Hedge fund Elliott Investment Management has taken a large stake in Southwest Airlines and is pushing for significant changes within the company, including the removal of the CEO and chairman. The hedge fund now has control of the required 10% of shares needed to call a special shareholder meeting. Elliott intends to elect 10 new members to Southwest’s board and demands a reevaluation of the current leadership, board of directors, and a business review.
Southwest CEO Bob Jordan has resisted Elliott’s demands and proposed changes to policies like the ‘bags fly free’ perk. The airline and the hedge fund are set to meet on Sept. 9 to discuss the situation further. SMU economist Mike Davis notes that Southwest has been facing financial struggles, making it a target for change.
Southwest Airlines stated that they are prepared to meet with Elliott and will share details on their transformation at an investor day on Sept. 26. Recently, Southwest announced the end of open seating on their flights, hinting at more changes to come. Davis suggests that both employees and customers need to pay attention to the situation, as more changes may be on the horizon that could impact them. The outcome of Elliott’s push for change at Southwest remains uncertain, but it could lead to significant shifts within the company.
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