Activist says he wants changes at Southwest

BTN News
Tuesday, 11 June 2024

US activist investor Elliott Investment Management says it has taken a US$1.9 billion stake in Southwest Airlines and it wants returns from the carrier to improve.


In a statement, Elliott said: “Southwest’s 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.

“Southwest’s rigid commitment to a decades-old approach has inhibited its ability to compete in the modern airline industry.”

It added that Southwest’s share price is down more than 50 per cent from early 2021. The stock gained more than six per cent on Monday after the announcement.

Delivery delays at Boeing mean Southwest will see only 20 of 79 promised new 737 jets this year.

The carrier also suffered reputational damage in 2022, when computer issues forced it to cancel 16,700 flights between December 21 and 29 that year, equal to nearly half its Xmas schedule.

The disruptions cost it more than US$1 billion in passenger compensation, increased pay for staff and lost ticketing revenue, in addition to a US$140 million fine by the Department of Transportation.

“The Southwest board of directors is confident in our ability to execute against the company’s strategic plan to drive long-term value for all shareholders, safely and reliably serve our customers and deliver on our commitments to all of our stakeholders,” Southwest said.

Southwest is already said to be considering a revamp to its fares and free-seating policies.

Activist says he wants changes at Southwest

BTN News
Tuesday, 11 June 2024

US activist investor Elliott Investment Management says it has taken a US$1.9 billion stake in Southwest Airlines and it wants returns from the carrier to improve.


In a statement, Elliott said: “Southwest’s 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.

“Southwest’s rigid commitment to a decades-old approach has inhibited its ability to compete in the modern airline industry.”

It added that Southwest’s share price is down more than 50 per cent from early 2021. The stock gained more than six per cent on Monday after the announcement.

Delivery delays at Boeing mean Southwest will see only 20 of 79 promised new 737 jets this year.

The carrier also suffered reputational damage in 2022, when computer issues forced it to cancel 16,700 flights between December 21 and 29 that year, equal to nearly half its Xmas schedule.

The disruptions cost it more than US$1 billion in passenger compensation, increased pay for staff and lost ticketing revenue, in addition to a US$140 million fine by the Department of Transportation.

“The Southwest board of directors is confident in our ability to execute against the company’s strategic plan to drive long-term value for all shareholders, safely and reliably serve our customers and deliver on our commitments to all of our stakeholders,” Southwest said.

Southwest is already said to be considering a revamp to its fares and free-seating policies.