Southwest says chairman has prostate cancer

Kelleher has begun radiation treatment


August 12, 1999|By BLOOMBERG NEWS

DALLAS -- Southwest Airlines Co. said yesterday that Chairman and Chief Executive Officer Herb Kelleher has prostate cancer and has begun radiation treatment.

Kelleher, 68, said the cancer was discovered during an annual exam, and he will receive brief treatments weekdays for about two months while he keeps working. His colorful promotions of Southwest, such as shimmying in an Elvis Presley jumpsuit for a magazine cover, have made him a high-profile chief executive.

The diagnosis highlights the lack of a clear successor at an airline whose co-founder and holder of the top three jobs has reached an age when many executives are retired, a key weakness for a company even if the leader is healthy.

"It's likely the board will reconsider" and announce a second-in-command, said Buckingham Research Group analyst Helane Becker.

Kelleher become chairman in 1978 and took the titles of chief executive and president in 1981. While Kelleher said he may experience a loss of energy in the last two weeks of the treatment, he saw no need to announce the executive next in line.

"There is no need to update any succession plan because our board discusses that issue on a regular basis and has done so for a good number of years," Kelleher said. "Insofar as we know, it's not going to involve any disruption or even any interruption in Southwest Airlines. So it doesn't change anything."

The company's stock fell 12.5 cents yesterday to $16.375. While the shares have slipped in the past few weeks partly on concern that rising fuel costs will hurt earnings, Southwest stock has risen 20 percent in the past 12 months.

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