Elliott takes $1.9 billion stake in Southwest Airlines, seeks to oust CEO and chair

Elliott Management cited several reasons for Southwest Airlines' decline from a "best-in-class" airline. The activist hedge fund believes that under the leadership of CEO Bob Jordan and Chair Gary Kelly, Southwest has experienced a period of "stunning underperformance." Some of the challenges the airline has faced include delays in the delivery of Boeing's 737 Max planes, shifting travel demand patterns following the pandemic, and a holiday meltdown in 2022 that cost the company over $1 billion. These issues have led to a decline in Southwest's competitiveness compared to rivals that offer more perks and products to travelers.

Elliott Management's $1.9 billion stake in Southwest Airlines makes the activist hedge fund one of the airline's largest shareholders. The size of this stake indicates the level of influence Elliott Management could have in pushing for leadership changes and strategic reforms within the company. As a renowned activist investor, Elliott Management is known for engaging with companies to address underperformance and drive changes to enhance shareholder value3. In this case, their significant stake in Southwest Airlines signals their commitment to advocating for improvements within the struggling airline.