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Southwest's Kelleher not ready for gold watch just yet

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Herb Kelleher signaled Tuesday that, at age 69, even he is thinking toward the day when he will cede at least one of his three titles at Southwest Airlines Co.

For nearly two decades, Mr. Kelleher has guided the low-fare carrier as its chairman, chief executive and president. While others have prodded for and speculated about a successor, the charismatic industry maverick has long ignored the pressure to name anyone.

But in comments Tuesday, the man who once jokingly claimed to be immortal displayed a psychological shift with his reply to the oft-asked question: When will he share the power?

"It will be sometime between now and 2010, I think," said Mr. Kelleher, who co-founded the Dallas-based airline. "I can assure you that that will be the case."

For the first time, Mr. Kelleher is acknowledging that he sees a day, albeit a distant one, when he no longer wields complete control. He declined to be specific about the duties he would relinquish or the time it would occur. The airline has been working to quell concerns that Southwest would falter without him at the controls, Mr. Kelleher said.

"We have diverted considerable amount of effort to doing that," he said. "I have discovered over a long period of time that you can't entirely eradicate emotional concerns from people's bodies and minds. I would say we've been only partially successful.

"It's kind of like Franklin Delano Roosevelt having four terms. Nobody's ever had four terms before, so everybody in the United States was saying, 'Gee, if Franklin Delano Roosevelt steps down or dies or something, you know, the United States is going to disappear.'

"But that doesn't necessarily portend that there is going to be any serious problems when that person disappears."

Questions about who will eventually succeed Mr. Kelleher have swirled around Southwest. Last year, the airline faced a shareholder proposal that would have forced Mr. Kelleher to give up one or two of his three titles. But because the shareholder didn't show up at the annual meeting, the proposal was not voted on or debated.

Southwest's fun-loving, team-oriented and creative corporate culture is cited as one of the key reasons for its success by industry experts and the airline itself. Mr. Kelleher has played a pivotal role in cultivating this environment, serving first as Southwest's lawyer and later as its corporate strategist, spokesman and employee cheerleader.

The airline remains silent about who will fill Mr. Kelleher's shoes even as it insists that it will be business as usual for the carrier after he is gone. Since 1978, Mr. Kelleher has served as Southwest's chairman, and he has held all three of his current titles since 1982.

Southwest has been profitable every year since 1973, and it enjoys one of the lowest costs in the industry and one of the best customer-service reputations. The airline has never laid off any of its employees, who now number more than 27,000.

"The people here are so experienced with respect to Southwest," Mr. Kelleher said. "They are imbued with the Southwest spirit. They have had, probably on average, a decade and a half to be part of it, to understand what makes it tick, to see it in action and that is the reason I have confidence."

Among the names frequently cited as possible successors: James Wimberly, executive vice president and chief operations officer; James Parker, vice president and general counsel; Gary Kelly, vice president of finance and chief financial officer; and Ron Ricks, vice president of governmental affairs.

Mr. Kelleher's current five-year employment contract with Southwest expires at the end of this year. But he says he never pays much attention to his contract, which he considers a formality.

"I haven't even discussed it," he said. "Matter of fact, haven't even thought about it until this minute."

Last year, doctors diagnosed prostate cancer in Mr. Kelleher. He continued working while undergoing eight weeks of radiation treatment at M.D. Anderson Cancer Center in Houston last fall. He now goes for regular checkups every three months.

"The results thus far are splendid - everything that the doctors had hoped for," he said.

But don't expect this corporate icon to change his chain-smoking, Wild Turkey-drinking ways. Prostate cancer hasn't slowed him down nor has it changed his outlook on life, he said.

"I'm sorry," he joked. "I know it's supposed to."
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