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1980s–90s

Southwest hired their first black pilot, Louis Freeman, in 1980. In 1992 he was named the first black chief pilot of any major U.S. airline.

Southwest's Houston Pilot Base opened on June 1, 1984. Houston was their first crew base outside of Dallas.

 A 737–300 (N648SW) pictured in Southwest's original desert gold livery. On November 30, 1984 Southwest took delivery of their first Boeing 737–300. Southwest was the launch customer and as of May 2012 is the largest operator of the aircraft type. The first 737-300 was dubbed "Kitty Hawk."

Southwest paid US$60.5 million in stock and cash for Muse Air when Muse was on the verge of collapse in 1985. After completing the acquisition, Southwest renamed MuseAir TranStar Airlines. TranStar became a wholly owned subsidiary of Southwest and operated as an independent airline. Unwilling to compete in a fare war against Frank Lorenzo's Texas Air, Southwest eventually sold TranStar's assets to Lorenzo in August 1987.

Southwest moved into their current headquarters in 1990. Previously, the airline was headquartered in the 1820 Regal Row building in Dallas, by Love Field. At that time the headquarters had 256,000 square feet (23,800 m2) of space and approximately 650 employees.[25] The current headquarters facility was built at a cost of $15 million in 1990 dollars. In early 1995 the building received an additional 60,000 square feet (5,600 m2) of space. As of 2006 about 1,400 employees worked in the three story building.

In 1990, the airline registered their aircraft in Houston so they could pay aircraft taxes in Houston, even though the actual corporate headquarters were in Dallas. Southwest was not physically relocating any assets, but Texas state law allowed the airline to choose either Dallas or Houston as the city of registry of their aircraft.

Southwest acquired Morris Air, a competing airline based in Salt Lake City, Utah, in 1992, paying US$134 million in stock.[28] After completing the purchase, Southwest absorbed the capital and routes of Morris Air into Southwest's inventory and service, including Morris' Pacific Northwest destinations not previously served by Southwest.[29] One founder of Morris Air, David Neeleman, worked with Southwest for a short period before leaving to found WestJet and then JetBlue Airways, a competing airline.

Boeing 737-200 in Midway Airlines/Southwest Airlines hybrid livery in 1991 On March 16, 1995, Southwest became one of the first airlines to have a website. Originally called the "Southwest Airlines Home Gate", passengers could view schedules, a route map and company information at Iflyswa.com. Southwest.com is the number one airline website for online revenue, according to PhoCusWright. Nielsen/Netratings also reports that Southwest.com is the largest airline site in terms of unique visitors. In 2006, 70 percent of flight bookings and 73 percent of revenue was generated from bookings on southwest.com. As of June 2007, 69 percent of Southwest passengers checked in for their flights online or at a kiosk.

Southwest Airlines gained a reputation for "outside the box thinking" and proactive risk management, including the use of fuel hedging to insulate against fuel price fluctuation. Some analysts have argued against the style of profit-motivated energy trading Southwest did between 1999 and the early 2000s. They suggested that rather than hedging business risk (such as a hedge on weather to a farmer), Southwest was simply speculating on energy prices, without a formal rationale for doing so.

At present, Southwest has enjoyed much positive press (and a strong financial boost) from their energy trading skills. However, while most analysts agree that volatility hedges can be beneficial, speculative hedges are not widely supported as a continuing strategy for profits.

In March 1996, after the Dallas City Council unanimously voted to allow for construction, the airline began to build a 300,000 square feet (28,000 m2) addition to the existing corporate headquarters at a cost of $30 million in 1996 dollars. This occurred after, on Wednesday March 13, 1996, . The airline leased two additional tracts of land, a total of 10 acres (4.0 ha) of space, from the City of Dallas to build a new pilot training facility, a headquarters expansion, and additional parking spaces. A $9.8 million new pilot training facility was built on a 5 acres (2.0 ha) plot of land owned by the city of Dallas; it was scheduled to be completed Spring 1997. With the new pilot training facility built, the old one would be removed and the company would expand its headquarters building on the former training facility site. 120,000 square feet (11,000 m2) of building space, which had a price of $16 million including fixtures, was built, making the headquarters have a total of 436,000 square feet (40,500 m2). The airline also leased 4.8 acres (1.9 ha) from the city of Dallas to build additional parking; 700 spaces were added to the existing 1,200. After the expansion, Southwest had a total leasehold of about 24 acres (9.7 ha) of land, including its headquarters, training facilities and parking. By the end of 1997 the expansion of the facilities at Love Field and several terminal improvements were expected to cost Southwest $47 million.