That's correct. Love was supposed to close but Southwest got in. Weren't they in on the basis that they would fly only intrastate, though? Then they fought for and gradually accumulated permission to fly out of state. It's been a very legalistic thing, but inevitable given all the parties involved. The free market's a marvel.... regulated economies are a nightmare.
I think you are right on that, but it's too late for me to Google and make sure. I do know that they started as an intrastate carrier. I don't know if they expanded out of state before deregulation or not.