Incoming CEO at Southwest Air faces numerous challenges

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In a matter of weeks, Robert Jordan will become the chief executive of Southwest Airlines, replacing Gary Kelly, the longest-serving CEO among the major US carriers.

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DALLAS — Robert Jordan will inherit a long list of challenges when he becomes the sixth CEO of Southwest Airlines, which is struggling to recover from a pandemic that battered its finances and left it a much smaller company.

Southwest had never lost money in its half-century history for a full year until 2020, when it lost $3 billion. The Dallas-based carrier is likely to end 2021 in the black — it will report results later this month — thanks to more than $1.1 billion in federal pandemic relief.

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Staff shortages contributed to a high number of canceled and delayed flights to Southwest last summer and again in October, after thousands of employees were laid off in 2020. The airline is now on a hiring spree to catch up.

Jordan joined Southwest in 1988 and emerged through a series of finance and strategy jobs, including overseeing the $1.4 billion acquisition of AirTran Airways in 2011. In June, Southwest announced that Jordan would replace Gary Kelly, who is retiring as CEO on February 1. 17 years leading the airline.

Jordan spoke to the Associated Press shortly before Christmas about those flight disruptions, whether Southwest will charge for checking bags, and what kind of legacy he wants to leave. Comments have been edited for a long time.

> You have finished your work. What are you going to focus on first?

a. The company isn’t broken, but… I think there are some things we can do — I’ve used the word modernize. I don’t know if that’s a good word or not because it’s not like we’re behind, but I think we need to work on, for example, our operational equipment. I don’t know if (employees) have all the tools to manage the complex company that we are.

Q. Do you mean the way you reschedule passengers and crew members?

A. It can be a variety of things. When you are in erratic operation (such as cancellations and delays due to weather or other factors), I have aircraft out of place and customers out of place, and need to terminate this aircraft in that maintenance base. the wanted. There are probably tools we can use to notice problems more quickly and provide solutions.

Q. What else?

A. I think we have a great customer experience. But (I) think about things like, is our Wi-Fi as reliable as it should be? I’m not sure it is. Do we need to think about things like whether power (outlets for passengers) in aircraft is important? Can you do everything you need to do to volunteer on your phone as a customer? Am I going to make a drastic change in the airline? I don’t think so, but I think there are areas we can improve.

Q. What about bag fees, change fees, and your open-seating system? Any changes coming?

A. No. We are known for doing things that matter to our customers. No bag fee, no change fee makes perfect sense. It is very difficult for me to imagine that we will go to the designated seating area. There is absolutely no work in rethinking any of those things. But I never say never put the (assigned seating) kind in the bucket.

> You are recruiting. How long have you been a fully employee?

A. We were hiring about 5,000 this fall, and if you remember, we had about 5,000 who took early retirement (in 2020 and 2021), so we’re making really good progress. It is harder than usual. We get so many applications, we don’t get as many applications for open jobs as we used to. We’re hiring even more in 2022, which is why I suspect the summer should be catching on here.

> What’s happening to the wages?

A. The market for wages has shaken and it seems to continue to move up. I don’t know if there is such a thing as minimum wage now because there are wages in the market. Looks like $15 (one hour) has become $18 and $18 could be $20. It’s hard to know when you equalize and when you stop. I think you’re going to continue to see pay pressure for some time.

> How will 2022 be for the airline industry?

a. I think we all wished ’21 was a transition year and ’22 was back to normal, and it’s quite clear that ’22 will continue to be a year of continuous transition. You have staffing questions, there’s just the whole hiring market that everyone is dealing with. You have ongoing supply-chain issues. You have the pandemic, which we all hope will move to an endemic place here at some point. It’s going to temper business and program predictions a bit.

> What does this mean for the company?

A. The (last) 21 months have been tough for people, so I want 2022 to be a year where we really invest in our employees, put love on our employees, and then go back to being consistently profitable. come. I’m not debating the levels (Southwest will be profitable) that we need over the long term — I think it’s going to take a while to get there — but we have to go back to continued profitability versus off-on profitability.

Q. How would you be different or similar to Gary Kelly?

A. I think we are the same when we think through problems and process things. We are both analytical, we are both data-driven. I have a high bias for action. This is good and this is bad – it can be both. I’m probably faster to get an answer and probably need to focus on collaboration, where Gary is highly collaborative. Gary is a people person, I am probably even more of a people person. I used to spend the whole day walking in the halls, talking to people or staying in the stations.

What kind of impression do you want to leave as CEO?

A. I have never been a career-aspiration type person or specifically a title-aspiring person. I have so many opportunities right now and I just went along and liked whatever job I have. I never dreamed that this opportunity would happen. Whenever I go, nothing goes better than two things: One would be that our employees look back and say they feel satisfied, that they love Southwest Airlines. They love that they are able to build a career here that has been good for them and is good for their families. And then the second… be known as someone who has done a good job and grown others, built good teams. So it’s nothing about profits or customer experience or any of that. I think they get along.

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David Koenig can be reached at www.twitter.com/airlinewriter

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