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Gary C. Kelly

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Gary Kelly
Born
Gary Clayton Kelly

(1955-03-12) March 12, 1955 (age 69)
San Antonio, Texas, U.S.
EducationUniversity of Texas, Austin (BBA)
OccupationBusiness executive
TitleChairman, Southwest Airlines
Term2008–present

Gary Clayton Kelly (born March 12, 1955) is an American business executive. He is the former chairman and former chief executive officer of Southwest Airlines.

Education

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Kelly studied accounting at the University of Texas at Austin.[1]

Career

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Prior to his work at Southwest, Kelly worked as an audit manager for Arthur Young & Co. and a controller for Sterling Software.[2]

Kelly first joined Southwest Airlines in 1986 as a controller. In 1989, Kelly was promoted to chief financial officer and vice president of finance.[3] In 2001, he was promoted to Executive Vice President. Kelly spent 3 years in this role until he was promoted to become Southwest's fifth CEO and vice chairman in 2004[4] replacing James Parker who succeeded Herb Kelleher in 2001.

Kelly was named chairman of the board of directors of Southwest Airlines on May 21, 2008, replacing co-founder Herb Kelleher.[5] Gary Kelly also became president of Southwest Airlines the same year, replacing Colleen Barrett when her contract expired on July 15, 2008.[6]

Gary Kelly and Bob Fornaro during AirTran acquisition

As CEO, Kelly has guided the airline to become the largest carrier of domestic passengers in the United States.[7][8] He has led the company through a number of transformative, large-scale initiatives including the revamp of the airline’s Rapid Rewards program,[9] the introduction of the Boeing 737–800[10] and 737 MAX[11] aircraft to Southwest’s fleet, the acquisition of AirTran Airways,[12] the launching of Southwest's first international service,[8][12] an update to the airline’s branding,[13] the adoption of the Amadeus reservation system,[14] and large expansion projects at the company’s corporate headquarters in Dallas.[15]

On January 10, 2017, Kelly announced changes to the company's executive leadership ranks with Thomas M. Nealon named as president and Michael G. Van de Ven named as the airline's chief operating officer. These changes were effective immediately. Kelly retained the title of chairman and chief executive officer.[16]

After agreeing to take a salary cut to prevent employee furloughs, his base salary reduced to zero until the end of 2021.[17] After Congress passed additional Payroll Support Program (PSP) measures, the SWA BoD retroactively reinstated Gary Kelly's full salary.

On 23 June 2021, Kelly announced he would relinquish his role as CEO in February 2022, with Bob Jordan announced to take his place at that time. Kelly said he would remain as executive chairman of the board until at least 2026.[18]

On December 15, 2021, Kelly testified against mask mandates on airplanes at a Senate Committee on Commerce, Science, and Transportation hearing while sitting unmasked next to other unmasked senior airline executives opposed to mask mandates; two days later he tested positive for COVID-19.[19]

In late December 2022, the airline experienced a catastrophic holiday meltdown with severe delays and thousands of flight cancellations through the Christmas holiday.[20][21][22] The US Department of Transportation (USDOT) launched an investigation, and in December 2023, the airline reached a settlement and received a record-setting $140 million fine from the USDOT and reported losses exceeding $1.1 billion stemming from the crisis.[20][21][22][23][24] A major cause of the crisis was the inability of Southwest's crew scheduling system to cope with disruptions from a major winter storm affecting Chicago and Denver.[21][23] The Southwest Airline Pilots Association, the union representing Southwest pilots, had warned publicly for months that the unreliability of the crew scheduling system would cause mass cancellations and that management was neglecting the problem.[25][26] The union blamed the crisis on Kelly's leadership, saying that he had fostered a corporate culture in which senior executives made decisions in isolation, and contrasting this with what it described as Southwest's history of "ground-up decision-making". Union president Tom Nekouei said, "This is not a Southwest Airlines problem. This is not an employees of Southwest Airlines problem. This is not an unprecedented weather problem. This is a Gary Kelly problem."[25]

