Incoming Southwest Airlines CEO Robert Jordan sees the pandemic's road to recovery in four stages: Survive, stabilize, repair, and prosper. Right now, he says his airline is still in the stabilize phase.
Southwest Airlines is not only dealing with the worst crisis in the history of the airline industry, but it’s also dealing with a leadership transition. Gary Kelly, CEO since 2004, is stepping down next year, to be replaced by Robert Jordan, currently executive vice president for corporate services. Jordan is no stranger to Southwest, having joined the company 33 years ago in its IT department.
And that informs his vision for the airline. Jordan says he plans to stay the course set by Kelly. That means more expansion into major markets, like Chicago O’Hare and Miami, and more of a focus on business travelers — at least in the long term — and a focus on leisure demand in the near term. Like Kelly, Jordan believes business travel could take years to recover. This is a sharp contrast to other U.S. airline leaders, who sound a more optimistic note on business travel’s recovery.
For now, though, Southwest is at a crossroads thanks to the coronavirus. Although the carrier still can boast of not having furloughed or laid off a single employee in its entire history, its staff is much smaller than it was before the pandemic, due to voluntary buyouts and extended leaves of absence it offered to reduce headcount during the worst parts of the crisis. One of the first challenges Jordan will face is building the staff back up to meet growing travel demand. The second is confronting a virus that just won’t quit.
“I think we were all hopeful and optimistic the worst was behind us back in the spring,” Jordan said of the resurgence of the Covid-19 pandemic. Still, he is confident that Southwest’s renewed focus on leisure routes — it added 18 mainly “surf and ski” destinations during the pandemic — will stand it in good stead as travel starts to recover.
Jordan discusses these and more issues facing Southwest in the following interview.
Editors Note: This interview has been edited for length and clarity.
Skift: Congratulations on the new role, but now is perhaps the most difficult time in the history of aviation. What do you see as your top challenges and opportunities on Day 1? And how do you think Southwest will navigate out of the crisis in the near- and medium terms?
Robert Jordan: Thank you! I will tell you I was truly humbled but incredibly honored to be named the next CEO of Southwest Airlines. Never in my wildest dreams did I think that was in the cards for me. And you’re right, this is the most challenging time in our industry’s history—no question. But you know, the airline industry is not for the faint of heart, and I think we’re all battle tested and enjoy the challenges this industry brings. I’ve been at Southwest for 33 years and had 15 jobs over that time period, so I have the benefit of experience to help guide us forward.
My immediate focus is to ensure a smooth transition, and I’m pleased to report it is going exceptionally well. And I’m comforted in knowing that Gary is not retiring — he’ll stay on as executive chairman for several years, just like Herb [Kelleher, Southwest’s founder and former CEO, who died in 2019] did before him. My top priorities are simple—spend a lot of time communicating and spend as much time with our employees as possible. So, since the announcement I’ve been out in the field, in training classes, in town halls, and more to listen to our people and let them get to know me better. And we’re utilizing all of the wonderful technology tools and social media to help with that, as I can’t be everywhere. So that has been job number one, and it will continue into next year and beyond.
Skift: What is your vision for the long-term future of Southwest, and how does that differ from your predecessors’?
Jordan: I don’t think my vision for Southwest is that different than Gary’s [Kelly, Southwest’s current CEO]. I’ve worked for Gary for 33 years and have been intimately involved in our planning for the future. So I wouldn’t expect any radical departures moving forward. Our vision is to be the world’s most loved, most flown, and most efficient airline. I have also been spending a lot of time getting 2022 organized, and getting clear about what is most important, especially as we continue to emerge from the pandemic.
Skift: Turning to now, however, and what will likely be an issue on Day 1: How has the spread of the Delta variant changed Southwest’s calculus for the rest of the year? Have you scaled back flying or destinations? When do you think the recovery will be on a more stable footing?
Jordan: The Delta variant and accompanying fourth wave of this pandemic have been disappointing for all of us. I think we were all hopeful and optimistic the worst was behind us back in the spring. The name of the game since the pandemic began has been to be flexible and pivot. We have been modifying our flight schedule frequently going all the way back to March 2020 to do our best to match supply with demand. In this current environment, we have had to scale back our schedule to bring some stability to our operation and some relief for our people. Those adjustments are in place through the end of this year, and we’ll continue to constantly monitor and adjust as need be.
We’re viewing the road to recovery in four stages: Survive, stabilize, repair, and prosper. Right now, we’re in the stabilize phase. I wish I had a crystal ball to tell you when we’ll be back to prosperity, but I’m incredibly optimistic about our opportunities and success over the long-term.
Skift: Southwest, like most U.S. airlines, has retooled its route network since the pandemic began. What has worked, and what hasn’t? Do you see your network skewing more heavily toward leisure/visiting friends and relatives (VFR) or business as the airline emerges from the crisis? What lessons has the pandemic taught Southwest about network planning and the mix of leisure and business flying?
Jordan: Far and away, our biggest success has been the aggressive expansion of our footprint to launch service to 18 new airports since the pandemic started. Many of these have long been on our wish list, but it might have taken us a decade to eventually get to them all. We realized very quickly we had idle aircraft and people that we could put to work to introduce Southwest service to these markets to win more customers and generate revenue. And it’s worked exceptionally well — better than we even hoped.
Most of these airports are geared toward leisure travel, so think surf and ski. Places like Steamboat Springs, Bozeman, Palm Springs — and the list goes on and on. But we’ve also found success launching service to airports like Chicago O’Hare, Miami, and Intercontinental in Houston. It’s no secret that leisure travel has been a focus, as we know the return of business travel can take years to recover.
Skift: Several airlines have implemented vaccine mandates for employees. Will Southwest, now that at least one vaccine has full FDA approval? If not, why? And does Southwest have a position on whether vaccines should be required of passengers?
Jordan: As far as a mandate for our employees, we have not taken that step. We have strongly encouraged all of our employees to get vaccinated, and we continue to do so. It’s clear from the science and data that vaccinations are the best and only path to getting this pandemic behind us, and it’s also clear that the unvaccinated are faring far worse during this Delta variant than those vaccinated. One can never say never, but it’s my hope we don’t have to resort to mandates. [Editor’s Note: Since this interview, President Biden announced that all companies with more than 100 employees must require workers be vaccinated or be tested weekly. Southwest said it intends to comply with the Labor Department’s rule.]
As for passenger mandates, I think that’s a question for the federal government to explore and answer. It’s not something we’re advocating for.
Skift: Will bags still fly free?
Jordan: Yes! Bags fly free and no change fees are part of the DNA of Southwest Airlines — now and always.
Photo credit: Robert Jordan, Southwest's incoming CEO, says his vision for the company builds on his predecessors, current CEO Gary Kelly and founder Herb Kelleher. Eric Salard / Wikimedia Commons