Southwest Airlines has amended its cooperation agreement with Elliott Investment Management, it was reported on Wednesday, allowing the activist investor to increase its economic exposure in the airline from 14.9% to 19.9%.
The updated agreement also extended restrictions on Elliott acquiring more than 12.49% of Southwest’s outstanding common stock until 1 April 2026.
It followed Elliott’s push for significant changes at Southwest, including board restructuring and executive shakeups.
Last year, a months-long dispute between the airline and Elliott led to an agreement that resulted in board concessions and the accelerated retirement of chairman Garry Kelly.
Elliott had since continued to pressure Southwest leadership amid the airline’s financial struggles.
In a separate announcement, Southwest also disclosed that Ryan Green, executive vice-president and chief transformation officer, would step down from his role on 1 April.
Green had been overseeing major operational changes, including Southwest’s shift away from open seating and the introduction of premium seating options.
The company did not provide a reason for his departure or name a successor.
Both changes came as Southwest started going through its first-ever round of involuntary redundancies, cutting 1,750 corporate jobs – about 15% of its corporate workforce – as part of a cost-saving initiative.
The airline had struggled to compete with larger rivals that had capitalised on demand for premium travel and long-haul routes – areas where Southwest and its fleet of single-aisle Boeing 737 jets had little or no exposure.
Southwest was in the midst of a broader transformation plan after disappointing financial results last year.
Alongside operational shifts, it had announced other restructuring efforts, including reducing pilot headcount at select bases and pausing hiring.
At 0948 EST (1448 GMT), shares in Southwest Airlines were down 0.53% in New York at $29.84.
Reporting by Josh White for Shaercast.com.