Friday, July 26, 2024
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Elliott Investment Management L.P. (“Elliott”), today released the following statement from Partner John Pike and Portfolio Manager Bobby Xu regarding Southwest Airlines Co. (“Southwest” or the “Company”) and its recent revenue enhancement initiatives:
Southwest’s announcement of new revenue-enhancement initiatives, including assigned seating, premium-seating options, and redeye flights, is more than a decade overdue. This comes after a 50% decline in its share price over the past three years. The same leadership team responsible for this decline is now proposing these new measures, despite a history of failed attempts to improve performance, repeated operational missteps, and poor financial results.
Today, Southwest finally acknowledged that the preferences of four out of five customers have gone unmet in recent years. These preferences have been well-known for some time, highlighting management’s failure to address them.
Elliott has engaged in direct dialogue with Southwest’s Board about the urgent changes needed at the Company. However, the recently announced initiatives by the current leadership appear to be mere attempts at self-preservation and lack credibility. “Too little, too late” is not a viable strategy. It is time for new leadership.
Southwest is capable of much more, and we are committed to providing our fellow shareholders with the opportunity to elect a Board of industry leaders who can restore Southwest to best-in-class performance.
