Investment Firm Takes $1.9 Billion Stake In Southwest Airlines

Elliott Investment Management has acquired a $1.9 billion stake in Southwest Airlines, seeking to oust CEO Robert Jordan due to operational and financial struggles, David Koenig reported for The Associated Press (AP).

The investment firm claims that Southwest’s leadership has failed to modernize the company, leading to disappointing results for stakeholders. I Photo: Southwest Airlines Facebook

Following the announcement, Southwest’s stock rose 7%, its best performance since 2020. Elliott criticized the airline’s outdated software and operations, particularly highlighting the massive flight cancellations in December 2022.

The investment firm claims that Southwest’s leadership has failed to modernize the company, leading to disappointing results for stakeholders.

Elliott’s letter to the board called for replacing CEO Robert Jordan and executive chairman Gary Kelly with external executives and suggested adding new independent directors with experience from other airlines.

Southwest acknowledged Elliott’s contact and expressed willingness to understand their perspectives. This move by Elliott aims to steer Southwest towards improved operational efficiency and financial performance.