How much will Southwest Airlines change to boost profits? Some details are emerging
Southwest Airlines leaders say they will provide more details about their plan to change the airline and increase profits
DALLAS — Leaders of Southwest Airlines are set to explain how they plan to remodel the airline to change with consumer tastes — and maybe keep their own jobs.
They will give more details at an investor meeting Thursday about dumping so-called open seating, charging a premium for the best seats, and launching red-eye flights.
The changes to some of Southwest’s quirky habits are designed to reverse its shrinking profits and slumping stock price. It’s unclear whether the changes will work, but they could leave an airline that bears little resemblance to Southwest over the last 50 years — a carrier that still has a core of rabid fans.
Southwest has been contemplating an overhaul for months, but the push for radical change became even more important to management this summer, when Elliott Investment Management targeted the company for its dismal stock performance since early 2021.
Elliott now owns more than 10% of Southwest shares and is the airline's second-biggest shareholder. The hedge fund wants to fire Chairman Gary Kelly and CEO Robert Jordan and replace two-thirds of Southwest's board.
Southwest gave ground this month, when it announced that six directors will leave in November and Kelly will step down next year. The airline is digging in to protect Jordan, however.
Despite its demand that heads roll, Elliott has said it wants to work with Southwest to improve the company's financial results. Southwest doesn’t seem interested in collaboration. It adopted a poison-pill defense to make an Elliott takeover more difficult.
Elliott, the hedge fund controlled by billionaire financier Paul Singer,
Read more on abcnews.go.com
