Southwest Airlines
has appointed Robert Fornaro to its board of directors as it continues to overhaul its board amidst a proxy battle with activist investor Elliot Investment Management (Elliott).
The airline announced the appointment on September 26, the same day it held its investor day, where it presented multiple changes to its business model.
Experienced executive
The airline described Fornaro as an accomplished executive with four decades of experience in the aviation industry.
The incoming board member served on the board of directors of Spirit Airlines
, as well as being the chief executive officer (CEO) of the low-cost carrier.
Fornaro served in those roles between May 2014 and September 2019 and January 2016 and December 2018, respectively.
Photo: Southwest Airlines
Incidentally, Fornaro was the president and CEO of AirTran Airways, an airline that Southwest Airlines acquired in 2011, from November 2007 until May 2011.
The executive worked with Southwest Airlines between 2011 and 2014 and again from 2020 to 2024 after vacating his Spirit Airlines job.
Bringing objectivity to the table
Gary Kelly, the executive chairman of the board of Southwest Airlines, who will resign in May 2025, said that Fornaro was an exceptional leader with a lot of industry experience.
“As a former consultant to Southwest, Bob has provided an objective review and important perspective on Southwest’s transformation plan, and he has a strong appreciation for Southwest’s unique business model and strategic advantages.”
Kelly concluded that Fornaro’s deep experience while leading multiple airlines will be instrumental as the carrier continues with its board refreshment plan to add best-in-class directors.
Photo: Southwest Airlines
He would bring complementary skills and hold Southwest Airlines’ leadership accountable, Kelly added.
Fornaro said that Southwest Airlines has a storied history and a lot of potential, with the executive stating that he was looking forward to further collaborating with the members of the board.
“I am confident in Bob Jordan and the Leadership Team’s ability to execute its transformation plan and deliver improved performance and Shareholder returns.”
On September 10, Southwest Airlines announced the departure of seven of its board members, including Kelly. While the current executive chairman will depart the carrier’s board after its annual meeting in May, six directors will step down from their positions in November.
In addition to Rakesh Gangwal, the co-founder of IndiGo, Southwest Airlines plans to add four more directors to its board, thus reducing the number of directors to 13 and 12 once Kelly resigns and retires.
Gangwal joined the carrier’s board in July, with the former US Airways and IndiGo executive also bringing plenty of airline experience to Southwest Airlines.
Activist investor battle
When Elliott announced its significant shareholding in Southwest Airlines and planned to transform the airline under the ‘Stronger Southwest’ moniker in June, the activist investor said that one of its goals was to replace Bob Jordan, the president and CEO of Southwest Airlines, Kelly, and the remainder of the board.
“The Board should be reconstituted with new, truly independent directors from outside of Southwest who have best-in-class expertise in airlines, customer experience, and technology.”
Photo: F Armstrong Photography | Shutterstock
It would surprise few that Fornaro, who has worked with Southwest Airlines for a collective seven years, would not satisfy Elliott’s and its calls for an independent board.
When the airline announced Gangwal as an addition to the board, Elliott said that Southwest Airlines chose him in part because of his support for the company’s current leadership and the “status quo.”
“These actions demonstrate how profoundly out of touch Southwest’s Board has become with shareholder sentiment and with the reality of the situation, said the letter.”
Elliot reiterated that shareholders have lost trust in Southwest Airlines’ leadership and do not believe that they are capable of coming up with a plan to turn the airline’s situation around.
On September 24, Elliott called for shareholders to make sure they can vote with their shares as the investment firm will call a special meeting to initiate the leadership changes it has sought.