Elliott Pushes for Leadership Changes at Southwest Airlines After $1.9B Stake

Southwest Airlines’ stock value is up by about 7% after Elliott Investment Management disclosed an 11% stake worth approximately $1.9 billion, making it one of the largest investors.

Elliott has already called for leadership and board changes, criticizing the current management for poor financial performance despite strong travel demand in the airline industry.

Elliott specifically highlighted the need for new leadership outside the company, pointing to CEO Bob Jordan’s unsatisfactory performance since taking over in February 2022.

The airline has faced significant challenges, including a systems meltdown that led to massive flight cancellations and financial losses, as well as ongoing delays in Boeing 737 MAX aircraft deliveries, which have hindered its growth plans. 

Southwest’s shares are up about 3% this year, lagging behind the S&P 500 and rivals like Delta and United Airlines.

Elliott believes a comprehensive business review and the addition of independent directors with expertise in airlines, customer experience, and technology could boost Southwest’s stock to $49 per share within 12 months. Despite these criticisms, Southwest’s board expressed confidence in Jordan’s leadership and is looking forward to engaging with Elliott.

For more detailed information, check out the full article on Reuters.