Southwest replaces Chairman Rakesh Gangwal after less than one year in job

By Mary Schlangenstein

 

Southwest Airlines Co. said Rakesh Gangwal is resigning as chairman, a little over a year after joining the board and serving in his current role for just eight months. 

 

Doug Brooks, a Southwest board member for more than 15 years, has been tapped for the chairman job. The move comes after an activist investor placed six new members on the airline’s board in October, and Gangwal’s elevation to chair a month later. His exit from that position, which is effective Friday, is due to time commitments unrelated to Southwest, the Dallas-based carrier said in a statement Thursday. 

 

Brooks previously was chairman, president and chief executive of Brinker International Inc., a global chain of restaurants. 

 

Gangwal will lead a new fleet oversight committee at Southwest and remain on the finance, nominating and corporate governance committees, the carrier said. The 72-year-old executive had taken the chairman post while Southwest scurried to add more outside experience and independence to its board just as Elliott Investment Management was ratcheting up pressure to oust the airline’s top executives. 

 

Elliott argued that senior management and the board had let Southwest slip hopelessly behind competitors, ignored large-scale revenue opportunities and lacked the ability to turn the company around. It succeeded in pushing out then-chairman Gary Kelly and Southwest subsequently adopted sweeping changes to its business model, adding premium options, including more leg room, charging for checked bags and offering seat assignments. 

 

“We remain confident in Southwest’s trajectory and we look forward to continuing our constructive engagement as the company executes its plan to drive long-term value,” Elliott, which owns more than 10% of the airline, said Thursday in an emailed statement.

 

Gangwal is best known for co-founding InterGlobe Aviation, which is credited with generating the bulk of his wealth. He also helmed US Airways from 1996 to 2001, and spent a decade at United Airlines Inc. starting in 1984. He was chairman, president and chief executive officer at Worldspan Technologies Inc. from 2003 to 2007.

 

Southwest is creating the fleet-related committee to oversee the company’s aircraft acquisition strategy, the airline said.