Activist investor Elliott Management has announced plans to call a special meeting at Southwest Airlines, potentially as early as next week, in an effort to shake up the airline’s board, CNBC reports.
Elliott is pushing for the meeting ahead of Southwest’s usual shareholder gathering in May, with the aim of electing new directors much sooner.
Elliott has proposed a slate of 10 new directors, consisting of airline industry experts and former government officials, as part of its campaign to replace current leadership, including CEO Bob Jordan and Executive Chairman Gary Kelly. Kelly, who previously served as CEO, has already indicated plans to step down in 2025.
In a letter to shareholders, Elliott’s John Pike and Bobby Xu criticized the current executive team’s approach, describing it as “haphazard” and driven by “self-preservation.” They emphasized the need for new leadership to guide Southwest’s future.
Southwest Airlines responded by defending its leadership and warning that Elliott’s proposed changes could destabilize the company at a critical time. The airline stated that replacing its board with Elliott’s candidates could pose a “catastrophic risk” to shareholders, especially given the lack of specific ideas from the activist investor for improving the business.
This move by Elliott comes as Southwest is set to unveil operating changes and improvements at an upcoming investor meeting. The company recently announced updates to its long-standing business model, including the introduction of assigned seating and more premium seat options. However, the airline faces ongoing challenges, including rising costs and evolving travel trends, prompting warnings of difficult decisions ahead.
Elliott has also raised concerns about potential efforts by Southwest’s advisors to limit voting rights for certain shareholders, suggesting the use of a “false record date” to do so. The special meeting, if called, could take several months to organize as both sides seek shareholder support. However, a settlement could still be reached before then.
