An investor named Elliott Management has bought $1.9 billion worth of shares in Southwest Airlines. They want to make changes in the company’s leadership because Southwest has been facing difficulties, like delays in getting Boeing’s 737 Max planes.
Hedge fund Elliott Management has bought a $1.9 billion stake in Southwest Airlines and wants to shake things up at the struggling company.
They’re aiming to replace CEO Bob Jordan and chair Gary Kelly because they believe Southwest has gone from being one of the best airlines to one of the worst.
Elliott’s stake in Southwest is significant, making them one of the airline’s biggest shareholders.
Southwest’s shares went up about 7% in early trading on Monday, and the company’s market value is around $16.6 billion.
Elliott did a lot of research before making this move, talking to former Southwest employees and surveying over 2,000 passengers to understand why people choose Southwest over other airlines.
Southwest has been dealing with problems like delays in getting new Boeing 737 Max planes and changes in travel demand due to the pandemic.
The airline is now trying to find new ways to make money and compete with rivals who offer more perks and services to travelers.
Recently, Southwest faced a major setback during the holidays in 2022, costing them over $1 billion and forcing them to fix problems with their staff scheduling software.
Southwest’s stock has dropped by more than 50% in the past three years, while competitors like Delta Air Lines have seen their shares go up.
This isn’t the first time Elliott has tried to shake things up at a company. They’ve done similar campaigns at other companies like Crown Castle and Sensata.
In the past few months, Elliott has also invested in other companies like Texas Instruments, SoftBank, and Anglo American.