Share to Facebook Share to Twitter Share to Linkedin Southwest CEO Bob Jordan has announced sweeping changes to the company's business model. (Photo: Christopher Goodney) W ith a much-feared activist investor breathing down its neck, Southwest Airlines on Thursday laid out a plan for sweeping changes to its business model, including ditching its long-held open seating model, introducing a premium “extra-legroom” product, offering red-eye flights and more. But Elliott Investment Management, which last month revealed it had taken a $1.
9 billion stake in the airline, remains unmoved. “This failed leadership team’s announced initiatives—obvious attempts at self-preservation—are simply not credible. Too little, too late is not a strategy.
It’s time for new leadership,” Elliott said in a statement Thursday afternoon. Southwest did not respond to Forbes ’ request for comment. Over the past year, Southwest shares have eroded in value by 24% versus a drop of 18% in the S&P 500 Passenger Airlines Index.
In a 51-page presentation to the board called “Stronger Southwest,” Elliott sketched out a turnaround plan in June that included assigned seats, premium seating, baggage fees, and replacing both Southwest CEO Bob Jordan and chairman of the board Gary Kelly. “What’s unusual here, having observed Elliott quite a bit in the past and been advised companies in connection with Elliott campaigns, is they don’t usually come out asking for the CEO’s head on Day One,.
