Southwest CEO Gary Kelly Responds to TTAG

TTAG reader SIGCDR took Southwest’s No. 1 to task recently for his characterization of guns (well, gun taxes, to be more specific) in an article written for the airline’s back-of-the-seat time-waster. Kelly, like anyone responsible for maximizing shareholder value, opposes whatever increases his operation’s costs and thus, his product’s demand. So while pumping a national airline industrial policy (which he hopes would lead to reducing – or at least not raising – “punitive” ticket taxes and improving the air traffic control system), he lumped the excise tax charged on firearms into the same class as those levied on booze and smokes, calling them “sin taxes.” Mr. Kelly apparently felt the sting of SIGC’DRs  rapier keyboard strokes and has responded via someone in Southwest’s communication shop. We reprint his email in its entirety after the jump . . .

Mr. Farago,
I work in the Communication Department at Southwest Airlines, and our CEO Gary Kelly asked me to respond to you on his behalf regarding your recent blog post that included an excerpt from one of his recent columns featured in our onboard magazine, Spirit. The primary focus of the column was on his support for an Airline Industry Policy, as well as his new role as Chairman of the A4A Board.

Any misrepresentation contained in the column was unfortunate and certainly unintentional. I wanted to extend our apologies to anyone who may have been offended by the word choice.

Please don’t hesitate to reach out to me directly if needed.

Have a great day,

Todd

33 Responses to Southwest CEO Gary Kelly Responds to TTAG

  1. avatarJTPhilly says:

    That’s actually a good response, all things considered. He didn’t mean to jump into the firearms fray, and just wants out. I wouldn’t boycott Southwest or anything. There’s plenty of other reasons to be angry at airlines (where else would you pay that kind of money to be treated like herded cattle?).

    • avatarMax says:

      Well you can blame the majority of what’s painfully annoying about air travel on the TSA. Sure, the airlines charge high prices, but I’d like to see how much of their money goes into paying fees and whatnot to our great and mighty gubment.

      My first response is usually “how deep have politicians got their rotten little fingers in our lives?” instead of blaming businesses.

  2. avatarPete says:

    That is what we call backpedaling which shows people are thinking twice about messing with people who support the 2A.

    • avatarDaniel Silverman says:

      LOL you live and you learn. I actually like flying South West.
      But yeah he kicked a hornets nest with that one.

  3. avatarChas says:

    I’m so sick and tired of the “reach out to” corporate speak. Makes me want to vomit.

  4. avatarChach says:

    That’s a stand up thing to do.

  5. A good but extremely vague response. He didn’t specify what he was apologizing for. He was too afraid of having a pro gun sound bite.

  6. avatarKole says:

    I’d be mad at his back paddling if he made his comment as a private citizen but as a CEO of a major business I understand and more importantly – he understands to keep his feelings and opinions in check. His obligations to the company must supersede his personal feelings on 2A. Too bad there are many others that choose to do it differently and that leads to the greater polarization…

  7. avataranonymous says:

    The original “offending” passage was

    You might be surprised to learn that taxes and fees amount to about 20 percent of a typical $300 round-trip domestic ticket. That’s higher than taxes on products like alcohol, tobacco, and firearms—so-called “sin taxes” that are designed to discourage use.

    Gary Kelly has nothing to apologize for.

    While it may have been technically wrong to label excise taxes as a “sin tax”, it was not in any way a malicious attack on gun owners or gun ownership.

    I think that gun rights activists are so used to looking for the slightest thing to get offended about, in order to feed their addiction to self-righteous indignation, that they are too willing to get their panties in a bunch simply because they enjoy it.

    Let’s focuse our attention and efforts on our real enemies. There are enough of them out there that we don’t have to invent more.

    PS: The more I think about it, the more I believe that Robert Farago owes Gary Kelly an apology.

    Kelly is absolutely right that “sin taxes” are designed to discourage use; that’s what existing and proposed fees and regulations for gun owners are. Several readers have compared gun controls to the “poll tax” that was nominally a revenue generating mechanism for governments, but was really intended to disenfranchise African-Americans, Native-Americans, and poor people from exercising their right to vote.

  8. avatarJumbie says:

    I agree that the swords were drown on this man for no reason. I fact, he was factually correct that taxes on firearms are used to discourage use and more are proposed all the time.

