Elliott Investment Management has now acquired more than 10% of Southwest Airlines (WN, Dallas Love Field) common stock, according to a September 3, 2024, filing with the US Securities Exchange Commission. According to Southwest's bylaws, passing that threshold gives a shareholder the right to call a special meeting of shareholders.
Frequently tagged as an activist investment fund, Elliott had acquired a circa 11% stake, worth roughly USD1.9 billion, in Southwest through derivatives but has now converted enough of those to secure 61,116,500 common shares or at least 10% of the total common shares on issue. Since taking an interest in the Texan low-cost carrier, Elliott has agitated for change at the airline, including replacing many of Southwest's executives and board members.
The two sides are due to meet on September 9 to discuss Southwest's ongoing challenges, which include the share price declining by around 50% over the past 36 months. Elliott insists that accepting the status quo at Southwest is an admission of business and vision failure. Should the meeting prove unsatisfactory, the investment fund now has the right to put its case for change directly to shareholders. Southwest CEO Bob Jordan recently told employees that "a battle for the heart of our company and our future" was in train.
"We remain prepared to meet with Elliott next week and look forward to sharing details on our continued transformation at our Investor Day on September 26," a Southwest Airlines spokesperson told ch-aviation.
According to ch-aviation fleets data, Southwest Airlines operates 821 aircraft, namely 376 B737-700s, 240 B737-8s, and 205 B737-800s, to 117 airports in 12 countries. Its most recent annual report noted that the airline "continues to focus on operational excellence and reliability, regaining efficiencies, increasing productivity, and returning margins back to historical levels."
