Elliott Sends Letter and Presentation to the Board of Southwest Airlines

Today, Elliott stake Management L.P. (“Elliott”) wrote a letter to the Southwest Board of Directors, overseeing funds that collectively have an approximate $1.9 billion stake in the airline company. elliott investment southwest airlines

In the letter, Elliott expresses dissatisfaction with Southwest’s performance under current leadership, citing poor execution and a reluctance to adapt the company’s strategy to modern industry standards. Elliott emphasizes that Southwest’s adherence to outdated practices has hindered its competitiveness, leading to disappointing results for shareholders, employees, and customers alike.

Highlighting Southwest’s operational challenges, Elliott points to the December 2022 operational meltdown, which left over two million travelers stranded during the holidays. The fund manager notes that Southwest’s stock price has declined by over 50% in the past three years, falling below pre-pandemic levels despite overall market recovery. This decline in share value has also impacted frontline employees, resulting in lower profit sharing and reduced value of employee-owned stock.

Elliott proposes a “Stronger Southwest” plan, consisting of three key recommendations: enhancing the board, upgrading leadership, and conducting a comprehensive business review. The fund manager believes that implementing these measures can lead to a significant turnaround for Southwest, potentially achieving a stock price of $49 per share within 12 months, representing a 77% return.

Elliott is convinced that Southwest’s issues are addressable with the right leadership and a comprehensive, unbiased evaluation of available opportunities, and looks forward to collaborating with the Company to restore accountability and best-in-class financial performance for the benefit of Southwest shareholders, employees and customers.