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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 financial problems. Shares in the airline rose 9% in midday trading Monday, on pace for the biggest one-day increase in four years.

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. The firm said Southwest failed to evolve, hurting its ability to compete with other carriers. It said the Dallas-based carrier has outdated software and operational processes, which were behind the airline's massive flight cancellations in December 2022.



“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. Elliott said that CEO Robert Jordan “has delivered unacceptable financial and operational performance quarter after quarter." 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 “significant” changes on the board, including new independent directors with experience at other airlines. Southwest said it was contacted by Elliott on Sunday .

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