Southwest Airlines was incorporated as Air Southwest Company by Rollin King and Herb Kelleher. Kelleher believed that by operating solely within the State of Texas an airline could avoid federal regulation — meaning they would be free to fly without Civil Aeronautics Board permission. It would also mean they wouldn’t have to charge the high fares mandated by the CAB.
King and Kelleher, together with banker John Parker, are said to have sketched out the idea for the airline on a napkin in a San Antonio restaurant.