Southwest's ex-CEO turned airline into cult that couldn't recover from meltdowns
January 4, 2023
By Ryan Hogg, Business Insider
The man who ran Southwest Airlines for almost two decades turned it into a "cult" focused on its Dallas headquarters and failed to ensure the carrier could cope with weather-related disruption, a pilots' union official said.
In a scathing open letter dated December 31, Southwest Airlines Pilots' Association vice-president Captain Tom Nekouei accused Gary Kelly of prioritizing shareholders over staff during his time leading the company, and drew a direct link between his actions and its pre-Christmas chaos.
Technical problems forced Southwest to cancel tens of thousands of flights following winter storms.
Captain Mike Santoro, another pilots' union vice-president, told Insider that the airline's "outdated" scheduling software made the disruption much harder to recover from than it otherwise should have.
Nekouei said "systemwide meltdowns" had become more frequent over the past 15 years, and there had never been any real accountability for the airline's decision-makers.
"And now, Gary Kelly's chickens have come home to roost. In true Southwest fashion, our executives continue to apologize and 'accept responsibility' out of one side of their mouths while making banal excuses that deflect from the true cause out of the other side," Nekouei wrote.
Kelly took over as CEO of Southwest in 2004 from Herb Kelleher, who Nekouei said took an more employee-centric approach to operations and processes. Kelly stepped down as CEO in January 2022 but retains a powerful role as executive chairman.
Nekouei said Kelly spent $12 billion buying back the company's stock during his tenure as CEO to maintain the share price — and therefore help boost his remuneration — rather than invest in systems "in desperate need of significant investment and upgrade."
"While Gary's financial acumen cannot be debated, his poor operational leadership and judgment have been demonstrated repeatedly with each meltdown and finally laid bare with the current situation we find ourselves in," Nekouei wrote.
Kelly's decision to bring in other top executives with accounting backgrounds led to "a monetization of the once vaunted Southwest culture and instead turning it into a headquarters-centric cult," he added. "Gary Kelly's only enduring legacy is that he destroyed Herb Kelleher's."
A spokesperson for Southwest Airlines said it had a "more than 51-year history of allowing – and encouraging – its employees to express their opinions in a respectful manner."