Southwest CEO: The airline's relationship with its employees is 'the most important thing'

In a new interview with Yahoo Finance's Adam Shapiro, Southwest Airlines CEO Gary Kelly describes how the airline's strong relationships with its employees has provided a major competitive advantage for Southwest.

Video Transcript

ADAM SHAPIRO: Sometimes when you look at the path forward, where we've all been impacts where we're going. So let's take a look back, because the Southwest Airlines most of us know is roughly 50, 50-plus years old, even though the airline has its origins back in 1967. And I want to read something I found from an article in 2018, and they said, "the main reason Southwest makes so much money is because people love working there. Unlike much of corporate America, it realizes happy employees will make you money."

You have always said that your greatest achievement has been no layoffs, even just mentioned that. The airline's never been bankrupt. The other carriers have. How important is that relationship for the airline with its employees? Because even today there are occasionally those hiccups.

GARY KELLY: Well, it's the most important thing. It always has been and it always will be. At Southwest Airlines the culture is very, very strong. But you just think about what it takes to create a business-- a good business, a bad business. It takes so many different inputs, and in our particular case as an airline, it's very capital intensive with all the aircraft that we invest in. It's very energy intensive as a transportation company. We buy a lot of jet fuel. It's heavily regulated. Very much subject to economic cycles and it's very people intensive, very labor intensive.

So all of those things have to be managed well to be successful. But ultimately, it's people who do all of those things. And so you very quickly realize it takes a lot of people, it takes a lot of teamwork. It's a customer service business, as well. Our customers are experiencing our product as we're making it. And one of the huge advantages that we've had competitively over 50 years is our customer service, which means our people.

And I didn't invent it. You know, Herb Kelleher said our people come first, they'll take care of our customers, and then everything else takes care of itself in terms of other stakeholders, especially shareholders. And I think what that translates to is, when you get up to bat and times are really tough, do you really put your money where your mouth is. And through 9/11, through wars, through fuel price spikes, through the Great Recession, and now the pandemic, we've never had a layoff, we've never had to furlough, we've never had a pay cut. And yes, I'm very, very proud of that. The 47 years of profitability obviously goes hand in hand.

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