Southwest Airlines Announces Board Shakeup, Retirements

A traveler walks through the Southwest Airlines ticketing counter area at the Los Angeles International Airport in Los Angeles on April 18, 2023. Jae C. Hong/AP Photo

Southwest Airlines announced major changes on its board of directors on Tuesday with approaching retirements, new appointments, and restructuring of executive committees.

Six directors and the executive chairman, Gary Kelly, will retire as the company seeks to fill four leadership positions, the airline announced.

After eliminating its former executive committee structure, the company will set up a finance committee overseen by the new leadership.

The company said it maintains its support for CEO Bob Jordan and intends to continue to engage with Elliot Investment Management, a company that has been advocating for major shakeups at Southwest, including calling for Kelly’s resignation.

Elliot Investment Management, led by investor Paul Singer, has an investment of approximately $1.9 billion in Southwest and has criticized what it called the company’s “rigid commitment to an approach developed decades ago” that has “inhibited its ability to compete in the modern airline industry,” including its relying on outdated software, a dated monetization strategy, and antiquated operational processes.

In a statement about the resignations, Elliot Investment Management said it was pleased with the news and that the board appeared to recognize the degree of change needed at the company.

“The need for thoughtful, deliberate change at Southwest remains urgent, and we believe the highly qualified nominees we have put forward are the right people to steady the Board and chart a new course for the airline,” the company said.

Meaningful Change

Kelly, who worked for Southwest for 38 years, wrote in his retirement letter that there was a need for change in the wake of past difficulties such as the pandemic and inflation that have led to a reduction in performance.

“We are taking swift and bold action, and we will overcome these challenges, too,” he said. “The Southwest leadership team, with oversight from the Board, has been pursuing meaningful, tactical changes to the route network; revenue management techniques; and marketing, merchandising, and distribution methods.”

Kelly became board chair in 2008 after beginning with the company as an air traffic controller in 1986. He said the company’s value has increased 60-fold over the past 47 years despite economic disruptions such as war, recession, 9/11, and oil price spikes.

He praised Jordan’s leadership, saying he has a proven track record and “has what it takes to lead Southwest through a significant transformation and usher in a new era of profitable growth, innovation, and industry leadership.”

Board members David Biegler, Veronica Biggins, Thomas Gilligan, William Cunningham, Jill Soltau, and former U.S. Sen. Roy Blunt will also be retiring.

In his letter, Kelly said there’s wisdom in knowing what can and can’t be changed.

“We know we will need to continually bring in new talent—in leadership and on the Board,” he said. “We know we will need to continue to invest and transform. All that is underway, while carefully evaluating the choices and executing with excellence the committed plans. Maintaining the core, the essence of Southwest while transforming the business is not mutually exclusive.”