On Wednesday, Elliott Investment Management, which holds an 11% interest in Southwest Airlines (NYSE:LUV), announced its intention to nominate ten independent candidates to replace a majority of the airline's board of directors.
This move follows the activist investor's criticism of Southwest's current board, which it claims has failed to hold management accountable for the airline's declining performance.
Elliott's nominees include four former airline CEOs and other experts with experience in technology, hospitality, labor relations, and regulatory oversight.
The firm believes that these candidates possess the expertise necessary to address Southwest's ongoing challenges and restore the airline's industry-leading status.
Elliott has previously outlined a three-step plan for Southwest's turnaround: reconstituting the board, installing new leadership, and conducting a comprehensive business review.
The firm argues that urgent changes are needed, highlighting what it describes as a continued deterioration in Southwest's performance since it first raised concerns in June 2024.
Southwest Airlines responded by emphasizing its ongoing efforts to refresh its board, noting that eight new independent directors have been appointed in the past three years.
The airline's leadership expressed disappointment with Elliott's decision to publicly announce its intentions despite a planned meeting in September to discuss collaborative resolutions.
"Since Elliott launched its campaign against Southwest Airlines, the Board has consistently sought to engage constructively and in the best interests of all Shareholders. Elliott has dismissed those efforts at every turn," said Southwest Airlines.
They added: "After Elliott recently agreed to a meeting with Southwest Airlines in early September to discuss a collaborative resolution, including continuing significant Board refreshment and other governance enhancements, Elliott unilaterally decided instead to publicly announce its intention to replace a majority of Southwest Airlines' Board."
Southwest reaffirmed its commitment to restoring financial performance and enhancing shareholder value, pointing to upcoming initiatives that will be detailed at an Investor Day event in September.
Southwest Airlines shares are down around 0.6% at the time of writing after initially opening higher at the start of the session.