September 19, 2021

Biz Journal

Business perfection

Southwest Airways CEO Gary Kelly to Step Down in February

Gary Kelly,

who has served as chief govt of Southwest Airways Co. for almost 17 years, will step down in February, handing the reins to an organization veteran because the service plots its path out of the coronavirus pandemic.

Bob Jordan, 60 years previous, a longtime Southwest govt who’s the airline’s govt vp of company companies, will take Mr. Kelly’s place as CEO, the corporate mentioned. Mr. Kelly, 66, will turn out to be govt chairman and plans to serve in that function via a minimum of 2026 on the discretion of the corporate’s board.

Not like main rivals, Southwest has prevented bankruptcies and layoffs. However Covid-19 halted the airline’s 47-year streak of annual earnings. Like opponents, Southwest took on billions of {dollars} of further debt to outlive—one thing Mr. Jordan must handle.

Bob Jordan, govt vp of company companies, has been with Southwest since 1988.



Picture:

Andrew Harrer/Bloomberg Information

After an almost $3.1 billion loss in 2020, Southwest was the primary U.S. service to return to profitability within the first quarter of this yr, on account of an inflow of presidency assist. It has launched into an aggressive development trajectory, with 18 new locations introduced since early 2020.

“Bob inherits a stable technique and nice momentum to proceed the airline’s restoration because the COVID pandemic wanes,” William Cunningham, Southwest’s lead director, mentioned in an announcement.

Whereas Mr. Kelly has been a extra low-key presence in contrast with Herb Kelleher, Southwest’s chain smoking, Wild Turkey ingesting co-founder, he presided over a interval of transformative development, roughly doubling the variety of airports Southwest flies to and pushing into worldwide markets. Underneath Mr. Kelly, Southwest solidified its place as the most important service of U.S. passengers whereas preserving lots of the airline’s distinctive attributes, similar to free checked luggage and no change charges.

Southwest started flying 50 years in the past and rapidly emerged as a menace to established carriers with its rock-bottom fares and shrewd use of secondary airports. When Mr. Kelly took the helm in 2004, the airline was growing old out of its standing as a disruptive upstart. It confronted aggressive stress from a brand new crop of low cost airways providing even cheaper, no-frills fares, and shrinking variety of untapped markets to proceed its fast tempo of enlargement.

Mr. Kelly rapidly made daring strikes that deviated from Southwest’s authentic formulation, main Southwest’s cost into extra crowded and aggressive airports together with Denver Worldwide Airport and LaGuardia. He efficiently battled to overturn an arcane legislation that restricted long-haul flights from Dallas’s Love Area Airport, the place Southwest dominates service. And he spearheaded a merger with AirTran Holdings Inc. that introduced Southwest into worldwide markets.

In 2018, Southwest had its first passenger fatality when an engine cowl broke off and blasted out a window on a New York-to-Dallas flight. A passenger was partially sucked out and died.

The almost two-year grounding of the Boeing 737 MAX stymied among the airline’s enlargement plans in 2019 and introduced Southwest into battle with its sole airplane provider. Mr. Kelly made his displeasure with Boeing clear and mentioned the airline had an obligation to take a look at different plane varieties. This yr the airline doubled down on the MAX with a giant order, hewing to the airline’s longtime choice of working only one kind of aircraft.

Mr. Jordan, Southwest’s incoming CEO, has been with the corporate since 1988. Throughout a spread of roles, he oversaw the AirTran acquisition, the event of a brand new e-commerce platform for Southwest’s web site and the corporate’s Fast Rewards loyalty program, the airline mentioned.

Write to Alison Sider at [email protected]

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