CEO Gary Kelly: Southwest Airlines will be good corporate citizen

By Maria Saporta
Friday, May 6, 2011

Officially, AirTran Airways’ headquarters is in Orlando, Fla.

But in practice, the airline has treated Atlanta as its hometown. Atlanta has been the airline’s largest hub and home to many of its top executives — and, as a result, AirTran has invested millions of dollars in the community in terms of cash, free tickets and community service.

So it wasn’t coincidental that when Southwest Airlines Co. wanted to celebrate the closing of its deal with AirTran on Tuesday, May 2, its executives flew from their hometown of Dallas into Atlanta on a specially painted aircraft.

The plane pulled into AirTran’s maintenance hangar at Hartsfield-Jackson Atlanta International Airport welcomed with a water cannon salute (courtesy of the Atlanta Fire Department), colorful confetti and hundreds of AirTran employees cheering and waving yellow inflatable rods.

Bob Fornaro, who transitioned from being AirTran’s CEO to a Southwest adviser on that day, said there was “no better place to celebrate our partnership” than at AirTran’s largest base and at the world’s busiest airport.

But underneath all the celebratory fanfare, another transition is under way.
Atlanta is going from being AirTran’s most important city to being one of many served by Southwest. And there is no question that Dallas is and always will be Southwest’s hometown.

That said, Southwest wants to make sure it is well-received in the Atlanta community.

“Atlanta is important,” said Gary Kelly, Southwest’s CEO, in an impromptu interview after the celebration. “AirTran has done a phenomenal job in supporting the community, and we will continue that. We will honor the commitments that they have made.”

But Kelly quickly added that “some things are going to change as time goes by.” Southwest will have to analyze AirTran’s civic ties to see what “makes sense for Southwest going forward,” he said.
As much as Southwest wants to be a good corporate citizen in Atlanta, Kelly said, “It’s not a blanket commitment that nothing will change — that would be disingenuous. It’s premature to say that without a doubt.”

Kelly explained that post-merger, Southwest will increase the number of cities it serves from about 70 to more than 100. Although he did not verbalize the next thought, it was clear that Atlanta will no longer enjoy its premier position that it has enjoyed with AirTran.

Consider this: Debra Benton, Southwest’s director of community relations and charitable giving, said the Dallas-based airline donated $11.3 million in cash and in-kind donations (plane tickets) 2010 throughout its system.

“Southwest has a really long tradition of being involved in the communities where we serve,” Benton said. “The relationships that AirTran has will continue through the end of the year.”

In the next several weeks, Benton said, Southwest will study the ties AirTran has had in Atlanta to see which ones will continue beyond 2011. Benton said she also will meet with the Georgia Center for Nonprofits to better understand Atlanta’s civic landscape.

“We recognize there are people who are feeling rather nervous, and we are trying to get them answers as quickly as we can,” Benton said.

Although it’s not an exact comparison, AirTran contributed about $1 million in cash in the Atlanta community in 2010 as well as thousands of airline tickets, according to Tad Hutcheson, AirTran’s vice president of marketing and sales.
Benton said she does not know if Southwest will be able to match AirTran’s contributions in the Atlanta community.

“It’s a new city,” she said. “I don’t know their level so I don’t know if I’m matching that level.”

Hutcheson has been the AirTran’s face in the Atlanta community, but it is not yet known what long-term role he will have with Southwest, if any. But Hutcheson said he believes he will stay on board for the near term to help make sure there’s a smooth integration of both airlines.

“AirTran is blessed with a lot of leadership talent,” Kelly said when asked about Hutcheson. “We don’t have any executive-level openings at this point for Southwest. We want to be fair to their current leaders, and we can’t promise them executive-level commitments. We haven’t made any firm decisions. Things change; people change.”

That said, Kelly added that Southwest “will need to have a major presence” in Atlanta. “Exactly how that will evolve has yet to be decided,” he said.

Another issue that hasn’t yet been decided is whether Southwest will have directors from Atlanta or AirTran on its board. AirTran has had strong Atlanta representation among its directors, including several who date back to the days of ValuJet.

Post-merger, Kelly said it is possible that the airline will increase its community giving nationally.

“I’m very confident [that] as the company grows, I think our ability to increase our giving also will grow,” he said.

While Hutcheson has had tremendous latitude in making charitable and marketing investments for AirTran, Southwest has a different process.

Benton said that in each of the cities where the discount carrier flies, there is a community giving board of Southwest employees. They are given an annual budget, and they decide how to spend the money.

For Southwest’s larger partnerships, decisions are made at the Dallas headquarters, Benton said.

Southwest has focused its giving on the environment, family issues, serious illnesses, youth leadership and disaster-preparedness.

“We know we will be very generous because we always are,” Benton said. “We know Atlanta is very important to us, and we look forward to serving it not only with flights, but from a community involvement and donation perspective as well.”

AirTran’s Fornaro put it this way:

“I think Southwest will continue to play a very important role in Atlanta,” he said. “I think you are going to see a very strong Southwest footprint in the city. They fully intend to be a great partner in Atlanta.”