Kelleher leaving Southwest nest: Airline founder, 76, to step down as chief; president following suit

Jul. 20--Herb Kelleher, the charismatic leader who provided the public face of Southwest Airlines for more than two decades, will step down as chairman of the Dallas airline next May, 41 years after he helped found the company. Leaving with Mr...


Jul. 20--Herb Kelleher, the charismatic leader who provided the public face of Southwest Airlines for more than two decades, will step down as chairman of the Dallas airline next May, 41 years after he helped found the company.

Leaving with Mr. Kelleher is his longtime associate, Colleen Barrett, who started out as his legal secretary and worked her way up to president of one of the nation's largest airlines. Ms. Barrett will leave Southwest's board as well in May and relinquish her president's job in July 2008.

The changes, announced Thursday, come as chief executive Gary Kelly and his management team are trying to remake the low-fare pioneer to attract more revenue without losing its low-fare focus.

Mr. Kelleher, 76, said his decision was made easier by his complete confidence in the remaining management team, but his and Ms. Barrett's departures will mark an unavoidably symbolic break with the past for the company.

For decades, the image of Southwest and Mr. Kelleher were inseparable. He became known as the airline executive who dressed up as Elvis for magazine covers, jumped out of overhead bins, rode a motorcycle given him by his pilots, and donned leprechaun outfits and Easter bunny suits.

Many stories about Mr. Kelleher were told, and most of them were true. A group of pilots really did "borrow" his luxury car while he was in a restaurant and had glow tubes installed on the car's underside. He never gave up smoking, even after a bout with prostate cancer, and retains a legendary fondness for Wild Turkey whiskey.

Asked Thursday about his legacy, Mr. Kelleher suggested that it would be that "I consumed more Wild Turkey and cigarettes than anyone in the history of the industry. That would be my guess."

Not completely gone

In its announcement, the carrier said Mr. Kelleher and Ms. Barrett would remain full-time employees at Southwest's Dallas headquarters for five years after they leave their current positions.

Southwest also said its board gave CEO Kelly a new contract that goes to Feb. 1, 2011.

The carrier did not name replacements for Mr. Kelleher and Ms. Barrett, although Mr. Kelly probably would take over one or both of those jobs after the pair's departure from management.

"It was a very easy thing to do for us," Mr. Kelleher said, "because we have such confidence in Gary and the other leadership of Southwest Airlines. And maybe we do need a little relaxation after 40 years."

Mr. Kelleher was part of Southwest Airlines from its beginning, serving as attorney to San Antonio businessman Rollin King as the two men developed the idea of a Texas airline connecting San Antonio, Dallas and Houston.

After Braniff and other carriers fought Southwest's application to fly inside Texas, Mr. Kelleher headed the legal battle that finally resulted in the tiny airline's launch on June 18, 1971, with just three airplanes.

He has remained on the airline's board since 1967, except for an eight-month period in 1975-76 when he resigned as a director before being re-elected.

After CEO Lamar Muse was pushed out in March 1978 in a boardroom battle with Mr. King, Mr. Kelleher was named chairman, and the airline brought in Howard Putnam from United Airlines as CEO and president.

But Mr. Putnam jumped to Braniff three years later, and Mr. Kelleher picked up the two other titles as well -- temporarily in September 1981, and then permanently in February 1982.

Under his guidance, Southwest grew from a scrappy intrastate carrier into a national leader that caused no end of grief to older, bigger carriers that lacked the lower costs and managerial agility to compete effectively with Southwest.

The airline, which had only 13 airplanes and flew only to Texas cities when Mr. Kelleher became chairman, now has 500 airplanes and flies to 63 cities in 32 states. It has more than 33,000 employees and annual revenue of more than $9 billion. It has made money every year since 1973; its last quarterly loss was more than 16 years ago.

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