Southwest Airways CEO Kelly, who’s stepping down in 2022, shall be changed with a company veteran
Gary Kelly, Chief Executive Officer of Southwest Airlines Co., speaks during an event in the new Southwest Airlines Co. International Terminal at William P. Hobby Airport in Houston, Texas.
Carter Smith | Bloomberg | Getty Images
Gary Kelly, CEO of Southwest Airlines, will step down in February and spend more than 17 years at the helm building the airline and leading it through crises from the Great Recession to the Covid-19 pandemic.
The Dallas-based airline has named corporate veteran Bob Jordan, executive vice president of corporate services, more than three decades old, as Kelly’s successor and hired him to lead the company’s turnaround.
“I think now is the perfect time,” said Kelly, 66, in an interview. “We have stabilized.”
Kelly will hold the position of executive chairman until “at least” 2026, the company said.
Kelly was in the top job with the low-cost airline during the financial crisis, a merger, aggressive expansion and the grounding of the Boeing 737 Max. The pandemic devastated travel demand, causing Southwest its first annual loss since 1972 last year.
Southwest is now trying to regain a foothold and benefit from an increase in travel demand. This increase is coming from domestic recreational customers in the US, which Southwest is focused on as it carries more US passengers than any other airline. Southwest saw sales soar over the past month for the past month and posted profit for the first quarter of the year thanks to more than $ 1 billion in federal aid.
Jordan, 60, led the 2011 acquisition of competitor AirTran, Southwest’s frequent flyer program, the latest in e-commerce platform and a number of acquisitions and other programs designed to cut labor costs during the pandemic, Southwest said.
“We’re leaving the pandemic in really good shape, especially when compared to our competitors,” Jordan told CNBC.
Jordan said in an interview that his priorities are to fix Southwest’s balance sheet and hire employees to support increasing travel demand. He said if hiring isn’t high on the list next year it’s really tight.
He also said the company’s strategy of aggressively adding targets that ranged from Hawaii to Florida during the pandemic is likely to cool.
“There is still a lot to do to get out of the pandemic,” Jordan said. “You have to play a little offensive and a little bit defensive.”
Southwest stock ended the day down 1% to $ 55.19, more than its peers.