Before 1967, when it was incorporated, the company was known as Air Southwest. Rollin King, entrepreneur and cofounder of Southwest, served as the airline's first chairman, president, and chief executive officer, and he was for many years the company's largest shareholder.

Southwest Airlines was originally incorporated as Air Southwest Co. on March 15, 1967. The company was founded by Herb Kelleher and Rollin King with the goal of providing low-cost, "no-frills" air travel within the state of Texas, specifically serving the "Golden Triangle" of Dallas, Houston, and San Antonio. The name change to Southwest Airlines Co. occurred in 1971, just before their first commercial flights took off. The airline's early history was defined by a legendary legal battle with Braniff, Trans-Texas, and Continental Airlines, who tried to block them from flying for nearly four years. This "David vs. Goliath" origin story shaped Southwest’s defiant and humorous corporate culture, which persists in 2026. While the name has remained consistent for over five decades, their early "Air Southwest" roots are still celebrated in their "Retro" livery planes and at their headquarters at Love Field in Dallas. They are the pioneers of the "Low-Cost Carrier" (LCC) model that revolutionized the global aviation industry, proving that "Air Southwest" could indeed grow from a Texas startup into one of the largest domestic airlines in the world.