Southwest AirlineÆs CEO: Gary Kelly
The instability of macro-environmental forces and their impact upon the effectiveness and profitability of airlines indicates the need for a multi-dimensional, flexible and responsive management structure able to operate effectively and efficiently manage people, machines, financial, and domestic/international situations (Shaw, 1988:2). The new CEO of Southwest Airlines, Gary Kelly, has made his mark on the airline by encouraging a competitive strategy and expanded operations to further entrench the company as the industry leader (Zellner, 2005). Formerly CFO of the company, he is one of the new CEOs in the industry that have a background and experience in the Finance department. Southwest CEO Kelly sees the industry's deregulation as a poor excuse for the extent of its current problems. "We've been deregulated for 25 or 26 years," he observes, and it's long been clear that "the number-one criteria customers use to select their airline seat is price, so you'd better have your costs under controlö (Harris, 2005). Kelly is a graduate of the University of Texas at El Paso in accounting; he went to work for Arthur Young and Company, who were the accountants for Herb Kelleher and Southwest Airlines. He became familiar with the people and the company through company friends working on the account, and ultimately went to work for the company. He started out as company controller and worked his way up to CFO for the company. He was pivotal in convincing the President, Herb Kelleher, to adopt the level of technology that has helped make Southwest the low cost leader. When the CEO unexpectedly retired, he was the natural choice for the job (Reed, 2004). He started as CEO at a bad time, when high fuel costs and union and labor challenges were threatening the profitability of the company. The purpose of this paper is to discuss how his style has set new directions for strategy, internal relations an...