    Now, RF’s point is that those gun taxes are meant to fund conservation projects, not discourage use, but for me that’s only an ‘official’ or historical reason. Most supporters of gun taxes aren’t in it for the conservation. They see it as a sin tax and hope it discourages use.

    I can’t blame Southwest guy for seeing it the same.

    • avatarSIGCDR says:

      Maybe I can provide you some facts that would change your mind on your contentions that “swords were drawn on Mr Kelly for no reason.” and that
      “In fact, he (Mr Kelly) was factually correct that taxes on firearms are used to discourage use and more are proposed all the time.”

      Federal firearms taxes have not in the past or now been ever used to discourage their use. To support this fact, I would like to introduce comments recorded in the Congressional Record 24 July 2008 by Sen Max Baucus (D-MT) who is the Chairman of the Senate Finance Committee, member Senate Subcommittee on Taxation, IRS Oversight, and Long-term Growth, and Chairman of the Joint Committee on Taxation.

      “It is important for my Colleagues to understand the history and nature of the firearm and ammunition excise tax. During the Great Depression, hunters and conservationists recognized that overharvesting of wildlife would destroy America’s treasured wildlife and natural habitats. Sportsmen, state wildlife agencies, and the firearm and ammunition industries lobbied Congress to extend the existing 10 percent excise tax and impose a new 11 percent excise tax to create a new fund. The fund was called the Pittman-Robertson Trust Fund after Senator Key Pittman of Nevada and Representative A. Willis Robertson of Virginia. President Franklin D. Roosevelt signed the legislation into law in 1937.

      The industry, hunters, and conservationists came together to create this structure. They recognized the importance of conservation. And they encouraged Congress to impose a tax on their guns and ammo. It is a rare thing when taxpayers ask to be taxed. But preserving our country’s wildlife habitat was and continues to be that important.

      Today, more than $700 million each year is generated and used exclusively to establish, restore, and protect wildlife habitats.”

      Sen Baucus’s statement is part of record pertaining to the Firearms Excise Tax Improvement Act of 2010 (H.R. 5552) which passed in the Senate by unanimous consent and in the House of Representatives at the end of June 2010 by a vote of 412-6. President Obama signed the act into law in late August 2010. Keep those dates in mind.

      The House bill was sponsored by Rep. Ron Kind (D-Wisc.) and Rep. Paul Ryan (R-Wisc.). The Senate bill (S. 632) was sponsored by Sen. Max Baucus (D-Mont.) and had 30 cosponsors, including lead co-sponsor Sen. Mike Crapo (R-Idaho) who co-chairs the Congressional Sportsmen’s Caucus. The six representatives voting against it included allegedly pro-gun Congressman Ron Paul who was joined by some of the Who’s Who of House anti-gunners John Conyers (D-MI), Dennis Kucinich (D-OH), and Maxine Waters (D-CA).

      Now more on from Senator Baucus on the Firearms and Ammunition Excise Tax.

      “The firearm and ammunition industry pays a Federal excise tax of 11 percent on long guns and ammunition and 10 percent on handguns. The Tax and Trade Bureau in the Treasury Department collects this tax. The Bureau sends the proceeds to the U.S. Fish and Wildlife Service, where they are deposited into the Wildlife Restoration Trust Fund, also known as the Pittman-Robertson Trust Fund. (note to readers the Trust fund was created by the Pittman–Robertson Federal Aid in Wildlife Restoration Act of 1937).

      The tax is a major source of conservation funding in America. Since 1991, the firearm and ammunition industry has contributed about $3 billion to the Pittman-Robertson Fund.”

      Until passage of the bill firearms and ammunition manufacturers were the only industry that had to pay excise taxes every 2 weeks. Other industries, such as archery and fishing, pay their tax every 3 months. This frequent payment obligation imposed a costly and inequitable burden on the firearms and ammunition industry plus denied them the interest of their revenues versus other industries. Recognizing that a delay in payments would ultimately reduce the interest earned in the trust fund the firearms and ammunition industry proposed actually increasing their taxes to fund wildlife conservation. Again from Mr. Baucus’s statement.

