Elliott Investment Management Increases Pressure on Southwest Airlines

Elliott Investment Management, led by Paul Singer as one of the world's most active investors, has officially requested an extraordinary shareholders' meeting with Southwest Airlines. The background to this is a planned replacement of eight board members, a step the fund is urgently pursuing after accumulating an 11% stake. Back in September, Southwest announced that six board members, including Chairman Gary Kelly, had announced their resignations. Previously, Elliott had demanded the removal of CEO Bob Jordan and initially planned to nominate a 10-member board. However, the current adjustments now only envisage three new board seats. Meanwhile, the Dallas-based company has taken measures to improve financial performance, including a stock buyback program and the introduction of fixed seat reservations. Despite a slight recovery in share prices over the past 12 months, rising by about 20%, they continue to lag behind competitors like Delta Air Lines and United Airlines Holdings. In an effort to increase its operating profit by $4 billion by 2027, Southwest has announced extensive strategic changes. Jordan defended his actions, calling Elliott's approach 'tactics and gimmicks' that do not benefit the airline in any way. Elliott has so far preferred to avoid loud disputes and instead achieve direct agreements with target companies. At Southwest, this marks the first request for an extraordinary shareholders' meeting in the company's history. Artisan Partners Limited Partnership, another activist investor, is also involved with Southwest.