Elliott pushes for Southwest Airlines Shareholder Vote on New Directors
- Elliott Management, the second largest shareholder of Southwest Airlines, has called for a special meeting to vote on eight new directors.
- This request follows significant operational failures in December 2022, which resulted in over $1 billion in losses for the airline.
- The proposed changes aim to modernize the airline's leadership and strategy, reflecting ongoing concerns about its performance and adaptability.
In the United States, Elliott Management, the second largest shareholder of Southwest Airlines, has called for a special meeting of shareholders to vote on a proposed slate of eight new directors. This move comes as the hedge fund, led by billionaire Paul Singer, has been critical of the airline's leadership and strategy, particularly following significant operational failures that resulted in over $1 billion in losses due to flight cancellations in December 2022. Elliott recently acquired an 11% stake in the airline and is advocating for a complete reconstitution of the board to address what it sees as unfulfilled potential and outdated practices. The proposed directors include former CEOs from major airlines and a senior official from the Department of Transportation, indicating a push for experienced leadership to navigate the challenges facing Southwest. The airline has made some operational improvements, with its cancellation rates slightly better than industry averages in 2023, but it continues to face scrutiny due to a series of troubling incidents, including a near-crash event. In response to these challenges, Southwest has introduced a new strategy, dubbed Southwest 2.0, which includes changes such as assigned seating and partnerships with international airlines. These changes aim to modernize the airline's offerings and improve customer satisfaction. However, the effectiveness of these measures remains to be seen, as the airline struggles to adapt to evolving customer preferences and technological advancements. The upcoming shareholder meeting, scheduled for December 10, will be crucial in determining the future direction of Southwest Airlines and whether Elliott's proposed changes will be implemented.