Southwest CEO on why now is time for bag fees, assigned seats

It says “Bob's Meet and Greet,’ a folksy way to invite visitors to chat with the company’s chief executive.

- JORDYN HOLMAN

Behind his desk are carefully ordered books, family photos and memorabilia, like model planes acquired over his 37 years at the airline.

Southwest, which first took flight in 1971, embraces its heritage. The headquarters are named after the airline’s iconoclastic co-founder, Herb Kelleher. There is a preserved replica of his office in the building. His quotes are painted on the wall.

So are some of Mr Jordan's. He is leaving his mark on the company in other ways, too, overseeing major changes to the way Southwest operates. The moves come after a battle with Elliott Investment Management, a hedge fund that called last year for Mr Jordan's ouster and criticised the airline for adhering to “antiquated business practices from decades ago.”

The changes include getting rid of Southwest's quirky free-for-all boarding process, introducing premium-priced seats and, most controversially, ending its generous free bag policy for all fliers. When pressed on the timing and thinking behind the changes, Mr Jordan described them as offering customers more choices.

Southwest expects to make roughly $4 billion in additional profit as a result. Its shares are up since it unveiled the new strategy, which settled the fight with Elliott.

But now, Mr Jordan, 64, is trying to convince disgruntled customers that the airline is on the right path. Many say they feel it is ditching policies that has long set it apart from competitors. The heart in the company’s logo is a nod to the “love”-themed marketing in the airline’s earliest days, a legacy of Mr Kelleher's obsession with customer service, which also lives on in its stock ticker: LUV.

“Change is hard, and change is emotional,’ Mr Jordan said in a recent interview in his office. The needs of customers, employees and investors “don’t have to be at odds,’ he added.

This interview has been edited and condensed for clarity.