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Southwest Airlines will get its first new CEO in nearly two decades next February when Gary Kelly passes the reins to Robert Jordan.
On February 1, 2022, Jordan will become only the sixth CEO of the Dallas-based carrier , which celebrated its 50th anniversary earlier this month. He joined Southwest in 1988 and, after serving in multiple roles, is currently executive vice president of corporate services.
Kelly, who has been CEO since 2004, will become the airline’s executive chairman. His retirement has long been expected with rumors dating to at least 2015.
“Gary has been an outstanding CEO for Southwest for nearly two decades and has developed an excellent group of senior leaders to shepherd the airline into its next 50 years,” said William Cunningham, the lead director on Southwest’s board, in a statement. “Bob inherits a solid strategy and great momentum to continue the airline’s recovery as the Covid pandemic wanes.”
The transition comes as the airline industry emerges from the worst crisis in its history. U.S. flyer numbers fell 60 percent to 368 million in 2020 compared to the year before. And the industry lost a collective $35 billion after turning a $49.8 billion net profit in 2019.
Southwest posted its first annual loss in 47 years in 2020 as a result of the coronavirus pandemic that decimated air travel demand. However, with the help of government relief, the airline avoided involuntary furloughs and used the crisis to significantly expand its route map. It has announced or launched service to 18 new cities — including Miami, Palm Springs and Steamboat Springs, Colo. — since the crisis began in March 2020.
The airline is known for long-serving leaders. Before Kelly’s tenure, Southwest’s arguably best-known CEO, Herb Kelleher, led the airline for 20 years from 1981 to 2001. Kelleher transformed the carrier from a small airline serving Texas and surrounding states into a national carrier with dominant positions in some of the largest U.S. domestic markets, including California.
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Jordan will guide Southwest through the recovery, which is expected to take years. U.S. leisure traveller numbers have or are expected to recover to pre-crisis levels this summer but business travelers — a highly sought after and lucrative segment for airlines — are expected to return to the skies at a much slower rate. Kelly has warned that it could be up to a decade before business travel fully recovers.
Southwest’s “biggest competitive advantage is its focus and its culture, and Jordan will protect those things,” wrote Wolfe Research Analyst Hunter Keay on the transition on Wednesday. His biggest challenges will similarly be protecting that culture as well as predicting the future for the airline.
Jordan inherits a somewhat established path for Southwest. The airline has ordered 134 Boeing 737 Max 7 jets since March to replace its 737-700 fleet over the next decade. And, in 2020, it expanded the availability of its flights on global distribution systems popular with corporate travel managers to woo more business travelers. Both of these will help guide Southwest’s growth over the next decade.
During his 30-plus year tenure at Southwest, Jordan has worked on numerous initiatives including the development of the airline’s website and evolution of its frequent flyer program. He oversaw the integration of AirTran Airways, which Southwest acquired in 2010.
Updated with comments from Wolfe Research Analyst Hunter Keay.