Southwest Airlines in Talks with Elliott Investment Management
A potential settlement between Southwest Airlines and Elliott Investment Management could give the activist investor significant representation on the airline’s board. Sources close to the matter reveal that discussions are underway, with Elliott likely to gain fewer than six seats on the 12-member board.
A Shift in Leadership?
Elliott has been pushing for changes at Southwest, including the ousting of CEO Bob Jordan. The airline, however, has expressed its support for Jordan, who has been instrumental in implementing major changes to the company’s business model. As part of its efforts to boost revenue and competitiveness, Southwest plans to introduce extra legroom seats and abandon its open-seating model.
A Three-Year Plan for Growth
At a recent investor event, Southwest unveiled a three-year plan aimed at adding $4 billion to its earnings before interest and taxes by 2027. The airline also authorized a $2.5 billion buyback and announced plans to reduce its Atlanta flights to increase profits.
Settlement Talks in Early Stages
While discussions between Southwest and Elliott are ongoing, sources caution that a deal may not be reached. The talks are still in their early stages, and the parties involved have yet to come to an agreement.
What’s Next for Southwest?
As the airline prepares to release its third-quarter results, investors will be watching closely to see how the company’s plans for growth and restructuring unfold. With Elliott pushing for changes and Southwest committed to its current leadership, the future of the airline remains uncertain.
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