After buying a $1.9 billion stake in Southwest Airlines, Elliott Investment Management, based in Dallas, Texas, is looking to make some major changes due to operational and financial problems.

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The biggest change being the removal of the airline’s CEO, Robert Jordan, along with smaller changes to outdated material.

Apparently Southwest’s stock price has dropped more than 50% in the last three years. Elliott believes this decline is due to a variety of things including flight cancelations due to outdated software and operational processes, and their failure to evolve and compete with other airlines.

The investment firm stated:

“Poor execution and leadership’s stubborn unwillingness to evolve the Company’s strategy have led to deeply disappointing results for shareholders, employees and customers alike.”

Elliott also stated that the Southwest CEO...

“has delivered unacceptable financial and operational performance quarter after quarter.” They also said Jordan and former CEO Gary Kelly, now the airline’s executive chairman, “are not up to the task of modernizing Southwest.”

This call for change is being done with the hope to move forward and see the airline grow again, but change is always scary.

This is especially scary for many Southwest flyers that are worried the company may not improve and will eventually go under. For many travelers, this is their primary choice in airlines for cost and flight paths. For example, it is the only airline that has a direct flight from Lubbock to Austin.

I am curious to see what happens and if the company is able to survive these major changes without too much loss.

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