      “Now let me explain the effect that the bill we are introducing today would have on the Pittman-Robertson Trust Fund. As the Joint Committee on Taxation explained in its revenue estimate, the net budget effect to the fund is $4 million. This is purely a result of the shift in the timing of collections, from bi-weekly to quarterly, over a 10-year budget window. Consumers of firearms and ammunition would still pay the exact same amount of tax.

      The firearm and ammunition industry recognizes the 10-year $4 million loss to the trust fund. The industry developed a comprehensive 5-year proposal to ease this effect. Under the proposal, the industry would contribute $150,000 a year for the next 5 years, a total of $750,000, to the fund.

      These actions again show the partnership between hunters, conservation groups, and the firearm and ammunition industry to protect conservation programs and initiatives. That is why this legislation is supported by the following groups: Archery Trade Association; Association of Fish and Wildlife Agencies; Boon and Young; Congressional Sportsmen’s Foundation; Delta Waterfowl; Ducks Unlimited; National Rifle Association; National Shooting Sports Foundation, Inc.; National Wild Turkey Federation; North American Wetlands Conservation Council; Pheasants Forever; Rocky Mountain Elk Foundation; Safari Club International; Wildlife Management Institute; U.S. Fish and Wildlife Service; U.S. Sportsmen’s Alliance.”

      While it is possible that some unknowing SWA corporate communications staffer drafted Mr Kelly’s column, I find it hard to believe that SWA’s and A4A’s lawyers and K Street lobbyist did not have a peek at the column before it was released to publish. Given the 7.5% airline passenger ticket excise tax, the federal fuel and corporate income tax, I am sure Mr Kelly is on a first name basis with Mr Baucus. Odd then that Mr Kelly never read the papers about a major change to federal excise taxes that was being championed by Senator Baucus and the President as a pro-gun and pro-conservation action.

      Finally lets turn to SWA press releases that were contemporaneous with the passage of the Firearms Excise Tax Improvement Act of 2010 (H.R. 5552). On 18 October 2010, SWA announced a donation of $100,000 to the National Wildlife Refuge Association (NWRA) that would go toward with working with the U.S. Fish and Wildlife Service to acquire and restore brown pelican nesting sites along the Gulf in an effort to help ensure the survival of 10,000 brown pelican chicks in 2011.

      Now compare that $100,000 one time event to the $4.7M per day that gun owners contribute to wildlife conservation. An excise tax that the sporting arms and ammunition manufacturers lobbied for in 1919 when they recognized that the environment and wildlife could be better managed to benefit wildlife, sportsman, and the general public.

      Federal firearms and ammunition excise taxes are not now and have never been “sin” taxes and that is a fact. The tobacco and booze industries have never lobbied to tax themselves to my knowledge or promoted the welfare and common good our citizens, wildlife, and environment.

      Mr Kelly and his company whether inadvertently or not impugned an entire industry and I would expect them to do more due diligence before opining again on excise tax or 2a policy. I could even make the case that it smacks of hypocrisy when SWA has a web page devoted to attacting hunters and fisherman to fly SWA to exotic locales but then characterizes the tools they use to pursue their support as implements of sin.

      I believe Mr Kelly as a busy executive of a $17B company probably missed the not too fine point of firearms excise tax law and history. but he should ensure that in the future no one else in his company is in any way seen as taking the opposing side in the 2A debate.

      I don’t think either myself or RF owe Mr Kelly any apology but we should be more than willing to accept his seemingly sincere effort to make amends.

  9. avatarAdam says:

    Honestly I thought the whole thing was blown out of proportion in the first place. It didn’t sound like he was implying guns were bad or should be restricted or anything like that. I have plenty of other reasons not to fly southwest besides their actual or perceived stance on gun control.

  10. avatarJames1000 says:

    Meh…nothing to see here in my opinion.

  11. avatarPatrick says:

    I would understand offense at subtle negligence if he called firearm taxes “sin taxes”, even in the context of an entirely different topic, but he did use the term “so-called”, and put “sin taxes” in quotes.

  12. avatarPaul W says:

    Tilting at windmills here. With all the *real* crap going on, you’re going after a corporation that probably never has been interested in fighting for/against the 2nd amendment at all because they mentioned the taxes on firearms as sin taxes…they were making an entirely unrelated point, gave a slightly flawed example that wasn’t prejudicial against firearms, and people got butthurt. WTF?

