An investment firm has taken a $1.9 billion stake in Southwest Airlines and wants to oust the CEO

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They will be charging more for checked baggage and early check-ins.

The investment firm said Monday that Southwest failed to keep up with other airlines and suffers from outdated technology and operations.DALLAS — Activist shareholder Elliott Investment Management has bought a $1.9 billion stake in Southwest Airlines and is seeking to force out the CEO of the airline, which has struggled with operational and financial problems.

The firm said Southwest failed to evolve, hurting its ability to compete with other carriers. It said the Dallas-based carrier has outdated software and operational processes, which were behind the airline's massive flight cancellations in December 2022. Elliott is calling for executives from outside the company to replace Jordan and Kelly, and “significant” changes on the board, including new independent directors with experience at other airlines.

Savanthi Syth, an airline analyst for Raymond James Financial, said Elliott was likely attracted by Southwest's well-known brand, leading position at many airports and strong balance sheet, among other attributes. She suggested that necessary changes shouldn't be that hard to achieve.

 

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