The Dallas-based airline has announced sweeping changes in recent months aimed at raising revenue.
DALLAS — Southwest Airlines has announced a slate of major changes, from the first mass layoffs in the airline’s history to abandoning its longstanding “bags fly free” policy in recent months amid pressure from activist investor Elliott Investment Management to raise revenue.
Other recent changes the Dallas-based airline has announced include introducing assigned seating, offering premium seating, and adding redeye flights.
Aside from pressuring the airline to raise revenue, since disclosing an 11% economic stake in Southwest last year (enough to call a special board meeting), Elliott Investment Management has also overhauled Southwest’s board, with two-thirds of the members being replaced.
Elliott Investment Management and Southwest leadership agreed to the board shakeup last year. The board will be reduced from 15 members to 13 at the next annual shareholder meeting after the hedge fund publicly criticized Southwest’s management.
So what do we know about the activist investor that has led to so much change for the airline?
Who is Elliott Investment Management?
The Florida-based hedge fund led by Paul Singer manages more than $7 billion in assets, according to its website, and is not known for being vocal in asking for changes from the companies it buys into.
The firm, which now employs just under 600 people, was established in 1977 and, according to its website, is one of the oldest investment managers of its kind under continuous management.
Other large companies Elliott Investment Management has bought into
Among the other large companies that have recently been targets of Elliott’s campaigns are coffee giant Starbucks, technology company Honeywell, and energy company Phillips 66, as Reuters reported.
In a press release in August of last year, Elliott said it had become one of the largest investors in Starbucks and Reuters reported Elliott pushed for changes to Starbucks’ board.
Starbucks named former Chipotle CEO Brian Niccol as its new CEO last year, although Elliott reportedly hadn’t pushed for the coffee chain’s previous CEO’s ouster.
For its part, Honeywell split into three independent companies following pressure from Elliott, Reuters reported.
At energy giant Phillips 66, in which Elliott Investment said in a press release that it has a $2.5 billion investment, a new director was added to the company’s board with Elliott’s approval.
