Elliott Investment Management L.P. released the following statement on behalf of Partner John Pike and Portfolio Manager Bobby Xu regarding Southwest Airlines Co.:
The Investor Day had a familiar ring for many shareholders: Another promise of a better tomorrow from the same people who have created the problems we face today. Without credible leadership that can execute, this plan – filled with long-dated promises of better performance – risks becoming the latest in Southwest’s long series of failed improvement initiatives.
In 2021 and 2022, Southwest made similar promises of billions of dollars in profitability enhancements. Instead, we’ve seen billions of dollars of profitability deterioration under the leadership of CEO Bob Jordan.
The Board continues to evade the most critical question facing Southwest: Why is Mr. Jordan – who has delivered years of unacceptable financial results and, until very recently, was dismissive of the actions announced – the right leader to execute on these “transformative” changes?
The answer is clear: He is not. We came away from extensive engagement with Southwest’s leadership – including in-person meetings and more than a dozen phone calls – even more convinced that current leadership is incapable of delivering on Southwest’s potential. The announcement that adding assigned seating and premium products will take multiple years to implement – when peers have implemented similar changes in much shorter time frames – is further evidence that Mr. Jordan lacks the vision and capability to execute on these initiatives. This is yet another long-dated promise through which Mr. Jordan is playing for time, not success, but he is playing with shareholders’ money.
We remain determined to call a special meeting at which shareholders’ voices can be heard. We encourage our fellow shareholders to call back their shares and prepare to elect an independent best-in-class Board of Directors capable of securing a stronger Southwest for its customers, employees and shareholders.
To learn more about Elliott’s investment in Southwest, please visit StrongerSouthwest.com.
