In a bold move to reshape the direction of Southwest Airlines, activist investor Elliott Investment Management is calling on shareholders to vote on replacing key members of the airline’s board, New York Post reports.
Elliott, which holds a 10% stake in Southwest, is urging a December meeting where investors will have the opportunity to nominate eight new directors who could guide the company’s future strategy.
The call for this special shareholder meeting comes after Elliott expressed dissatisfaction with Southwest’s recent efforts to improve its financial performance. Despite changes aimed at boosting profits—such as enhancing customer experiences and introducing strategic partnerships—Elliott believes these measures are insufficient to turn the company around.
“Absent a thorough reconstitution of its Board, the story of Southwest will remain one of empty promises and unfulfilled potential,” said John Pike, an Elliott partner, and Bobby Xu, portfolio manager at the firm.
Elliott, which manages around $70 billion in assets, has been pushing for months to replace several board members, including advocating for the removal of CEO Bob Jordan. Although their latest proposal does not explicitly target Jordan’s position, sources indicate that the hedge fund remains committed to installing new leadership, including a potential change in CEO.
Southwest, which has struggled to recover from the financial setbacks of the COVID-19 pandemic, has seen its stock price fall by 42% over the past five years. While it has rebounded somewhat in 2024 with an 8% increase, the airline’s ongoing profit struggles have kept investor confidence low.
Elliott’s nominees for the board include industry experts such as Michael Cawley, former deputy CEO at Ryanair, and David Cush, former CEO of Virgin America. These candidates are seen as key to holding management accountable and driving long-term financial success.
The airline’s board currently consists of 15 members, but with upcoming retirements, it is set to shrink to 12 by next year. Southwest’s leadership, while acknowledging the challenges, has yet to comment on Elliott’s latest demands.
