Southwest Airlines, originally known as Air Southwest. was founded by Rollin King and Herb Kelleher Southwest took its first flight in June 1971. serving three major cities: Dallas. Houston, and San Antonio within the first two years Southwest suffered operating losses and was forced to make a diffcult decision: lay off employees or sell one of its four aircraft. As an early indication of Southwest's loyalty to its employees, it chose to sell the aircraft."This established the company's "no layoff policy" that is still in force