At the Southwest Airlines headquarters near Dallas Love Field, a bright green sign with a bold yellow arrow directs visitors toward the office of CEO Bob Jordan. It reads “Bob’s Meet and Greet,” a warm, inviting phrase that reflects the airline’s traditionally down-to-earth culture.

Southwest’s C.E.O. on Why Now Is the Time for Bag Fees and Assigned Seats

Inside Jordan’s office, shelves are lined with neatly arranged books, family pictures, and souvenirs that span his nearly four decades with the company. Among the keepsakes are miniature aircraft models that serve as reminders of his long journey with Southwest.

The airline, which began flying in 1971, holds onto its roots with pride. The company’s headquarters bears the name of its maverick co-founder, Herb Kelleher. A carefully reconstructed version of Kelleher’s original office stands as a tribute within the building, and his well-known quotes are emblazoned on the walls.

Jordan, now leading the company, is also leaving his imprint—not just through slogans but by steering Southwest through transformative changes. These efforts follow intense pressure from Elliott Investment Management, an activist hedge fund that last year criticized the company for relying on what it called “outdated practices” and even demanded Jordan’s removal as CEO.

Now, under Jordan’s guidance, the airline is adopting significant modifications to its operations. These include the phasing out of its unconventional open-seating boarding method, the launch of higher-tier seating options, and—perhaps most controversially—the reconsideration of its signature “bags fly free” policy. Jordan has framed these changes not as betrayals of Southwest’s values, but as a response to evolving customer preferences.

The airline anticipates these initiatives will generate around $4 billion in additional profit. Since revealing this updated business plan, Southwest’s stock performance has improved, and tensions with Elliott have cooled.

Still, Jordan, who is 64, faces the challenge of reassuring long-time customers. Many feel the company is abandoning the features that once made it distinctive. The airline’s heart-shaped logo—a symbol of its original “love” marketing strategy—along with its stock ticker symbol, LUV, harken back to a time when customer service was at the heart of its identity.

“Change is difficult. It can be emotional,” Jordan reflected during a recent interview in his office. He emphasized that serving the needs of customers, employees, and shareholders doesn’t have to be a zero-sum game.

Handling Customer Discontent

When asked how he copes with feedback from customers upset about the new baggage fees or changes in seating, Jordan was candid.

“We know some people are unhappy,” he admitted. “But many, many are pleased.”

He stressed the importance of clear communication. “Sometimes people don’t fully understand the reasoning. Once they do, a lot of them get on board. We just have to guide everyone through this transition.”

Jordan pointed out that even employees are energized by the changes. For example, in the old open-seating system, flight attendants often had to step in when families couldn’t find seats together. Gate agents had to manage pre-boarding challenges, sometimes leading to confusion when passengers who paid extra for early boarding ended up behind those who pre-boarded for other reasons.

The End of Free Checked Bags

In March, Southwest’s decision to potentially revise its “bags fly free” policy made headlines—especially since just months earlier, Jordan had publicly stated the policy was safe. What changed?

“The pandemic shifted consumer behavior,” he explained. “People want more choices now. And if we ignore those preferences, our product becomes less attractive.”

Southwest’s website now offers a broader range of fare classes, including a new basic fare tier that comes with more restrictions. Customers who want more flexibility can pay slightly more to upgrade. Jordan stressed this is not about nickel-and-diming customers, but about aligning with modern expectations.

Pacing and Philosophy of Change

Could these changes have been rolled out more slowly?

According to Jordan, speed was necessary. While other airlines implemented similar changes over a decade, Southwest is playing catch-up in a matter of months. That may feel abrupt to some, but Jordan says the transition is going smoothly.

Despite concerns that the new strategy favors frequent travelers, he insists Southwest remains committed to price-conscious fliers.

“We’re not turning our backs on anyone,” he said. “You’ll still find great fares with us.”

The company’s core—exceptional people, service, and hospitality—remains unchanged, Jordan emphasized. But he also warned against clinging too tightly to the past.

“If you keep saying no to innovation, eventually you become irrelevant,” he noted.

The Elliott Factor

Was Elliott Investment Management the catalyst for all these changes?

Jordan says no. “We shared our new strategy during our September investor day. The elements—assigned seating, premium legroom, and more—were already in motion long before Elliott got involved.”

While Elliott is a major investor, Jordan described them as just one of many stakeholders.

Leadership Under Pressure

Reflecting on the challenges of 2023, Jordan said the pressure was invigorating rather than discouraging.

“It might sound odd, but I enjoy times like that,” he said. “You learn, adapt, and grow. You solve real problems.”

Some colleagues have remarked that Jordan has become more decisive—what they call “command-and-control”—which he sees as a compliment. It reflects his readiness to act swiftly when the moment demands it.

From the Early Days to Now

Jordan joined Southwest in 1988, when the company had about 7,000 employees. That year’s total revenue is now equivalent to what the airline earns in just five days.

He met Herb Kelleher on his first day and still recalls Kelleher’s legendary quote: “If you don’t change, you die.”

Jordan noted that many of Southwest’s signature features—like open seating or avoiding large airports—were rooted in the idea of being efficient and different, not rigid ideologies. “Herb would say we’d never change boarding or enter LaGuardia. Then we did.”

Current Market Challenges

Turning to broader concerns, Jordan acknowledged the economic headwinds affecting the travel industry. Inflation, global instability, and changing consumer behavior are real challenges.

“We saw a dip in bookings in February, March, and again in April,” he said. “People are more hesitant to spend. Bookings are stable now but at lower levels.”

For example, airfare discounts—especially for summer travel—are more common now, which used to be unthinkable. “People are waiting until the last minute to book,” he observed.

Looking Ahead to Summer Travel

Jordan anticipates this summer’s travel season won’t be as robust as previously expected. “Demand is softer than forecasted six months ago,” he said. “That’s true across the board.”

Personal Background

Jordan grew up in Indiana before moving to Houston for high school. He earned a computer science degree and later an MBA. At one point, he dreamed of becoming an astronaut.

His mother was a homemaker and his father a civil engineer.

Tech and Innovation

As for technology, Southwest is using artificial intelligence to improve operations. For instance, with new baggage policies expected to reduce the number of checked bags, AI tools now help agents predict when overhead bins might fill up—so issues can be addressed at the gate, not in the cabin.

“It’s working really well,” Jordan said.

Lightning Round: Bob’s Travel Habits

Asked about his personal travel preferences, Jordan shared that he avoids jet lag by staying awake upon arrival. He prefers window seats for leisure and aisle seats on business trips so he can interact with staff and even pitch in—serving snacks or helping clean the cabin. He’s known to pop into the cockpit for chats with pilots.

He dresses casually—often in a polo or vest—since he likes helping ground crews, something that’s tricky to do in a suit.

And yes, he checks the company’s stock price every day.

As for his emails? He signs them with the signature that perfectly captures Southwest’s brand legacy:

Luv, Bob.. Daily.

How do you sign off your emails?

Luv, Bob.