Elliott to name for Southwest particular assembly 'as quickly as subsequent week'

Elliott Administration mentioned Tuesday it should name a particular assembly at Southwest Airlines “as quickly as subsequent week,” shortly after the corporate put ahead a sweeping board shake-up that it hoped may stave off a proxy struggle.

The push comes days earlier than the airline’s investor assembly, the place it’s anticipated to unveil enhancements and working adjustments. Elliott is searching for to oust CEO Bob Jordan and Government Chairman Gary Kelly, the latter of whom has already dedicated to stepping down in 2025. The activist has put ahead a 10-director slate comprised of airline executives and former regulators or authorities officers.

“We consider that competent new leaders, working via a deliberate and considerate course of, ought to chart the course ahead for Southwest,” Elliott accomplice John Pike and portfolio supervisor Bobby Xu mentioned in a letter to shareholders.

“We do not assist the Firm’s present course, which is being charted in a haphazard method by a bunch of executives in full self-preservation mode,” Pike and Xu wrote.

Southwest’s shareholder assembly is often scheduled for Could, however by calling for a particular assembly Elliott is seeking to elect new administrators a lot prior to that. It takes a number of months for each side to solicit shareholder assist, and a settlement is all the time doable within the interim.

Elliott mentioned Southwest’s advisors had been maneuvering to restrict the variety of shareholders eligible to vote, through one thing generally known as a “false report date.”

Southwest Airways in July unveiled major changes to its greater than 50-year-old enterprise mannequin: It can quickly ditch open seating for assigned seats, provide seats with extra legroom that command larger fares and begin working red-eye flights. Final week, COO Andrew Watterson warned employees to brace for extra “difficult decisions” in its push to revive earnings because the airline faces rising prices and shifting journey patterns.

The corporate is not planning to furlough employees but it surely may reduce its presence in sure cities and provides employees the possibility to switch to different bases, in line with an individual aware of the matter.

Southwest will launch a routine schedule replace on Wednesday that may present its flights via early June. Earlier this month, Kelly, who served as Southwest’s CEO earlier than handing the reins to Jordan in early 2022, mentioned he would step down after the service’s shareholder assembly subsequent spring.

The Plane Mechanics Fraternal Affiliation, which represents Southwest’s mechanics and met with Elliott, mentioned final week the activist investor made “clear that its imaginative and prescient of a Southwest turnaround is one the place Robert Jordan doesn’t stay as CEO, and if Elliott can assert sufficient Board affect, different prime executives would additionally, most certainly, get replaced.”

“The necessity for change is pressing, and our request for a particular assembly could come as quickly as subsequent week,” Pike and Xu mentioned.

Southwest didn’t instantly return a request for remark.