Southwest Airlines (NYSE: LUV) Chief Executive Officer Gary Kelly announced his impending transition out of the role but will remain with the company as executive chairman.
Kelly is expected to leave the position of CEO in February 2022 formally and is set to be succeeded by Vice President of Corporate Services Robert Jordan. A longtime colleague of Kelly, the outgoing CEO, commented in a press release that Jordan was a "gifted and experienced executive and well prepared to take on this important role."
Jordan's appointment, however, seems to have been a bit of a late decision by Southwest's board, with Jordan himself even remarking that the board had only begun weighing candidates shortly before he was informed of the board's decision, days before the announcement was made.
There was a bit of uncertainty with Southwest's succession plan as CEO Gary Kelly began to drop hints that he was set to retire, with Jordan's appointment coming as a bit of a surprise to industry experts that had been keeping tabs on Southwest. Regardless, however, Jordan's appointment is being well received by experts and those within the company, including the Southwest Airlines Pilots Association.
There are many obstacles left by the coronavirus pandemic and the subsequent recession for Southwest's incoming CEO. While demand is slowly returning for air travel, with vaccine deployment efforts rebuilding consumer confidence, Southwest's existing fleet may not support demand going forward, much less allow the company to expand.
"We don't feel like we have enough airplanes for 2022 and 2023, and that's just doing what you know us to be famous for," Kelly said during an interview with CNBC's Jim Kramer.
Southwest's succession plan doesn't seem to have affected the company's share price, with the firm trending down for most of the week. The airline lost about 1.6% during trading over the week.