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Bob Jordan is now Southwest Airways’ new CEO. This is what’s on his plate

Southwest Airways Govt Vice President Bob Jordan speaks as he’s interviewed by CNBC outdoors the New York Inventory Alternate (NYSE) in New York Metropolis, U.S., December 9, 2021.

Brendan McDermid | Reuters

Southwest Airlines‘ new CEO, Bob Jordan, has taken on the duty of guiding the service out of the Covid pandemic after two bruising years.

Jordan, 61, who took the reins Tuesday, has 34 years of expertise working at Southwest, overseeing a bunch of initiatives together with Southwest’s community enlargement and the airline’s acquisition of AirTran. His profession has spanned paper tickets to cellular boarding passes.

He replaces Gary Kelly, turning into the Dallas airline’s sixth CEO in its five-decade historical past. Kelly, 66, is staying on as govt chairman after greater than 17 years as CEO, finishing a succession plan unveiled final June.

Prices and labor strain

Jordan faces a bunch of challenges: a profit-crimping surge in bills from gasoline to salaries, strained relationships with labor, hiring struggles, the sluggish return of enterprise journey, and making certain the airline would not repeat pricey operational meltdowns of 2021.

“Simply do the fundamentals proper,” mentioned Brett Snyder, a former airline supervisor who runs the Cranky Flier journey service and web site. “Run a very good operation. For me, that is all that issues.”

Southwest has already dialed again its progress plans.

“If we have to, and I am not predicting we are going to, we’ll proceed to average our capability as a result of we’re going to have a dependable operation for purchasers,” Jordan mentioned in an interview with CNBC on Tuesday.

He estimated that Southwest cannot fly between 35 and 40 of its roughly 730 Boeing 737 planes as a result of it lacks adequate staffing. The airline is planning to finally ramp as much as a fleet of round 1,000 jets.

Southwest is already attempting to handle a few of its issues, elevating minimal wages to $17 from $15 an hour to attempt to employees up. Jordan has mentioned the airline plans to rent 8,000 people this year, after 5,000 final yr, partially the results of dropping hundreds of staff in the pandemic on the firm’s urging, in a bid to chop its labor invoice.

Administration faces contract talks with unions that symbolize its pilots and flight attendants. Each teams have complained about fatigue from grueling schedules and being steamrolled by pandemic coverage adjustments.

“I’ve all the time had loads of respect for Bob,” mentioned Casey Murray, president of the Southwest Airways Pilots Affiliation, which represents the corporate’s greater than 9,000 aviators. “We’re cautiously optimistic that we’ll see a change within the operation.”

Lyn Montgomery, president of TWU Native 556, the flight attendants’ union, described Jordan as “approachable”

“I hope he’ll be extra of a individuals particular person than a quantity cruncher,” she mentioned.

Southwest posted its first profit of the pandemic with out authorities assist in the final quarter. It forecast a first-quarter loss because the omicron variant drove down bookings and sidelined crews, however earnings for the remainder of the yr. Its shares are up 0.9% during the last 12 months, lower than a few of its closest opponents and much shy of the S&P 500‘s greater than 20% achieve.

Higher tech

Jordan mentioned the airline would preserve key insurance policies like not charging ticket change charges or for checked baggage.

“There are loads of issues that simply aren’t going to vary,” he mentioned.

However there are some issues Jordan does wish to enhance. He mentioned the airline might be investing in higher expertise for each clients and staff.

“We will rent hundreds of hundreds. Their expectation of how they have interaction goes to vary,” he mentioned. “A number of that’s going to come back by an app … so we have to work on our worker expertise.”

Vacationers are additionally demanding higher expertise from dependable onboard Wi-Fi to self-service by smartphone apps.

“We’ll be investing in all of that,” he mentioned.

Selling from inside

Typical of the airline business, Jordan, who has a bachelor’s diploma in laptop science and an MBA from Texas A&M College, was a longtime govt promoted to succeed Kelly from throughout the airline’s govt ranks, as boards sometimes worth business and firm information.

Just some miles away from Southwest’s Dallas headquarters, in Fort Value, Texas, longtime American Airlines CEO Doug Parker, who first took the helm of an airline lower than two weeks earlier than 9/11, is stepping down on the finish of subsequent month, handing the keys over to Robert Isom, the corporate’s president.

Final yr, Southwest’s outgoing CEO, Gary Kelly, recorded a tribute to his DFW-area rival for his retirement known as “Friends in High Places,” a parody of “Mates in Low Locations” for a lifetime achievement award an business group gave Parker.

“Gary is an intense competitor and we have battled in opposition to one another for many years, however he’s additionally a extremely good one that is difficult to not like,” Parker posted on Instagram on Monday.

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