Southwest Airlines CEO says he won't resign
Elliott Investment Management has said it bought a $1.9 billion stake in Southwest and wants to replace Jordan Southwest Airlines CEO Robert Jordan has refused to resign under pressure from Elliott Investment Management, which has bought a $1.9 billion stake in the company and is seeking to replace Jordan and Gary Kelly, the airline’s chairman and former CEO, with executives from outside the company. The hedge fund accused Southwest of failing to meet evolving customer tastes, leading to a drop in its share price over the past three years. Elliott's share price has fallen more than 50% since the company's three-year decline. CEO Jordan stated that he has no plans to resign and that his leadership team will produce a plan to improve the airline's financial performance. He also mentioned that Southwest is investing in better technology and improving customer experience, including larger bins for carry-on bags and more power outlets.
发表 : 2个星期前 经过 Associated Press 在 Business Travel
DALLAS — The CEO of Southwest Airlines said Wednesday he will not resign in the face of pressure from a hedge fund that wants him fired and that his leadership team will produce its own plan to boost the airline's financial performance.
CEO Robert Jordan said Southwest will present its plan in September. He declined to give specifics, but again hinted that it could include changes in the airline’s longstanding boarding and seating policies.
Elliott Investment Management notified Southwest’s board Monday that it bought a $1.9 billion stake in the Dallas-based company and is seeking to replace Jordan and Gary Kelly, the airline’s chairman and former CEO, with executives from outside the company.
Elliott accused Southwest leadership of failing to change with evolving customer tastes, causing it to lag behind rivals. The hedge fund noted that Southwest’s share price has fallen more than 50% over the past three years.
Speaking to reporters after a Politico event in Washington, Jordan said, “I have no plans to resign" and that Southwest will treat Elliott “like any other investor.”
“Elliott can provide us ideas. They can talk to other shareholders, but Elliott is not directing the company,” he said.
Jordan said Southwest is investing in better technology — critics blamed outdated systems for contributing to massive flight cancellations in December 2022. He said the airline is also improving the customer experience with better WiFi, larger bins for carry-on bags, and more power outlets.
Southwest is also considering changes to its cabin and seating, such as whether to sell some seats with extra legroom, Jordan said.
“We've got an investor day in September, and I'm eager to lay out a very broad plan for how we improve the company both from a customer perspective but from a financial perspective,” Jordan said. He added that an Elliott presentation aimed at Southwest shareholders was “fairly light” on ideas.
Elliott did not immediately respond Wednesday when asked if it wanted to comment.
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