Southwest Airlines LUV
Elliott, with ~11% of Southwest, calls the management team the worst in airlines and nominates ten independent directors to replace the CEO and restore industry-leading performance.
Thesis
Elliott Investment Management, holding approximately 11% economic exposure in Southwest Airlines, argues that the current management team is the worst-performing in the industry and has destroyed more shareholder value through inaction than any peer over the past two decades. Since Elliott released its initial June 2024 materials, Southwest has cut second-quarter revenue guidance again — the fourth cut in 18 months — adopted a shareholder rights plan to block Elliott, added a hand-picked director to entrench the Board, and issued disappointing third-quarter guidance. Elliott is nominating ten independent, highly qualified candidates — including former airline CEOs and Deputy CEOs with complementary expertise in technology, hospitality, consumer-focused businesses, labor relations, and regulatory oversight — and is soliciting a special shareholder meeting to replace directors and, ultimately, CEO Bob Jordan, whom a Top Ten Active Shareholder calls a headwind whose firing would be the tailwind.
SCQA
Southwest Airlines, a historically industry-leading US low-cost carrier, is one of Elliott's largest positions at roughly 11% economic exposure, yet it has trailed peers on nearly every relevant metric for the last two decades.
Management has delivered a fourth revenue-guidance cut in 18 months, adopted a poison pill to block Elliott, hand-picked a new director to entrench the board, and issued disappointing Q3 guidance rather than addressing the decline.
Shareholders should call a special meeting and elect Elliott's ten independent nominees — former airline CEOs and operational, technology, labor and regulatory experts — to replace the Board and the CEO.
A refreshed board and new leadership would restore operating efficiency, modernize the product, and unlock the industry-leading airline turnaround peers have already proven achievable; no explicit price target is disclosed.
The three reasons
- 1
Southwest's management is the worst-performing team in airlines and has destroyed value through inaction
- 2
Fourth guidance cut in 18 months plus a poison pill and hand-picked director confirm entrenchment, not turnaround
- 3
Elliott has nominated ten independent directors including former airline CEOs to overhaul the Board
Primary demands
- Replace Southwest's CEO and senior management team
- Elect Elliott's slate of ten independent director candidates at a special shareholder meeting
- Restore operating efficiency required to sustain low fares
- Modernize the product offering to align with today's customer preferences
- Strengthen management capabilities to ensure strong operational performance
- Facilitate investment in technology and new assets to run the reliable operation passengers and employees deserve
KPIs cited
Pattern membership
Composition what's on the 2 slides
Slide gallery ·
Notes
Two-page DFAN14A Exhibit 99.1 capturing screenshots of Elliott's 'Stronger Southwest' campaign website (strongersouthwest.com). Page 1 is the press-release index showing nine dated tiles that chart the campaign timeline (June 10 through September 26, 2024). Page 2 is the 9/26/2024 'Elliott Statement on Southwest Airlines' Investor Day' landing page featuring the 'Delivering a Stronger Southwest' pitch, two pull-quotes from a 'Top Ten Active Shareholder' ('I would rate them as the worst-performing management team in airlines … they need to go' and 'The CEO is a headwind to a turnaround. Firing him is the tailwind.'), and a ten-headshot grid of director nominees (Michael Cawley, David Cush, Sarah Feinberg, Hon. Joshua 'Josh' Gotbaum, David 'Dave' Grissen, Nancy Killefer, Robert Milton, Gregg Saretsky, Easwaran 'Eash' Sundaram, Patricia 'Patty' Watson). Stake (~11.0%) and participant details pulled from the SEC disclosure footer. Craft note: the 'Stronger Southwest' branding deliberately mimics Southwest's red/yellow/blue livery, visually appropriating the target's identity. The CEO (Bob Jordan) is named by role on the visible pages, not by name.