Elliott Statement on Southwest Airlines' Revenue Enhancement Initiatives

Rhea-AI Summary

Elliott Investment Management has released a statement criticizing Southwest Airlines' (NYSE: LUV) recent announcement of revenue-enhancement initiatives. The investment firm argues that these measures, including assigned seating, premium-seating options, and redeye flights, are long overdue and come after a 50% decline in Southwest's share price over the past three years.

Elliott contends that the current leadership team has a track record of failed performance improvement measures, operational missteps, and poor financial results. The firm believes that Southwest's concession that four out of five customers' preferences were unmet in recent years demonstrates management's failure to address long-standing issues.

Despite engaging in dialogue with Southwest's Board, Elliott views the announced initiatives as insufficient attempts at self-preservation by the current leadership. The investment firm is advocating for new leadership and plans to offer shareholders an opportunity to elect a Board of industry leaders to improve Southwest's performance.

Positive

• Southwest Airlines announced revenue-enhancement initiatives including assigned seating, premium-seating options, and redeye flights

Negative

• 50% decline in Southwest's share price over the past three years
• Elliott criticizes Southwest's leadership for failed performance improvement measures
• Four out of five customers' preferences went unmet in recent years according to Elliott
• Elliott deems the announced initiatives as insufficient and not credible
• Elliott calls for new leadership at Southwest Airlines

WEST PALM BEACH, Fla., July 25, 2024 /PRNewswire/ -- Elliott Investment Management L.P. ("Elliott"), today released the following statement on behalf of Partner John Pike and Portfolio Manager Bobby Xu regarding Southwest Airlines Co. (NYSE: LUV) (the "Company" or "Southwest") and its revenue enhancement initiatives:

Southwest's announcement of revenue-enhancement initiatives, purporting to offer assigned seating, premium-seating options and redeye flights, comes more than a decade late, and after a 50% decline in its share price over the past three years. This new plan is being proposed by the same leadership team that has presided over a series of failed measures to improve performance, repeated operational missteps and poor financial results.

Today, Southwest finally conceded that four out of five customers' preferences went unmet in recent years. These preferences did not emerge overnight; management simply was not doing its job.

Elliott has engaged in direct dialogue with Southwest's Board on the scale and urgency of change needed at the Company. But 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.

Southwest can do far better, and we look forward to offering our fellow shareholders an opportunity to elect a Board of industry leaders that can return Southwest to best-in-class performance.

For more information about Elliott's investment in Southwest, please visit StrongerSouthwest.com.

About Elliott
Elliott Investment Management L.P. (together with its affiliates, "Elliott") manages approximately $65.5 billion of assets as of December 31, 2023. Founded in 1977, it is one of the oldest funds under continuous management. The Elliott funds' investors include pension plans, sovereign wealth funds, endowments, foundations, funds-of-funds, high net worth individuals and families, and employees of the firm. 

Media Contact:         
Casey Friedman                                             
Elliott Investment Management L.P.                                     
(212) 478-1780                                              
cFriedman@elliottmgmt.com 

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SOURCE Elliott Investment Management L.P.

FAQ

What revenue-enhancement initiatives did Southwest Airlines (LUV) announce?

Southwest Airlines announced revenue-enhancement initiatives including assigned seating, premium-seating options, and redeye flights.

How has Southwest Airlines' (LUV) stock performed in the past three years according to Elliott?

According to Elliott Investment Management, Southwest Airlines' share price has declined by 50% over the past three years.

What is Elliott Investment Management's stance on Southwest Airlines' (LUV) current leadership?

Elliott Investment Management is critical of Southwest Airlines' current leadership, citing failed performance improvement measures, operational missteps, and poor financial results. They are calling for new leadership at the company.

What action is Elliott Investment Management planning regarding Southwest Airlines (LUV)?

Elliott Investment Management plans to offer shareholders an opportunity to elect a new Board of industry leaders to improve Southwest Airlines' performance.