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As Southwest promises to make changes to its business model, Elliott is still pushing its case for new leadership.

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Elliott Investment Management said Monday that it is requesting a December 10 special meeting for Southwest Airlines shareholders, kicking off the hedge fund’s first proxy fight since 2017. 

Elliott, which has an 11% stake in Southwest, said it wants to elect its eight nominees to the carrier’s board of directors. 

“We are taking this step today because the need for improved oversight at Southwest has never been more urgent,” wrote Elliott partner John Pike and portfolio manager Bobby Xu in a letter to Southwest shareholders. 

Elliott has been pushing for a leadership overhaul at Southwest, including the ouster of CEO Bob Jordan. While the carrier’s chairman Gary Kelly said he would step down at the end of his term in 2025, the airline’s board said it still supported Jordan. Ever since Elliott made its stake in Southwest public, Jordan has said he isn’t planning to resign

Southwest held its investor day in Dallas on September 26, where it proposed a series of changes such as assigned and premium seating, red-eye flights, capacity cuts and partnerships with international carriers. The airline also said it was implementing a $2.5 billion share buyback program. 

“For Elliott to call that plan rushed and haphazard is, in my opinion, inane,” Jordan said during the company’s investor day.

The last time Elliott had a proxy fight was in 2017 with Arconic, a manufacturing company. That ended with Arconic making concessions to Elliott and the two ultimately had to work out a settlement, according to Reuters

Southwest criticized Elliott for calling for the meeting in a statement on Monday.

“Elliott’s Special Meeting request is unnecessary and inappropriate considering the extreme nature of Elliott’s demands,” Southwest said in a statement. “The timing of Elliott’s request to apparently pursue Board control appears designed to maximize disruption of Southwest’s execution of its important business transformation underway as we approach one of the busiest travel periods of the year.”

Airlines Sector Stock Index Performance Year-to-Date

What am I looking at? The performance of airline sector stocks within the ST200. The index includes companies publicly traded across global markets including network carriers, low-cost carriers, and other related companies.

The Skift Travel 200 (ST200) combines the financial performance of nearly 200 travel companies worth more than a trillion dollars into a single number. See more airlines sector financial performance

Read the full methodology behind the Skift Travel 200.

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Tags: elliott management, jet stream, southwest airlines

Photo credit: A Southwest Airlines Boeing 737 MAX 8.

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