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Southwest CEO Gary Kelly to hand reins to insider Robert Jordan

Stock MarketsJun 23, 2021 01:20PM ET
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© Reuters. FILE PHOTO: A Southwest Airlines Boeing 737-800 plane is seen at Los Angeles International Airport (LAX) in the Greater Los Angeles Area, California, U.S., April 10, 2017. REUTERS/Lucy Nicholson

By Ankit Ajmera and Tracy Rucinski

(Reuters) -Southwest Airlines Co said on Wednesday long-time Chief Executive Officer Gary Kelly will step down next year and be succeeded by insider Robert Jordan as the company pushes past the coronavirus pandemic that hammered travel demand.

Low-cost carrier Southwest took an aggressive strategy during the pandemic, launching service to more than a dozen new cities and sealing a major aircraft order with Boeing (NYSE:BA) Co. It has said it expects to stop burning cash by June.

"The challenges more than anything are executing as we come out of the pandemic," Jordan told Reuters.

"We have a lot of hiring to do and it's a very competitive hiring environment out there," he said.

Jordan, 60, joined the airline in 1988, and has served in roles including director of revenue accounting and corporate controller, among others. He will take charge effective Feb. 1, 2022.

Kelly, 66, became the CEO in 2004, has led Southwest through some of the airline industry's most turbulent times over its 50-year history.

As CEO, he spearheaded several initiatives, including the acquisition of AirTran Airways, the launch of international destinations for the first time in Southwest's history, and the introduction of the Boeing 737 MAX 8 into the airline's fleet.

Jordan was also involved in the AirTran deal and led the development of the company's new e-commerce platform and its Rapid Rewards loyalty program.

During the pandemic, he played a key role in reducing the airline's labor costs and avoiding layoffs and furloughs, the company said.

Southwest's shares were down 0.8% at $55.32 in early afternoon. The stock has more than tripled in value during Kelly's tenure.

"There’s a lot to step into," Jordan said, adding that his first areas of focus will be ensuring a stable transition and getting out with team members.

Southwest did not consider any external candidates for the job, Kelly said.

"We’ll continue to stabilize the company coming out of this pandemic and be ready for what I hope will be a really strong 2022 with a lot of momentum," he said.

This is the latest transition at the top at a major U.S. airline.

Rival United Airlines last year named insider Scott Kirby (NYSE:KEX) to succeed Oscar Munoz to the top job.

Kirby landed at United from American Airlines (NASDAQ:AAL) in 2016 after the board passed over him as a potential leader.

Following Kirby's departure, American elevated Robert Isom, then chief operating officer, to the role of president. Isom is heir apparent to American Chief Executive Doug Parker.

Southwest CEO Gary Kelly to hand reins to insider Robert Jordan
 

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