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Southwest CEO Bob Jordan Faces a Giant Crisis, 10 Months Into the Job


The query that may loom over the corporate for a very long time is why Southwest’s system broke down while those of other large airlines held up relatively well. Analysts say Southwest’s point-to-point network, which is kind of different from the hub-and-spoke system utilized by its peers, made it harder to restart operations.

But in addition they say Southwest’s technology, despite yearslong efforts to modernize it, was lacking. And Mr. Jordan is more likely to be asked why he didn’t do more to make the systems strong enough to take care of weather and technology disruptions, which have dogged Southwest in recent times, including two mass flight cancellations and delays last yr.

Though Mr. Jordan has been chief executive for a short while, he has long been a member of Southwest’s senior leadership team, which might have given him loads of opportunity to grasp the corporate’s strengths and weaknesses. He began at the corporate as a pc programmer, helped develop its frequent flier program and aided in incorporating the planes and crews of AirTran Airways after Southwest acquired that company.

Robert W. Mann Jr., a former airline executive who now runs the consulting firm R.W. Mann & Company, said Mr. Jordan was “in the recent seat straight away.”

But analysts were skeptical that Southwest could change quickly. They are saying the corporate’s management suffers from “Southwest exceptionalism,” or a stubborn belief that its unique approach to running an airline is best. Despite the fact that Southwest has its origins as an upstart taking over sleepy incumbents, analysts say its decision making can move at glacial speeds.

“The airline has at all times been very cautious about change,” Mr. Engel said.

Southwest’s approach works well much of the time, and it has contributed to the corporate’s strong financial performance over the past five many years, analysts say. It allowed, as an illustration, for planes for use more quickly for his or her next flight. Longtime shareholders have done well. Southwest’s stock is up 217 percent over the past decade, outpacing the broader stock market and its best-performing rivals. But this month, Southwest’s stock, down by nearly a fifth, has performed worse than the market and its peers.

There isn’t a evidence that Mr. Jordan is vulnerable. But poor crisis management has severely weakened other airline executives.

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