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Southwest CEO shares the secret to why they've never had to layoff a single employee, or cut pay

The stock of Southwest Airlines had investors salivating on Wednesday as transports surged. Yet according to CEO Gary Kelly, the secret sauce to the company's competitiveness is its culture.

"Our people are fantastic, it really is what sets us apart competitively in the industry and they are the ones that have made Southwest so successful," Kelly told "Mad Money" host Jim Cramer.

Southwest began operating in 1972, and during the span of its 45-year history, the company has never a single layoff or pay cut for any employee. It has also been profitable every year since its first full year of operation.

"There is a lot to a culture, and it's easier to have a strong culture if you feel like you're a champion. And that's the way our employees feel," Kelly said.





Gary Kelly, CEO, Southwest Airlines
Scott Mlyn | CNBC
Gary Kelly, CEO, Southwest Airlines

Southwest reported a strong uptick in traffic for the month of November, up 7.2 percent, on Wednesday. Carrying capacity rose 4.9 percent. Kelly confirmed that optimism and hope for the future stemming from the presidential election played a role in the change of trajectory.

"We could tell an inflection after the election … and it's very exciting," Kelly said.

Moving forward, Kelly expects to see modest domestic growth in 2017, but said there are opportunities for the company to grow internationally.

"If the economy in fact continues to grow, oil prices continue to stay low, we are going to do really well," Kelly said.


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