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Southwest Airlines names Tom Nealon president, but not ‘heir apparent’

Southwest Airlines’ training facility and headquarters are visible in the background as one of the carrier’s 737s departs from Love Field in Dallas in September.
Southwest Airlines’ training facility and headquarters are visible in the background as one of the carrier’s 737s departs from Love Field in Dallas in September. Star-Telegram archives

Southwest Airlines named a new president on Tuesday in a move that lines up possible successors to Gary Kelly whenever he decides to step down as the airline’s top executive.

Kelly, 61, said he would relinquish the president’s role to Tom Nealon, 55, who is currently the Dallas-based airline’s executive vice president of strategy and innovation.

The carrier also announced that its chief operating officer, Mike Van de Ven, will add customer support and services and hospitality to his operational responsibilities. Greg Wells, who was promoted to executive vice president of daily operations, will report to Van de Ven.

The changes constitute succession planning, though Kelly indicated that he is not planning to step aside any time soon. He has served as Southwest’s CEO since 2004 and assumed the president role in 2008 when Colleen Barrett retired.

Both Nealon and Van de Ven will report directly to Kelly, who said he took the initiative to give Nealon the president’s position which was approved by the board on Tuesday. Nealon was the carrier’s chief information officer from 2002 to 2006 before leaving the company for several years. He served on Southwest’s board from 2010 to 2015, stepping down when he returned as an executive.

Van de Ven, 55, has worked at Southwest for 23 years in finance and operations.

“The board is adamant, as am I, that we don’t have an heir apparent,” Kelly said in a conference call with reporters on Tuesday afternoon. “This is not a desire to set up a horse race by any means.”

Andrew Watterson was promoted to chief revenue officer while Steve Goldberg was promoted to senior vice president of ground operations and provisioning.

The airline’s current vice president of labor relations, Michael Ryan, announced that he will retire in March and Russell McCrady will succeed him in that position. Southwest is currently in contract talks with its mechanics union.

“This is a good time for us to make an organizational change in the sense that things are going very well,” Kelly said. “Southwest is performing exceptionally well with our customers, our operations and financially.”

Southwest reported the news after the close of trading on Wall Street. Shares of Southwest (ticker: LUV) rose 2 percent to close at $51.34 a share on Tuesday, as the carrier boosted its unit revenue estimates for the fourth quarter.

The airline told investors that unit revenues improved during the holiday month and now forecasts fourth-quarter unit revenues will decline 3 to 4 percent instead of the previous estimate of 4 to 5 percent.

Southwest said its passenger traffic grew 4.2 percent in December as the airline increased its capacity by 4.8 percent. Planes were not as full this Christmas for Southwest with the carrier reporting its load factor declined 0.4 percentage points to 82.6 percent.

Andrea Ahles: 817-390-7631, @Sky_Talk

Southwest Airlines' showed off the new Boeing 737 MAX to employees on Friday. (September 23, 2016)