Two Major Companies Who Settled Their Differences the Old Fasioned Way

TL;DR

Two companies, Southwest Airlines and Stevens Aviation, settled a dispute over a slogan through an arm wrestling match, which generated publicity and benefitted both companies financially.

Transcript

Mallice in Dallas - How two Major Companies Avoided Court By Settling a Dispute the Old Fashion Way David vs. Goliath. Burr vs. Hamilton. Ali vs. Frazier. These fights have captured the public’s imagination like few others. On March 20, 1992, another battle entered this conversation. Herwald vs. Kelleher. Okay, so most likely, you probably don’t ha... Read More

Key Insights

• 💨 Prior to 1978, the airline industry in the US was heavily regulated, but Southwest Airlines found a way to offer lower fares and operate within Texas.
• 🤪 Southwest Airlines built its reputation on being a fun and zany airline, which helped differentiate it from its competitors.
• 🦾 Southwest Airlines settled a dispute with Stevens Aviation through an arm wrestling match, generating publicity and financial gains for both companies.
• ❓ The "Malice in Dallas" event showcased the personalities and leadership of both Southwest Airlines and Stevens Aviation.
• ❓ Settlement through unconventional means can generate positive publicity and financial benefits for companies involved.
• 🦾 Southwest Airlines' stock prices doubled within a year after the arm wrestling match.
• 🇺🇸 The event attracted the attention of the President of the United States, George H.W. Bush, who sent a congratulatory letter to both participants.

Questions & Answers

Q: Why was the airline industry regulated prior to 1978?

The airline industry was regulated to ensure that prices were the same across airlines, as dictated by the federal government and the Civil Aeronautics Board.

Q: How did Southwest Airlines get its start?

Southwest Airlines was created by Rollin King, who saw a need for an airline that would fly passengers within Texas and could charge lower, unregulated fares.

Q: How did Southwest Airlines differentiate itself from other airlines?

Southwest Airlines developed a reputation for being fun and zany, with flight attendants wearing bright orange shorts and go-go boots. They also used catchy advertising slogans to promote their brand.

Q: How did Southwest and Stevens Aviation settle their dispute?

Instead of going to court, Stevens Aviation challenged Southwest's CEO, Herb Kelleher, to an arm wrestling match. They agreed that the winner would keep the slogan, and the loser would donate to charity. Stevens won the match, but allowed Southwest to continue using the slogan.

Summary & Key Takeaways

• Prior to deregulation, the airline industry's prices were regulated, but Southwest Airlines was able to charge lower fares by operating only within Texas.

• Other airlines fought against Southwest but lost in court, allowing Southwest to expand and become known for its fun and zany image.

• When Stevens Aviation challenged Southwest's slogan "Plane Smart," they settled the dispute through an arm wrestling match, which generated publicity and financial gains for both companies.