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Southwest Airlines CEO defies pressure from activist Elliott

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Southwest Airlines CEO Robert Jordan has said that he will not resign despite Paul Singer’s activist hedge fund Elliott Investment Management calling for leadership and board changes earlier this week, according to a report by the Associated Press. 

Following a Politico event in Washington, DC on Wednesday, Jordan told reporters he had “no plans to resign” and emphasised that Southwest would treat Elliott “like any other investor”. 

Jordan described Elliott’s presentation to Southwest shareholders as “fairly light” on actionable ideas.  

He added that his leadership team would unveil a plan in September to enhance the airline’s financial performance. He did not provide specific details beyond mentioning efforts to enhance customer experience through better WiFi, larger bins for carry-on bags and additional power outlets. Jordan also highlighted Southwest’s ongoing investments in technology to address issues such as the massive flight cancellations in December 2022, which were partly attributed to outdated systems. 

On Monday, Elliott Investment Management informed Southwest’s board that it had acquired a $1.9bn (approximately 11%) stake in the Dallas-based airline. The hedge fund is pushing to replace Jordan and Gary Kelly, the airline’s chairman and former CEO, with external executives. Elliott criticised Southwest’s current leadership for failing to adapt to changing customer preferences, noting that the company’s share price has plummeted more than 50% over the past three years. 

Artisan Partners, another investment manager which owns 1.8% of Southwest’s stock according to FactSet, also urged Southwest’s board on Wednesday to “reconstitute itself and upgrade the company’s leadership” in a letter to Southwest’s board. 

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