New Southwest CEO Takes Over, Faces Challenges
Southwest Airlines suffered two major disruptions in 2021, with massive amounts of delays and cancellations in May of that year and again in October.
And that’s not even counting the meltdown over the Christmas and New Year’s holiday that struck all airlines due to staffing shortages and airline employees calling in sick with the Omicron variant of COVID-19.
That’s just one of the challenges facing Robert Jordan as the longtime Southwest employee took over today, February 1, as the airline’s new CEO.
Jordan replaces beloved CEO Gary Kelly, who was at the helm for 17 years.
Jordan has been with Southwest since 1988, and he’s been slowly groomed for the top spot. But he’s already cutting his own path, saying last month even before he took over that he would consider changing Southwest’s long policy of not assigning seats.
But that’s the least of his concerns right now.
Some of the challenges he faces are certainly not Southwest-centric. The industry as a whole has been battered by the pandemic the last two years, with business travel still lagging far behind leisure travel. Southwest actually suffered its first yearly loss in 2020 in the 50-year existence of the airline.
The Dallas-based carrier rebounded in 2021 and expects a profit in 2022.
Another industry-wide problem is staffing.
Like most other airlines, Southwest offered buyouts and early retirement to employees during the pandemic to help further trim staff. Like most other airlines, Southwest did not anticipate the pent-up demand and sudden rebound in travel last spring and found itself literally caught short-handed.
“We were hiring about 5,000 this fall, and if you remember, we had about 5,000 that took early retirement (in 2020 and 2021), so we’re making really good progress,” Jordan told the Associated Press in an interview last month. “It is harder than normal. We get plenty of applications, we just 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 it takes into the summer to get caught up here.”
But Jordan will have to figure out the answers to some challenges that are unique to Southwest, such as the operations issues that caused the May and October cancellations.
“I think there are some things that we can do to – 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 do think we need to work on, for example, our operational tools,” Jordan said. “… There are probably tools that we can use to more quickly notice problems and provide solutions.”
Jordan said for now that he has no plans to change Southwest’s longtime policy of no bag fees or no change fees. But he will look for ways to, pardon the pun, navigate the company finances through turbulence.
“The (last) 21 months have been tough on people, so I want 2022 to be a year where we really invest in our employees, love on our employees, and then get back to being consistently profitable,” he said. “I’m not arguing (Southwest will be profitable) at the levels that we need long term — I think it’s going to take a little while to get there — but we’ve got to get back to sustained profitability versus off-and-on profitability.”