It has been a fascinating several months for Southwest Airlines, ever since an activist investor took a major stake in the airline. That activist investor, Elliott Investment Management, has been calling for massive changes to Southwest’s business model, and has been trying to oust most of Southwest’s management.
Continue reading: Southwest Airlines Ends Feud With Activist Investor… Now What?
Share your questions, experiences, and thoughts below.
The question is what kind of "investor" is he? Will he do the load up on debt to buy back stock, he gets rich and then dumps the stock before the endless debt and focus on stock buybacks catches up with the airline? Will he try to turn Southwest into another legacy airline? Will he try to create a new airline business model?
Might as well rename it Elliott Airlines because all of these changes means SW (as we knew it) is gone. I love SW for domestic (and Caribbean) flights. They are killing everything that made it different. I imagine the CP will be next on the chopping block.
Elliott lost.
WN said months ago that they intended to make a number of changes and it became clear that WN did what WN was ready to do.
Elliott did force changes in management and board -but it is far from clear that the new board members or BoJo as the retained CEO will be able to accomplish as much as Elliott thinks WN should do.
WN has lots that it needs to turn around but they will move at the speed they want.
Icahn accomplished relatively little at B6 which realized it needed to turn things around and privately threw its CEO overboard.
Airlines have enough to worry about to throw activist investors into the mix.
Agree. I actually like the boarding process although most folks seem to have an issue with it.
I fly exclusively Southwest in the US and have since the early 1980's. The simplicity of boarding along with the baggage program and Rapid Rewards has kept me loyal. I am not a member of any other airline loyalty program! Should I see changes that stunt Southwest's on time performance then I may consider my choices from my home base of Kansas City. Assigned seating is not a time saver so my first worry may already be right on the horizon.
It's impressive that Southwest managed to shake off the pest that this 'activist investor' is, up to this extent. The interest of Elloitt is to squeeze as much money out of Southwest here and now, and get out before the dust settles on the ruins of the airline. They're not interested in decades of company culture, in why Southwests business model worked or even in running an airline. We've seen this kind of activism in several other companies and I'm actually still wondering why this kind of parasite type of behavior is allowed. It's actively and deliberately killing companies and careers for short term gain.
Elliott is not in it for the long haul nor are they going to just quietly go away. I still see them pushing for some kind of merger.
Look 20 miles to the W, AA is SW minus it's employees LUV. Gary is the last leader from the Herb-Lamar Muse founders, despite the news release everybody knows he didn't intend to leave this way. Try to imagine Elliott's inevitable new CEO dressing in an outlandish costume for Halloween for pics and laughs, Top Execs showing up on the ramp during Holiday Crush to help with baggage for a shift or two, nobody in the Company named Mr. or Ms.
People bitch about it, and yet their boarding is much faster than other airlines.
I'd love to read feedback from WN unions as well other shareholder groups. I'd also like to read feedback on other comparable Elliot investments. I'll Google...
I should have clarified that I am basing that on Trump winning the election. Paul Singer is a strong supporter of Trump and I don’t see a Trump DOJ or DOT standing in the way of any merger proposal that Singer (Elliott) would make. Actually I don’t see a Trump Administration blocking any potential airline merger. JetBlue looks like a potential merger candidate but I wouldn’t rule out one of the Big Three either.