  13. avatarTex74 says:

    “Oh shit I just jumped into the frying pan! Jump out! Jump out!”

  14. avatarRich says:

    I think RF went a little sideways on this IMHO. I fly SWA whenever I can, which is quite a bit. I believe the sin tax description was pretty accurate and the way I read it was that he was against those other taxes as well. As am I. Perhaps I’m wrong but quite frankly if he’s against giving fed.gov more money in any form, so am I and I’ll count him as a minimum as “an enemy of my enemy”.

    (I too just about vomit at the “reach out to” responses but if that’s all I had to pick at I’d be happy with that situation)

  15. avatarDisThunder says:

    I don’t blame him. I wouldn’t want to be in the middle of this if I didn’t have to be–
    although those who think they don’t have a stake in this will be finding their days more and more numbered.
    And while the insinuation was there in the “sin tax” comment, I didn’t really read it as intentional then, or now. So, thanks for the apology, Mr. Kelly, and hopefully you maybe learned a little about how passionate our side of the fence really is. People think that because we don’t wave bloody shirts we’re not as dedicated- dead wrong. We wave our wallets.

  16. avatarSIGCDR says:

    Some here have characterized my original email to RF as a case of over reacting to a highly admired corporate CEO’s slightly flawed example that was not “prejudicial against firearms.”

    I would submit that it was not an over reaction and the fact that SWA was so quick to write an apology validates that. SWA’s corporate communications staff recognized that Mr Kelly had stepped over a bright red line by equating guns with sin thereby causing offense to at least some gun owners. SWA may have learned from this episode that gun rights are precious to at least some Americans and that we don’t like being called sinners for having a personal defense weapon. I am a sinner for sure but not for having a gun.

    Just as important though is that gun owners learn that we are at war with an enemy who is a master of propaganda and psyops who is working to stigmatize and isolate gun owners as pariahs. As Lenin said, “A lie told often enough becomes the truth.”

    Lenin also knew that a disarmed population was a prerequisite to the absolute supremacy of the state because “One man with a gun can control 100 without one.”

    Christopher Dorner recently showed what a threat one rifleman is to a police state. Therefore the elites must disarm the American populace and the conditioning of the masses against gun ownership is central to that plan. Mr Kelly’s overlooking of the a staffer’s inclusion of gun excise tax in the sin tax category reflects the effectiveness of the campaign in subtly shaping even the attitudes of a native Texan born in San Antonio, the home of the Alamo.

    This organized effort to stigmatize gun owners is led by an “ends justifies the means” cabal that dances in the blood of slain children to advance its agenda. Like useful utopian idiots and greedy public sector employees, many big businesses would be fellow travelers seeking to curry favor with the state if it were not for their CEO’s fears that a boycott by gun owners would hurt this quarters financial performance and their bonus.

    Lenin understood the heart of big business, “The Capitalists will sell us the rope with which we will hang them.” Gun owners through the power of the purse should not be reluctant to make big business afraid of collaborating with a runaway government that seeks to eliminate our individual freedom. Lenin knew individual freedom and the state desired by our current President cannot co-exist. “When there is state there can be no freedom, but when there is freedom there will be no state.”

    For those who doubt there is a concerted effort to stigmatize and isolate gun owners I offer up the following examples that took all of five minutes to find via Google.

    “Breitbart.com has uncovered video from 1995 of then-U.S. Attorney Eric Holder announcing a public campaign to “really brainwash people into thinking about guns in a vastly different way.” Holder was addressing the Woman’s National Democratic Club. In his remarks, broadcast by CSPAN 2, he explained that he intended to use anti-smoking campaigns as his model to “change the hearts and minds of people in Washington, DC” about guns.” What was Fast and Furious other than an attempt to drum up support for re-institution of the AWB.

    A year before Eric Holder made his remarks, Dr. Mark Rosenberg, as Director of the Centers for Disease Control’s National Center for Injury Control and Prevention, advocated treating guns like cigarettes, until they become “dirty, deadly, and banned.”