In June 2024, Elliott Investment Management, an activist investment fund, announced that it had taken a $1.9 billion position in Southwest and would seek to oust leadership at the carrier, arguing it had "failed to evolve" citing "leadership’s stubborn unwillingness to evolve the Company’s strategy."[27] The purchase amounted to over 10% of common stock in Southwest, entitling Elliott to call a special meeting of shareholders if Southwest would not agree to its demands.[28][29] Elliott demanded that Kelly and Jordan step down, blaming the pair for the sharp decrease in the value of Southwest stock over the preceding years.[29]

On September 10, the day after the Southwest board of directors met with Elliott, Kelly said in a letter to shareholders that he would not seek reelection as executive chairman at the spring 2025 annual shareholder meeting. Jordan was expected to remain as CEO after receiving unanimous support from the board.[29][30]

Awards and recognition

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Kelly was named one of the best CEOs in America for 2008, 2009 and 2010 by Institutional Investor magazine and serves on the President's Council of Jobs and Competitiveness.[31]

In 2014, Kelly received the Advertising Innovation and Marketing Excellence (AIME) Award.[7]

Kelly was the 2016 recipient of the Tony Jannus Award for distinguished achievement in commercial air transportation.[32]

In 2017, Fortune named Kelly the #3 most underrated CEO in America (after Satya Nadella and Jeff Bezos) based on a survey of Fortune 500 CEOs asking them which of their fellow CEOs do not get enough credit. Kelly received 85 votes.[33]

On February 18, 2020, Gary Kelly was named as the recipient of the 2020 Philanthropic Leadership Award from The Ireland Funds.[34]

On October 25, 2021, Gary Kelly was the recipient of the 2021 Lifetime Achievement Award from 3BL Media.[35]

Personal life

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Kelly was born in San Antonio on March 12, 1955.[36] Kelly received a Bachelor of Business Administration in Accounting from the University of Texas at Austin. He is a Certified Public Accountant.[2]

Kelly first met his wife Carol in eighth grade. They married in 1976. Together, they have two daughters.[36]

