Southwest Airlines CEO Remains Confident Despite Activist Investor's 'New Leadership' Playlist on Repeat
3 minute read
Published: 6/13/2024
### Southwest Airlines CEO Remains Confident Despite Activist Investor's 'New Leadership' Playlist on RepeatIn a move as unexpected as finding Wi-Fi that actually works on a flight, Southwest Airlines CEO Bob Jordan has refused to budge from his seat, even as activist investor Elliott Investment Management cranks up the pressure for a leadership shuffle and a board makeover (
New York Post
, June 12, 2024;
NBC
, June 12, 2024).
Elliott Investment Management, apparently inspired by the power of financial turbulence, has called for a change in leadership and an overhaul of Southwest's board after revealing its hefty $1.9 billion stake in the airline (
New York Post
, June 12, 2024;
NBC
, June 12, 2024). Clearly, when you hold nearly $2 billion in stock, playing musical chairs with the executive suite can seem quite reasonable.
Meanwhile, Southwest Airlines is navigating more than just internal politics. The airline has revised its expectations for aircraft deliveries, revealing a downsized order from Boeing—now expecting only 20 airplanes this year instead of the initially anticipated 80 (
New York Post
, June 12, 2024;
NBC
, June 12, 2024). It's almost like they ordered a fleet and got a fleet card instead.
In response to the changing winds (and markets), Southwest Airlines is contemplating updates to its legendary open seating policy, possibly introducing premium seating or extra legroom seats (
New York Post
, June 12, 2024;
NBC
, June 12, 2024). Let's face it: even cattle class could use a little more elbow room.
As if that wasn’t enough, Elliott Investment Management has thrown another bone—suggesting the possibility of introducing bag fees (
New York Post
, June 12, 2024). Considering Southwest has prided itself on its "bags fly free" policy, this pitch could be the financial equivalent of asking them to add diet soda to their beverage cart.
Southwest Airlines plans to unveil a 'very broad plan' at an investor day this September (
New York Post
, June 12, 2024). The specifics are still under wraps, but one can only hope it’s more than just plans for better in-flight snacks.
To keep passengers happy until then, the airline has upgraded its inflight Wi-Fi and added power outlets to its Boeing 737 fleet (
NBC
, June 12, 2024). In a world where being disconnected for more than five minutes can induce panic, this is basically the equivalent of tossing bread to the masses.
Let's not forget, Southwest Airlines took a $1 billion hit following a year-end holiday meltdown in 2022 and has since acknowledged the urgent need for a technology upgrade (
NBC
, June 12, 2024). It's almost as if their servers crashed harder than the average traveler after a red-eye flight.
In the boarding gate of corporate governance, CEO Bob Jordan is standing firm, unfazed by Elliott Investment's playlist stuck on 'New Leadership.' Whether he’s going to be the hero Southwest needs—or just the one they currently have—is a bit like waiting for your luggage at the carousel: full of anticipation and an occasional grimace.
### References
- New York Post, June 12, 2024. "Southwest Airlines CEO Bob Jordan Faces Pressure From Activist Investor Elliott Management." Available at:
New York Post
- NBC, June 12, 2024. "Southwest Airlines CEO Refuses to Step Down Amid Activist Investor Pressure." Available at:
NBC News
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