In what is probably a dramatic understatement, Southwest has faced a great deal of change over the last couple of years. I don’t need to rehash all the gory details, but this is an airline that has felt like it has been in transition since Gary Kelly stepped down as CEO in 2022 and Bob Jordan took over. Bob has always felt like a caretaker meant to transition from the old guard to the new, but now, the airline has quietly blown up any sense that there is an actual transition plan. I find the timing of all this quite odd.
This cryptic statement full of nonsensical corporate speak was published on Southwest’s SWAmedia website late last week, but it wasn’t widely distributed. In it, Southwest said three things would change in the airline’s upper ranks:
- Andrew Watterson, Chief Operating Officer who has also been in charge of the airline’s commercial functions again since 2024, will now just be in charge of the operation as COO
- Justin Jones, EVP Operations who was reporting to Andrew, is now being moved to the other side of the house as Chief Commercial Officer and will report directly to Bob
- Tony Roach, Chief Customer and Brand Officer who was reporting to Andrew, is now being given the HR (“People”) department in addition to his current roles and will report directly to Bob
The stated rationale for these changes makes no sense at all. This is the top-line quote from Bob:
These changes position us to move forward with greater clarity, stronger execution, and deeper connection across our Company
Except that the changes muddle clarity and create less connection across the company.
See, before this, Andrew was in charge of the operational and commercial groups. They made a point of connecting the dots very closely between the two sides after having so many operational failures leading up to the biggest failure of them all, Winter Storm Elliott.
Just before the storm hit, the airline had turned over control of the operation to Andrew when Mike Van de Ven was pushed out, and the storm was quite a goodbye gift from Mike. It showed the vulnerability of an operation that hadn’t kept up with the times or with Southwest’s growth. There was a lot of work to do.
One of the early changes before the entire commercial team moved back over to Andrew was uniting the network team and the operation under former network boss Adam Decaire. He was named SVP Network Planning and Network Operation Control, cementing the link between the schedule and the operation to make things run more smoothly. And you know what? It worked. Southwest’s operation has been dramatically improving since that time.
The airline’s revenue performance has skyrocketed as well. In its presentation at the JP Morgan Industrials conference in March, Southwest said its revenue initiatives had been so successful that its 2026 forecast was for an increase in contribution of those initiatives from $2.6 billion to $4.3 billion. Let’s not forget that these were massive initiatives ranging from basic economy to assigned seating, extra legroom, and bag fees. All were done on-time and have overdelivered.
On top of all this, Southwest was one of the clear winners in Q1 2026, as I wrote less than a month ago. And its Q2 guidance says unit revenue performance will be up 16.5 to 18.5 percent vs the year before. With things going well on all fronts, the airline’s shares started moving up in December 2025 for the first time in three years, and the share price is now about 20 percent above where it was at this time last year. It would be higher — and in fact, it was higher — if not for the Iran War-induced high fuel prices.
The signs remained positive even as recently as a week ago when Bob spoke at the Bernstein conference. He said that demand trends continue to see no sign of weakening, and “I’m becoming increasingly bullish that we will be able to cover these fuel increases with revenue increases.” That means revenue performance is likely even better than guidance, if I’m reading the tea leaves right. It sounds like sunshine and rainbows.
But in recent weeks, Bob has been dismantling the organization that got Southwest to this point. Adam Decaire, the man who united operations and network to help produce these results, has quietly “retired” from the company. I’ve heard that he wasn’t the only one. Now we have a further dismantling of Andrew’s team and reduction of his responsibilities.
Before activist investor Elliott showed up, Andrew looked to be on track to succeed Bob as CEO. But then, the board turned over and things became murky. Southwest brought in CFO Tom Doxey who was largely seen as a potential successor as well. But in this announcement, it looks like neither will be getting that job.
This is not to say that Justin and Tony don’t deserve promotions, though it is a headscratcher to see Justin taken away from the operation he has done such a great job with and thrust into the commercial side.
The natural progression should be for someone to rise into the President role as Bob thinks about his future retirement. Andrew was already largely doing that role before, so if they had confidence in him, he would have been given the title while Tony and Justin continued to grow their responsibilities and titles and report to him. That didn’t happen. And if Tom was ready to step into that role, you’d think he would have been given more responsibility, but his name was nowhere to be found in this reorg anywhere. Instead, Bob has just given himself more power and broken up the group that had already been doing such solid work.
I say Bob gave himself more power, but it likely isn’t just coming from him. Choosing his successor isn’t directly his job anyway. That’s the board’s job. So it’s safe to assume they had a hand in this plan in some way. The question is… how much of a hand did they have?
Remember, the two most active airline management board members that came in from Elliott have already stepped down — Gregg Saretsky and David Cush — and it’s likely someone with airline experience that would be guiding Bob, if anyone is doing it. In fact, there are now only two board members who have airline management experience both added just before Elliott. That’s Bob Fornaro and the notoriously-difficult Rakesh Gangwal. If I had to pick between those two, my money would be on Rakesh trying to tinker and mess things up. But maybe I’m wrong. Maybe Bob is spearheading this on his own. Either way, it seems very short-sighted.
We now have an airline firing on all cylinders, finally done with its big transition work… but there isn’t stable management to guide what’s next. How strange.
