Elliott Management, which has been calling for leadership and board changes at Southwest Airlines since taking a $1.9 billion stake in the carrier in June, sent a second letter to Southwest shareholders on Tuesday, informing them of the investment company’s intent to call a special meeting in the coming weeks, and to encourage shareholders to ensure they have full voting rights. The first letter was sent in late August.
“Given the reckless and chaotic actions that Southwest’s leaders keep taking in an attempt to preserve their jobs—and the resulting risk to the Company and its constituents—the need for change is urgent, and our request for a special meeting may come as soon as next week,” wrote Elliott partner John Pike and portfolio manager Bobby Xu in the letter.
Southwest earlier this month announced sweeping changes to its board of directors, with six retiring in November, and chairman and former CEO Gary Kelly to step down after Southwest’s 2025 annual meeting. The carrier said it would consider up to three candidates of the 10 that Elliott put forth previously, but that CEO Bob Jordan would remain—a move that Elliott does not endorse.
The carrier in July also announced it was to introduce assigned seating and a premium cabin with extra legroom as it looks for ways to increase revenue.
Further, earlier this week, Southwest warned employees of the “tough decisions” to be announced in the “coming days” to restore profits and fend off the takeover challenge from Elliott, Bloomberg reported. Southwest is holding its investor day on Sept. 26.
Elliott added in the letter that it does “not support the Company’s current course, which is being charted in a haphazard manner by a group of executives in full self-preservation mode.” It also encouraged shareholders to call back all their shares prior to Oct. 7, which is the current record date set by Southwest’s board, so they could vote those shares in any upcoming special meeting, according to Elliott.
“In the coming weeks, we will be formally requesting a special meeting to provide you with a choice between the new directors that we have put forward—who we believe possess the qualifications and skills to guide Southwest to a brighter future—or a Board that lacks relevant expertise and has pre-committed itself to supporting failed CEO Bob Jordan,” Pike and Xu wrote.
Southwest did not immediately respond to a request for comment.
