Parker Steps Down As Southwest CEO, Kelly Tapped As Successor
In a surprise move, Southwest Airlines today announced the resignation of CEO and vice chairman Jim Parker. Gary Kelly, previously executive vice president and CFO, was named as Parker's replacement. Parker led the prototypical low-fare carrier since mid-2001, keeping alive Southwest's unprecedented streak of profitability--the carrier today reported its 53rd consecutive quarterly profit--and guiding its growth as it became the largest commercial carrier in the domestic system.
"Our entire board salutes Jim for his myriad accomplishments and for being an outstanding individual," said Southwest chairman Herb Kelleher. "We will all greatly miss him." The company said Parker resigned for personal reasons.
Kelly becomes CEO, vice chairman and a member of the board of directors. He first joined Southwest in 1986 as controller.
"Gary Kelly is one of our brightest stars," Kelleher said. "As part of our board's succession planning, we had already focused on Gary as Jim Parker's successor, and that process has simply been accelerated by Jim's personal decision to retire. Under Gary's leadership, Southwest has achieved the strongest balance sheet in the American airline industry, the best fuel hedging position in our industry and tremendous progress in technology."
Southwest treasurer and vice president of finance Laura Wright was named to succeed Kelly as CFO. She has been with Southwest since 1988.
Southwest's second-quarter net profit of $113 million was down more than 50 percent from one year earlier, primarily a result of high fuel costs. Parker, however, appears to be leaving the company in a strong position.
"Thus far, favorable load factors and unit revenue trends have continued in July," he said in this morning's earnings announcement. "Bookings for the remainder of July and August are also strong due to high demand for vacation travel. Bookings for September are building nicely as a result of recent fare sales. Based on our current revenue and cost outlook and barring any unforeseen event, we expect third-quarter 2004 earnings to exceed third-quarter 2003 earnings of $106 million."