Southwest Says CEO Is Being Treated for Prostate Cancer

DALLAS — Southwest Airlines Co. disclosed that Chief Executive, President and Chairman Herb Kelleher has prostate cancer and began radiation treatment Wednesday.

Kelleher, 68, said the cancer was discovered during an annual exam, and he will receive brief treatments on weekdays for about two months while he keeps working.

Kelleher’s colorful promotions of the Dallas-based low-fare carrier, 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.

Analysts have speculated about who will succeed Kelleher, whose current contract runs through next year. While he has no publicly declared successor, “the top four or five people at the company are all very able executives who’ve been with the company for a long time and will continue to run the company,” said Helane Becker, an analyst with Buckingham Research Group who has a “buy” rating on Southwest shares.

Kelleher said that while he may experience a loss of energy in the last two weeks of treatment, he sees 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 told reporters in a conference call.

Kelleher’s doctor said the cancer was discovered at a “relatively early and fairly mild stage of development.”

Kelleher’s health and the lack of a declared successor were on the agenda at the company’s annual meeting in May, when shareholder J. Michael Schaefer unsuccessfully proposed stripping Kelleher of one or more of his titles to spread the responsibility of leading the firm.

Schaefer’s proposal said Kelleher’s “longevity is speculative, he being a chain smoker . . . and a frequent flier. Unless nudged by the shareholders to divide his control and responsibility, he simply won’t do it.”

Asked at the meeting if he smoked too much, Kelleher replied, with his trademark humor, “I smoke the appropriate amount,” as a cigarette dangled from his lips.

Southwest shares closed down 13 cents at $16.38 on the New York Stock Exchange.