An investment firm has taken a $1.9 billion stake in Southwest Airlines and wants to oust the CEO
Activist shareholder Elliott Investment Management has taken a $1.9 billion stake in Southwest Airlines and wants to get rid of the CEO
DALLAS — Activist shareholder Elliott Investment Management has bought a $1.9 billion stake in Southwest Airlines and is seeking to force out the CEO of the airline, which has struggled with operational and <a class=«zZygg UbGlr iFzkS qdXbA WCDhQ DbOXS tqUtK GpWVU iJYzE » data-testid=«prism-linkbase» href=«https://abcnews.go.com/The» wall street journal.>financial problems
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Shares in the airline rose 7% Monday, their second-best day since 2020.
In a letter to Southwest's board, the investment firm complained that Southwest's stock price has dropped more than 50% in the last three years.
Elliott said Southwest has failed to evolve, hurting its ability to compete with other carriers. The firm blamed the Dallas-based carrier's massive flight cancellations in December 2022 on what it described as the airline's outdated software and operational processes.
“Poor execution and leadership’s stubborn unwillingness to evolve the Company’s strategy have led to deeply disappointing results for shareholders, employees and customers alike,” the investment firm said in the letter, dated Monday.
Southwest CEO Robert Jordan “has delivered unacceptable financial and operational performance quarter after quarter," the letter read. It said Jordan and former CEO Gary Kelly, now the airline's executive chairman, «are not up to the task of modernizing Southwest.”
Elliott is calling for executives from outside the company to replace Jordan and Kelly, and for “significant” changes on the board, including new independent directors with experience at other airlines.
Southwest said it was contacted by Elliott on
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