Southwest Airlines CEO Robert Jordan announced Wednesday that he will not resign despite pressure from hedge fund Elliott Investment Management. The hedge fund, which acquired a $1.9 billion stake in Southwest, is seeking Jordan’s removal along with that of Chairman Gary Kelly.
Elliott Investment Management is critical of the airline’s leadership for not adapting to changing customer preferences, resulting in a more than 50% decline in share price over the past three years. Jordan stated that his leadership team will unveil a plan to enhance the airline’s financial performance in September. While he did not provide details, he hinted at possible changes to Southwest’s boarding and seating policies.
Elliott Investment Management, as well as Artisan Partners, another investment manager with a 1.8% stake in Southwest, want to replace Jordan and Kelly with external executives.
Jordan emphasized that Southwest will consider Elliott’s input but will operate independently. He highlighted ongoing investments in technology improvements, such as better WiFi, larger bins for carry-on bags, and more power outlets, addressing criticisms that outdated systems contributed to significant flight cancellations in December 2022.
Southwest is also exploring changes to its cabin and seating, including the possibility of selling seats with extra legroom. Jordan expressed eagerness to present a comprehensive plan for both customer and financial improvements at the investor day in September. He dismissed Elliott’s presentation to shareholders as lacking substantial ideas.