Prior to deregulation the Civil Aeronautics Board ‘experimented’ with the idea of price competition and allowed airlines to undercut Southwest Airlines prices. Southwest, flying only inside Texas at the time, wasn’t subject to CAB price regulation.
Texas International Airlines (which would later acquire Continental, Eastern, People Express, and Frontier) along with Braniff started offering $13 fares between Houston and Dellas. Not to be undercut, Southwest introduced a two-tiered fare structure, rebating each customer paying full fare with a bottle of liquor. Southwest became the largest liquor distributor in the state of Texas.