    Valerie Jarrett and Barack Obama were both on the board at the Joyce Foundation. “Since 2003, the Joyce Foundation has paid grants totaling over $12 million to gun control organizations. The largest single grantee has been the Violence Policy Center, which received $4,154,970 between 1996 and 2006, and calls for an outright ban on handguns, semi-automatic and other firearms, and substantial restrictions on gun owners. – Wikipeida article on the Joyce Foundation. ” A listing of the grantees shows that all of them fall within the education, medical, public health, children’s health, gun control advocacy, media, consumer and local government groups. Again to quote from Lenin, “Give us the child for 8 years and it will be a Bolshevik forever.”

    From the Huffington Post, 12/21/2012, Breaking the American Gun Culture Once and For All, Bob Cesca, “Due to effective marketing and lobbying, gun ownership has evolved from being a frontier necessity to a creepy, penile, Freudian symbol of masculinity and power. American guns have become unmistakable displays of virility and strength — of aggression, resolve and heroism….. The campaign against Big Tobacco, for example, has been highly successful on both fronts: cigarettes are more difficult to purchase (advertising has disappeared and prices have skyrocketed, though not enough), and the very act of smoking has become increasingly stigmatized, with smokers banished outside to huddle like societal pariahs under awnings and in bus shelters. It’s absolutely possible to accomplish the same goals with firearms.”

    David Hemenway is the Director of the Injury Control Research Center at Harvard University. During an NPR interview he described how to curb gun violence. His argument was society needs to treat guns like cigarettes. There was a time when cigarettes were glamorous, and now they are considered disgusting. Everyone has been educated about the health risk and as a result, those who still smoke have become largely inconspicuous.

    From the Daily Kos, 12/14/2012, “Let’s make guns as unpopular as cigarettes”, These mass shootings have amounted to a public health crisis. The gun industry reminds me of the tobacco industry — selling a lethal product but washing their hands of the consequences. Well, the tobacco industry eventually had to admit their lies. They have had to put warning labels on their products. They’ve seen their sales shrink. And tobacco has been taxed and banned in many places. People still smoke, but we are no longer duped into believing that cigarettes are safe or just an individual choice….We can do the same thing with guns.

    Gun owners are in a fight to preserve our individual liberty. The enemy from within is relentless and will use every means available to convince low information voters that the state is a kind mother figure who is trying to save them from testosterone crazed, macho, gun owning sinners ready to slay their children. We must push back against this meme that lawful gun owners are the pariahs responsible for the murder and mayhem caused by 50 years of coddling of the criminal and insane members of society.

    As for Mr Kelly, who is the Chairman-CEO of the largest US domestic airline with over $17B in revenue, he is not a low information voter. Since 1999 FEC records show he has given $32,500 to Democratic candidates and $6,600 to Republican candidates for federal office. He is a Certified Public Accountant and former CFO of SWA. A CPA and CFO of a fleet of 600 airborne bars which pay “sin taxes” on all of the liquor consumed in those bars should be more knowledgeable about the history of sin taxes.

    Lumping the excise taxes on ammunition and guns in with tobacco and booze was a mistake. Maybe Mr Kelly can fly back down to his hometown, San Antonio on Warrior One and walk around the hallowed grounds of the Alamo to reinforce his commitment to the second amendment and the why free men have guns. We have them to prevent tyranny. Concurrent with his trip to the Alamo, I am sure the NRA would appreciate him presenting a nice check to Eddie Eagle.

    Mr Kelly by all accounts seems to be a man of integrity who leads by example. He is the leader of one of America’s top 10 most admired companies. Although his unintentional mistake does not rise to the same level as SWA Captain James Taylor’s, I think it is appropriate that he be held to the same high standard that SWA held Captain Taylor who in 2011 unintentionally broadcast a conversation with his co-pilot that was peppered with foul language directed at gay, overweight and older flight attendants. According to SWA Captain Taylor was reprimanded, temporarily suspended without pay and received diversity education before being reinstated. Captain Taylor also sent an e-mail apology to all of Southwest’s employees, especially the crew bases they criticized.

    I don’t think calling attention to Mr Kelly’s unintentional misinterpretation of “sin tax” is an over reaction and I don’t think Mr Kelly took it as one either.

    Notwithstanding that, as that great libertarian Barry Goldwater said in his 1964 Republican presidential nomination acceptance speech, “I would remind you that extremism in the defense of liberty is no vice! And let me remind you also that moderation in the pursuit of justice is no virtue!”

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