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Southwest Names the Airline’s Next Chief Executive

Date: June 23, 2021

Southwest Airlines, the first large U.S. airline to return to making money after the pandemic crushed air travel, is swapping out one longtime executive at the top for another.

After nearly two decades leading the airline, Gary C. Kelly, Southwest’s chief executive, will step down next year, the airline said on Wednesday. He will be replaced by Robert E. Jordan, a top executive who has held a number of jobs at the company. Both men have worked for Southwest since the 1980s.

Mr. Kelly, 66, has been in the top job since 2004, expanding Southwest into the nation’s largest airline by passengers carried, overseeing its acquisition of AirTran Airways, introducing international flights and guiding the company through the financial crisis and the coronavirus pandemic.

Mr. Jordan, 60, an executive vice president who oversees communication and outreach and human resources, will become chief executive on Feb. 1. Mr. Kelly will become executive chairman of the airline’s board and is expected to remain in that role at least through 2026.

“The good thing is Southwest is promoting someone who knows the company, its culture, its strengths and its weaknesses,” said Henry Harteveldt, president of Atmosphere Research Group, a travel market research firm in San Francisco. “That’s really important.”

The pandemic, which devastated the airline business, has eased in the United States. Analysts believe that the industry will rebound strongly this summer, driven mainly by domestic leisure travel, and Southwest appears well positioned to take advantage of the rising demand for tickets.

“I think the timing is perfect,” Mr. Kelly said in an interview. “We’re just closing the books on celebrating 50 years last week and I like the imagery of kicking off the next 50 years with strong, fresh leadership.”

Southwest entered the pandemic in better financial health than other large airline companies. After suffering its first loss in nearly half a century last year, the company, which is based in Dallas, reported a profit in the first quarter, something the three other large airlines have yet to do since the pandemic began. Mr. Kelly said the company’s quick turnaround wouldn’t have been possible without loans and grants from the federal government.

Unlike its three largest competitors — American Airlines, Delta Air Lines and United Airlines — Southwest flies mostly within the United States and its international flights are to Mexico and other nearby countries that remain popular destinations for U.S. travelers. Its business should recover faster because it does not fly to Europe, Asia and other distant destinations for which travel demand is widely expected to recover slowly.

The airline has added flights to and from more than a dozen new airports since the pandemic began, including George Bush Intercontinental in Houston and O’Hare International in Chicago. This month, Southwest also revealed it had more than doubled an order for Boeing’s 737 Max airplane next year, committing to take 64 jets with the option to buy dozens more.

Still, Southwest will most likely face intense competition, particularly as smaller airlines, including Sun Country, Frontier and Sprit, try to expand and the other three large airlines shift more of their focus to domestic flights while international travel is depressed. Southwest also saw widespread delays and cancellations last week as it dealt with technical problems, first involving a supplier of data and then with its own systems.

Known for his jovial demeanor, Mr. Kelly, an accountant by training, has led Southwest with a steady hand. He is widely respected in the corporate world and is Southwest’s second-longest-serving chief executive, behind only Herb Kelleher, the airline’s charismatic co-founder, who died in 2019.

Mr. Jordan will be the airline’s sixth chief executive. And while he takes over a robust business, he will have to manage Southwest’s expanding network, try to preserve the airline’s quirky corporate culture — Southwest flight attendants, for example, frequently crack jokes and wear much less formal attire than attendants at other big airlines — and repay billions of dollars in loans it took out during the pandemic.

“If things are more erratic, I think that will be more of a challenge,” Mr. Kelly said.

The Transportation Security Administration screened 2.1 million people at airport checkpoints on Sunday, the most since the pandemic began. But that figure is down 23 percent from the same day in 2019. And while strong demand this summer seems likely, analysts have less confidence in what demand will look like in the fall and winter.

Mr. Jordan’s experience as a jack-of-all-trades may serve him well. He joined Southwest in 1988 as a computer programmer. Since then, he has held a number of finance, strategy, planning and other executive jobs. He helped develop the airline’s frequent flier program.

In 2011, Mr. Jordan was put in charge of integrating AirTran Airways after Southwest bought the company. That deal was unusual because unlike the other big U.S. airlines that were created by mergers between companies like Northwest and Delta and United and Continental, Southwest has grown mostly by adding new routes and airports to its network.

“I’m just blessed beyond belief,” he said in an interview. “The company has evolved and changed just so much, but the DNA of the Southwest Airlines that I walked into 33 years ago is completely in place today.”

In statements, the unions representing pilots and flight attendants, which have relatively good relations with Southwest’s management, thanked Mr. Kelly and welcomed Mr. Jordan.

“His technology and operational experience will be critical to our airline’s future,” Capt. Casey Murray, president of the Southwest pilots’ union, said in a statement about Mr. Jordan.

Before Wednesday’s announcement, analysts believed Tom Nealon, Southwest’s president, and Mike Van de Ven, its chief operating officer, were in the running to succeed Mr. Kelly. Both men frequently represented the company in public, especially during quarterly calls with analysts and reporters, while Mr. Jordan made fewer such appearances. Mr. Kelly praised Mr. Nealon and Mr. Van de Ven in the company’s announcement and said all three were working on the transition.

 

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