Southwest is known for being the largest low cost airline in the US. However, at one point in time, Morris Air was a serious threat to Southwest. They were such a threat, that Southwest had to buy the airline!
In Southwest’s 50 years of flying, the only airline to threaten Southwest’s success was Morris Air. In fact, many of the practices that has made Southwest so successful in recent years, actually started with Morris.
Pre-Formation
In 1970, June Morris founded Morris Travel in Salt Lake City. Morris Travel soon became one of the largest travel agencies in all of Utah. By 1980, Morris Travel had become one of the largest travel agencies in the US.
The success of Morris Travel (and the invention of the internet) saw June Morris needing to further her business. What made Morris Travel so successful was their deal with Southwest, which brought low-cost airlines to Utah.
As such, she began to wonder why she wasn’t the one both owning the travel agency and the low cost airline. The result was that she started to draw up plans for a new low cost airline to compete with Southwest.
However, she understood that she didn’t know everything about the airline industry. As such, she met David Neeleman, who would go on to found WestJet, JetBlue, Azul Airways and Breeze.
Together with Neeleman, June began to model the airline she hoped to create off Southwest Airlines. By 1984, with Neeleman’s money and know how and the business June could bring, Morris Air was set to be founded.
Formation and Early Years
However, before June Morris and David Neeleman could start their new airline, they needed aircraft. Following the success of Southwest, Morris bought a fleet of 737-300 aircraft.
In 1984, Morris Air was launched as a charter airline, under the name Morris Air Service. The first charter flights were between Salt Lake City and Hawaii. Over time, Morris Air, through Morris Travel, added more charter flights.
These flights mainly focused on going west, opening routes to places like Seattle, Anchorage and Los Angeles. Morris Air Services also increased the frequency of their flights, going to 14 flights a week at its height.
For some of the longer haul routes, Morris chartered out their flights to Sierra Pacific Airlines and Ryan International Airlines prior to 1992. During the 1991/92 financial year, Ryan International Airlines was the sole flight operator.
Despite operating during the Golden Age of Aviation, Morris operated on slim margins with relatively low prices. The highest ticket price for a flight on Morris was $399 for a flight that cost nearly $700 on other carriers.
Morris Air Becomes Scheduled
In December 1992, Morris Air officially took to the skies in its own livery, after it obtained its FAR 121 from the FAA. December 1992 also marked the first time that Morris became its own scheduled airline.
Morris took over the routes that had previously been served by Ryan. Just as how Morris had seen rapid growth prior to being a scheduled airline itself, Morris saw rapid growth after it, adding several more routes.
As a charter airline, Morris operated most of its flights originating or terminating at Salt Lake City International Airport (SLC). The result was that as a scheduled airline, Morris utilized SLC as its headquarters.
As a scheduled airline, Morris started, and later popularized the idea of seasonal destinations. 1992 saw Morris enact their first seasonal destination- to Honolulu, on behalf of ATA. This led to six further seasonal destinations.
When Morris transferred from a charter airline to a scheduled airline, Morris also publicly had a CEO and President. The now-public CEO was June Morris, and the now-public President was David Neeleman.
By 1993, Morris was operating 1000 flights per week to approximately 24 locations. The end of 1993 also saw Morris with its highest number of employees, at 2000, including pilots, ground crew and flight attendants.
1993 also saw Morris’ first and most significant award. In 1993, June Morris was awarded Utah’s award for running the largest women-owned business in the state. This soon became the biggest in the country.
Southwest Threat
As Morris had styled themselves on Southwest, mimicking many of the strategies that made Southwest so successful. However, June Morris and David Neeleman also implemented several strategies that made Morris more successful.
When Morris was a charter airline, or had just started being a scheduled airline, this wasn’t an issue. After all, Morris and Southwest only competed on a few routes to begin with.
Over time, however, Morris began to expand. As it expanded, it started competing on more routes with Southwest, eating in to their already slim profit margins. For Southwest, this was the first real contender to their throne.
Southwest had several avenues to “deal” with Morris. The three main ways to compete with Morris was: to do nothing, buy/merge with Morris and/or continue to compete with Morris on their home turf.
Originally, Southwest chose to continue to compete with Morris in the hopes of using their trusted name to do better than Morris. But as Southwest expanded westwards, new measures would have to taken to compete with Morris.
One of the things that made Morris particularly worrying for Southwest was Morris’ e-ticketing system. It is a common misconception that Southwest invented e-ticketing, but they actually got it from Morris.
Morris also operated a fleet of 25 737-300 aircraft (which also happen to be historically dangerous aircraft). This caused tension with deliveries- many of the 737s Morris bought delayed Southwest deliveries.
The Buyout
In late 1994, June Morris began to consolidate her travel agency- at the expense of her health. As such, she began to look elsewhere, citing health complications.
This was the opportunity that Southwest had been looking for. Instead of trying to compete with Morris Air on the routes they operated, Southwest could have double the routes.
Southwest soon opened negotiations with Morris about selling her airline. Many media and business pundits at the time pointed out that Southwest was eight times the size of Morris.
However, for Southwest, the move made sense. Before the takeover, the Southwest board of executives made acquiring Morris their biggest priority. After the takeover, the Southwest board issued a statement (as is common with takeovers) stating:
“[…] The largest growth of its kind in our company’s history.”
During private talks with June Morris, Southwest discussed taking over Morris Air from her. By the end of these private talks, Southwest had agreed to buy 100% of the shares from June Morris, for $129 million.
After a standard investigation by the Justice Department (to prevent monopolies) Morris Air and Southwest officially merged. The merger allowed Southwest to have 12 more routes and hubs that it couldn’t have had otherwise.
The Legacy
The Southwest-Morris merger benefited Southwest and the airline industry immensely.
Southwest
Southwest took Morris’ 737-300 aircraft. These aircraft were first operated in a Morris livery with the Southwest name plastered on them. As time passed, Southwest gave the former Morris-737s a new yellow livery to distinguish them.
Alongside the aircraft, Southwest also took many former Morris routes. Many of these routes are still used by Southwest today, some even being incredibly important and profitable routes.
But the most important legacy that the Southwest-Morris merger left was e-tickets, or ticketless tickets. E-tickets had started out at Morris Air, the brainchild of Stuart Thatcher, a Morris employee.
Soon, Morris began rolling out e-tickets on all of their flights. After the merger, Southwest integrated e-tickets with their vastly bigger network, which gained a lot of media coverage and resulted in other airlines soon introducing their own e-tickets.
Airline Industry
Morris Air also left its mark on the aviation industry itself. Despite selling her airline for health reasons, June remained on the board of directors for Southwest until 2006.
In the agreement signed by June Morris and David Neeleman, neither could start or run their own airline for four years. Where June had no intention (as to consolidate Morris Travel), David had such intention.
In 1996, David Neeleman, alongside several other investors, launched WestJet. This in itself has led to many legacy carriers to implement new reforms that have benefited the industry as a whole.
However, David Neeleman didn’t stop there. In 1998, he launched JetBlue, the first airline to combine Silicon Valley know how with the airline industry’s “no frills” philosophy.
In 2008, David Neeleman launched Azul Airlines in his native Brazil, which has dealt a serious blow to LATAM, Avianca and many other major Latin American airlines.
In late 2020, David Neeleman hopes to launch Breeze Airways to deal a major blow to the other low cost airlines in the US, including Southwest, Allegiant and Spirit (but keep it from being hated like Allegiant and Spirit).
Did you ever fly on Morris Air? What were your thoughts? Tell me in the comments!