A Southwest Airways Boeing 737 departs Los Angeles Worldwide Airport en path to Las Vegas on September 19, 2024 in Los Angeles, California.
Kevin Carter | Getty Pictures
Elliott Administration mentioned Tuesday it is going to name a particular assembly at Southwest Airways “as quickly as subsequent week,” shortly after the corporate put ahead a sweeping board shakeup that it hoped may stave off a proxy struggle.
The push comes days earlier than the airline’s investor assembly, the place it’s anticipated to unveil enhancements and working modifications. Elliott is in search of to oust CEO Bob Jordan and govt chairman Gary Kelly, the latter of whom has already dedicated to stepping down in 2025. The activist has put ahead a ten-director slate comprised of airline executives and former regulators or authorities officers.
“We imagine that competent new leaders, working via a deliberate and considerate course of, ought to chart the course ahead for Southwest,” Elliott accomplice John Pike and portfolio supervisor Bobby Xu mentioned in a letter to shareholders.
“We do not assist the Firm’s present course, which is being charted in a haphazard method by a bunch of executives in full self-preservation mode,” Pike and Xu wrote.
Southwest’s shareholder assembly is often scheduled for Might, however by calling for a particular assembly Elliott is trying to elect new administrators a lot before that. It takes just a few months for each side to solicit shareholder assist, and a settlement is all the time doable within the interim.
Elliott mentioned Southwest’s advisors had been maneuvering to restrict the variety of shareholders eligible to vote, by way of one thing often called a “false document date.”
Southwest Airways in July unveiled main modifications to its greater than 50-year-old enterprise mannequin: It should quickly ditch open seating for assigned seats, supply seats with extra legroom that command larger fares and begin working red-eye flights. Final week, COO Andrew Watterson warned workers to brace for extra “troublesome choices” in its push to revive income because the airline faces rising prices and shifting journey patterns.
The corporate is not planning to furlough staff but it surely may minimize its presence in sure cities and provides staff the possibility to switch to different bases, in accordance with an individual aware of the matter.
Southwest will launch a routine schedule replace on Wednesday that may present its flights via early June. Earlier this month, govt chairman and former CEO Gary Kelly mentioned he would step down after the provider’s shareholder assembly subsequent yr.
The Plane Mechanics Fraternal Affiliation, which represents Southwest’s mechanics and met with Elliott, mentioned final week the activist investor made “clear that its imaginative and prescient of a Southwest turnaround is one the place Robert Jordan doesn’t stay as CEO, and if Elliott can assert sufficient Board affect, different high executives would additionally, almost certainly, get replaced.”
“The necessity for change is pressing, and our request for a particular assembly could come as quickly as subsequent week,” Pike and Xu mentioned.
Southwest didn’t instantly return a request for remark.