References

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  1. ^ "Gary C Kelly, Executive Chair of Southwest Airlines". The CEO Magazine. Retrieved 2024-02-01.
  2. ^ a b "Biography: Gary C. Kelly". CEO Exchange. June 5, 2007.
  3. ^ "Southwest Airlines' CEO Gary C. Kelly Sets the Carrier's New Course". D Magazine. Retrieved 2019-10-03.
  4. ^ "CEO of the Year (Again!): Gary Kelly of Southwest Airlines". D Magazine. Retrieved 2019-10-03.
  5. ^ "Gary Kelly". whitehouse.gov. Retrieved 2019-10-03 – via National Archives.
  6. ^ ATW Plus (21 May 2008). "Southwest, AirTran CEOs become chairmen". Air Transport World. Retrieved 4 January 2019.
  7. ^ a b "Southwest Airlines racks up another award thanks to CEO Gary Kelly". Dallas Culturemap. July 12, 2014.
  8. ^ a b "Southwest CEO sees BWI as international gateway". The Baltimore Sun. February 20, 2015.
  9. ^ "Rapid Rewards revamp is just one of Southwest Airlines' big changes". Los Angeles Times. February 26, 2011.
  10. ^ "Southwest to buy larger jets". The Spokesman-Review. December 16, 2010.
  11. ^ "Southwest receives first delivery of Boeing 737 MAX". Yahoo! Finance. August 30, 2017.
  12. ^ a b "Southwest Airlines Acquires AirTran". Seattle Post-Intelligencer. September 27, 2010.
  13. ^ "Now middle-aged, Southwest Airlines will change the paint job on it airplanes". The Blade. September 8, 2014.
  14. ^ "Southwest Airlines turns on new reservations system". Fort Worth Star-Telegram. May 9, 2017.
  15. ^ "See Southwest Airlines' new $250 million addition to fast-growing Love Field campus". Dallas News. April 3, 2018.
  16. ^ "Southwest Airlines Announces Executive Promotions". Southwest Airlines Newsroom. Retrieved 2018-05-02.
  17. ^ "Southwest CEO says it can avoid layoffs through 2021 with employee pay cuts". CNBC. 5 October 2020. Retrieved 9 November 2020.
  18. ^ Arnold, Kyle; Halkias, Maria (23 June 2021). "Southwest Airlines' Gary Kelly stepping down as CEO next year, exec Robert Jordan will take over". The Dallas Morning News. Retrieved 23 June 2021.
  19. ^ Laris, Michael (2021-12-17). "Southwest Airlines CEO Gary Kelly tests positive for coronavirus after Senate hearing". The Washington Post. Retrieved 2021-12-20.
  20. ^ a b Shepardson, David (December 18, 2023). "Southwest Airlines agrees to $140 million penalty over 2022 holiday meltdown". Reuters. Retrieved January 5, 2024.
  21. ^ a b c Walker, Mark; Chokshi, Niraj (December 18, 2023). "U.S. Fines Southwest Airlines $140 Million for Holiday Meltdown". The New York Times. New York City. Retrieved January 5, 2024.
  22. ^ a b Yousif, Nadine (December 18, 2023). "Southwest Airlines fined $140m for holiday meltdown". BBC. Retrieved January 5, 2024.
  23. ^ a b "Southwest Airlines reaches $140 million settlement for December 2022 flight-canceling meltdown". AP News. December 18, 2023. Retrieved December 18, 2023.
  24. ^ "Southwest fined $140 million over 2022 holiday flight disruptions". NBC News. December 18, 2023. Retrieved December 18, 2023.
  25. ^ a b Blanchet, Ben (January 5, 2023). "Southwest Pilots Union Blames Former CEO For Holiday Meltdown". huffpost.com. HuffPost. Retrieved September 11, 2024. Southwest Airlines' pilots union blamed the company's holiday meltdown on former CEO Gary Kelly, who he said ruined Southwest's culture of ground-up decision-making with "a headquarters-centric cult" of executives... "This is not a Southwest Airlines problem," Nekouei declared. "This is not an employees of Southwest Airlines problem. This is not an unprecedented weather problem. This is a Gary Kelly problem."
  26. ^ Arnold, Kyle (June 21, 2022). "Southwest Airlines pilots at Dallas Love Field: 'Our passengers and pilots deserve better'". The Dallas Morning News. Dallas, Texas. Retrieved January 2, 2023.
  27. ^ "An investment firm has taken a $1.9 billion stake in Southwest Airlines and wants to oust the CEO". AP News. 2024-06-10. Retrieved 2024-09-04.
  28. ^ Maharishi, Meghna (2024-09-03). "Elliott Owns Enough Southwest Shares to Call for a Special Meeting". Skift. Retrieved 2024-09-04.
  29. ^ a b c Choksi, Niraj; Hirsch, Lauren (September 10, 2024). "Southwest Airlines Agrees To Board Changes After Pressure From Elliott". Retrieved September 11, 2024.
  30. ^ Skores, Alexandra (September 10, 2024). "Southwest Airlines caves to activist investor pressure, shakes up board". The Dallas Morning News. Dallas, Texas. Retrieved September 10, 2024.
  31. ^ "Gary Kelly". whitehouse.gov. Archived from the original on 2017-01-22. Retrieved 2014-12-20 – via National Archives.
  32. ^ "Southwest Airlines CEO Gary Kelly named Tony Jannus Award winner". Tampa Bay Times. May 20, 2016.
  33. ^ "These Are the Most Over and Underrated CEOs". Fortune. February 16, 2017.
  34. ^ "Southwest CEO Receives 2020 Philanthropic Leadership Award". Focus Daily News. 18 February 2020. Retrieved 3 January 2023.
  35. ^ "Congratulations to 3BL Media's 2021 Responsible CEO of the Year Honorees!". 3BL Media. 2021-10-25. Retrieved 2020-10-26.
  36. ^ a b "Southwest Airlines CEO is defining himself as a leader — without bag fees". Dallas News. April 19, 2010.
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