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Southwest investor demands board changes
A new activist investor has emerged at Southwest Airlines and has the airline’s board in its sights.
Elliott Investment Management has acquired a $1.9 billion stake in the airline and has made it clear it wants to see changes at the top.
Elliott fired off a letter to the Southwest board, saying mismanagement has heavily impacted the share price, which is at 50% of its pre-pandemic value.
The hedge fund cited ‘poor execution and leadership’s stubborn unwillingness to evolve’ has resulted in ‘deeply disappointing results for airline shareholders, employees and customers alike.’
The move has given the share price an immediate bump, initially rising 8% in Monday trading.
That could lead to its biggest single day spike since before the pandemic.
New Southwest CEO Robert Jordan and predecessor Gary Kelly were ‘not up to the task of modernizing Southwest.’
“It has delivered unacceptable financial and operational performance quarter after quarter,” the letter added.
Elliott called for ‘significantchanges’ to the board, with new independent directors with previous airline experience.
Southwest Airlines says it welcomed discussions ‘to better understanding their views on our company.’
“The Southwest Board of Directors is confident in our CEO and management’s ability to execute against the company’s strategic plan to drive long-term value for all shareholders,” a spokesperson said.
Before the pandemic Southwest posted a profit for every one of its 47 years n business but the Christmas holiday IT meltdown in 2022 damaged the airline badly financially and in terms of brand value.
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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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