Kelly spent 3 years in this role until he was promoted to become Southwest's fifth CEO and vice chairman in 2004[4] replacing James Parker who succeeded Herb Kelleher in 2001.

Kelly was named chairman of the board of directors of Southwest Airlines on May 21, 2008, replacing co-founder Herb Kelleher.

[5] Gary Kelly also became president of Southwest Airlines the same year, replacing Colleen Barrett when her contract expired on July 15, 2008.

[7][8] He has led the company through a number of transformative, large-scale initiatives including the revamp of the airline’s Rapid Rewards program,[9] the introduction of the Boeing 737–800[10] and 737 MAX[11] aircraft to Southwest’s fleet, the acquisition of AirTran Airways,[12] the launching of Southwest's first international service,[8][12] an update to the airline’s branding,[13] the adoption of the Amadeus reservation system,[14] and large expansion projects at the company’s corporate headquarters in Dallas.

[17] After Congress passed additional Payroll Support Program (PSP) measures, the SWA BoD retroactively reinstated Gary Kelly's full salary.

[25][26] The union blamed the crisis on Kelly's leadership, saying that he had fostered a corporate culture in which senior executives made decisions in isolation, and contrasting this with what it described as Southwest's history of "ground-up decision-making".

[28][29] Elliott demanded that Kelly and Jordan step down, blaming the pair for the sharp decrease in the value of Southwest stock over the preceding years.

[29][30] However, the airline announced in late October that Kelly would retire early on November 1, 2024 instead, and would assume the title of chairman emeritus.

[32][33] Kelly was named one of the best CEOs in America for 2008, 2009 and 2010 by Institutional Investor magazine and serves on the President's Council of Jobs and Competitiveness.