Hot off the presses.

“The Board of Directors of Southwest Airlines today announced details of its new employment contracts with Executive Chairman Herb Kelleher, President and Corporate Secretary Colleen Barrett, and Vice Chairman and CEO Gary Kelly.

    — Herb Kelleher, 76, will continue as Executive Chairman of the Board for

      one year and will step down from that position at the Company’s 2008

      Annual Meeting of Shareholders.  Kelleher is a Founder of Southwest

      Airlines and has served as Executive Chairman since 1978.  From 1981

      through June 2001, Kelleher also served as President and CEO of

      Southwest Airlines.

 

— Colleen Barrett, 62, will continue as President for one year and will

      step down from that position on July 15, 2008.  Barrett has served as

      Secretary of the Corporation since 1978; Vice President Administration

      from 1986 to 1990; Executive Vice President Customers from 1990 to

      2001; and President since 2001.

— Gary Kelly, 52, will remain as CEO with a contract expiration date of

      February 1, 2011.  Kelly began his career at Southwest Airlines as

      Controller in 1986; was named Vice President Finance and CFO in 1989;

      Executive Vice President and CFO in 2001; and CEO and Vice Chairman in

      July 2004.

 

After relinquishing their current management and Board positions in 2008,

Kelleher and Barrett will remain for five years as Employees of the airline

they nurtured from the very beginning, working fulltime at the Company’s

Dallas headquarters.

    “After 41 years as an Officer and Director of Southwest Airlines, I will

be resigning from those positions as of our Shareholders’ meeting in May

2008,” Kelleher said.  “Why?  Because our organizational transition that began

in 2001 will then be complete and because I have unalloyed respect for, and

confidence in, our CEO Gary Kelly and his superb cadre of Southwest Officers.

Southwest’s future is bright — and so are they!

    “The People of Southwest have always been my pride, my joy, and my love.

Their indomitable dedication and esprit de corps have taken Southwest from a

three-airplane dream to a 500-airplane reality.  I am grateful that I will

continue to have the opportunity to work with our People and to bask in their

good humor and excellence for many years to come,” he said.

    Barrett said, “Though I will be resigning as Corporate Secretary and a

Board Member as of our May 2008 Annual Shareholders’ meeting and from my

management position (i.e., President) as of July 15, 2008, I am delighted that

I will still be able to practice/follow my Customer Service passion and

continue the work that I absolutely LUV:  serving the Internal and External

Customers of Southwest Airlines.  Southwest is characterized by the high

spirits of its Employees and its industry leading Customer Satisfaction

record.  The ‘business of business’ is ultimately about People, and I am very

proud of the fact that Southwest’s humanistic focus has served as a luminous

beacon in this respect.

    “I have been very blessed over the last 40 years of my career — blessed to work with — and for-the most caring, most altruistic, and most giving People that anyone has ever been fortunate enough to meet.  Those years have been a true ‘Labor of LUV.’  My heart tells me it is time to allow the next generation of SWA Leaders their day to lead.  I have always thought that one of the best traits of a Leader is to know when to follow.  And, I am looking forward to following the example set by this new Leadership generation and to continuing ‘to live the Southwest Way’ for several more years,” she said.

    Kelly said both Kelleher and Barrett have helped make Southwest Airlines

one of the most studied corporate success stories in the history of American

business.

    “I, along with all of our 33,000 Southwest Employees, will be forever

grateful for Herb’s visionary Leadership and gritty entrepreneurship,” Kelly

said. “Corporate America knows that Colleen is the force behind our cherished

family culture and enviable Customer Service record.”

    “I know every Employee joins me in promising Herb our continued dedication

to the cause he loves — giving Americans the Freedom to Fly and providing job

security and a great place to work for our Employees,” he said.  “I am

grateful to both of them for their friendship, mentorship, and commitment to

the future success of Southwest Airlines.  We are all fortunate to continue to

have them as an important part of our Southwest Family.”

Ticker: (NYSE:LUV)