parleyed that into three 737s from Boeing so that Southwest could begin flying the planes between Dallas, Houston and San Antonio, taking advantage of close-in and underused Hobby Airport in Houston and Love Field in Dallas. Inasmuch as Southwest was flying entirely intrastate, the airline was lightly regulated in comparison to the legacy airlines of the time and, thus, slashed fares to capture the Texas market. When I moved to Texas in the early 1970’s, I could buy a ticket to Dallas or San Antonio for about $30, $50 round trip. And, yes, those orange hot pants on the flight attendants were not bad, either.
Muse left Southwest in the late 1970’s over a dispute about the rate of expansion and he was never able to regain the mojo that he displayed at Southwest. In 1982, he started Muse Air, which was sort of a luxury version of Southwest, but the timing was bad as the oil and gas business in Texas was just beginning to enter a long and deep tailspin at the time. After never generating a profit, Muse sold out to Southwest in 1985, which renamed the airline TranStar. By 1987, Southwest had had enough of the airline’s losses and shut it down.
Muse was a true character to the end, reportedly participating in internet chat rooms regarding airlines up until recently. Probably his most endearing business legacy is his championing of a company stock-based, profit-sharing plan for Southwest employees, who didn’t have pensions at the time. That plan eventually turned many longtime Southwest employees into millionaires as Southwest’s value grew over the years. A fine legacy for any businessperson, indeed.