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Investor pressure leads to Southwest boardroom upheaval
Southwest Airlines Chairman Gary Kelly is set to retire and several board members are also stepping down.
It comes as the airline is under pressure to make fundamental structural changes by activist investor Elliott Investment Management.
Elliott now has a 10% stake giving it the ability to put some of its strategic ideas to a vote.
The hedge fund has also called for the ousting of the CEO Robert Jordan.
A Southwest SEC filing said six directors will step down in November.
The airline will propose four new board members which may include external candidates that Elliott has already said it would like to see appointed.
The Southwest board also plans to announce an updated business plan at its investor day later this month.
Elliott says Southwest’s management has dropped the ball since the pandemic and it has underperformed.
The airline’s stock value is down by half since 2021.
Elliott says Southwest has been slow to adapt to changing customer preferences and adopting more efficient technology.
The latter was partly responsible for a mammoth IT meltdown in late 2022 which cost the airline hundreds of millions.
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Editor for TravelMole North America and Asia pacific regions. Ray is a highly experienced (15+ years) skilled journalist and editor predominantly in travel, hospitality and lifestyle working with a huge number of major market-leading brands. He has also cover in-depth news, interviews and features in general business, finance, tech and geopolitical issues for a select few major news outlets and publishers.
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