Southwest Airlines Co. (LUV, Financial) announced on Wednesday that longtime Chairman and CEO Gary Kelly will be transitioning roles in early 2022 to become executive chairman, a position he plans to hold until at least 2026.
The low-cost airline also revealed Kelly will be succeeded by company veteran Robert Jordan, who is currently the executive vice president of corporate services. He will step into his new role on Feb. 1, 2022, with big shoes to fill.
After taking the top job in 2004, Kelly navigated the Dallas-based airline, which recently celebrated its 50th anniversary, through turbulent times in the industry, including the financial crisis, a merger, the grounding of Boeing’s (BA, Financial) 737 Max and the Covid-19 pandemic.
"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,” William Cunningham, Southwest’s lead director on the board, said in a press release. “We are thrilled he is willing to continue to serve as the Board's Executive Chairman, subject to the annual elections process.”
While the company recorded its first annual loss since 1972 last year as a result of the pandemic, revenue has been growing over the past several months on the back of increasing travel demand in the U.S. As such, Jordan will have his work cut out for him as the company works to capitalize on the revival of the airline industry.
Fortunately, this should not be too much of a challenge for Jordan. Having joined the company in 1988, Southwest said he has “broad and deep experience” as an executive. Among the transformational projects he spearheaded were the 2011 acquisition of rival AirTran Airways, the airline’s frequent flyer program and a series of buyout and other programs to reduce labor costs during the pandemic.
In a statement, Kelly expressed confidence in his successor.
"Bob and I have worked side by side for more than 30 years. He is a gifted and experienced executive and well-prepared to take on this important role,” he said. “Working closely with President Tom Nealon and Chief Operating Officer Mike Van de Ven, we will begin developing transition plans in the coming weeks and months. These three top-notch Leaders make for a powerful team to lead us forward."
As for Jordan, he is “humbled, honored and excited to be asked to serve as the next CEO."
"The Heart of Southwest is our People; they make the difference for our Customers, and I look forward to serving them,” he said. “We have a terrific team of Leaders, many of whom I have had the joy of working alongside for decades. I'm looking forward to working with Gary, Mike and Tom on the transition effort and setting up Southwest for the next 50 years of giving Customers the Freedom to Fly."
Following the announcement, shares of Southwest were down 0.91% at $55.24. After posting a -13.65% return in 2020, GuruFocus estimates the stock has climbed nearly 20% year to date.
