The Southwest Airlines activist investor looking to load up Southwest’s balance sheet with debt, turn the airline into a clone of underperformers American Airlines and JetBlue, and shed staff, is expected to increase its ownership in the carrier. In addition, more of the airline’s leadership is being pushed out.
The day after Southwest Airlines performed its first-ever company-wide layoff in its history – over zoom, no less! – Elliott Management entered into an agreement with the airline that allows it to acquire up to 19.9% of company stock. That’s an increase from the 14.9% that it previously had agreed to cap itself at, and the limit runs through the 2026 annual shareholders meeting.
Meanwhile, Executive Vice President and Chief Transformation Officer Ryan Green has ‘informed the company’ that he will leave effective April 1.
This follows the announced departures of Executive Vice President and Chief Financial Officer Tammy Romo and Chief Administration Officer Linda Rutherford.
Seven members of the board were pushed out, including Chairman and former CEO Gary Kelly. However – so far – CEO Bob Jordan remains. He’s doing Elliott’s bidding, with layoffs (even though staff reductions would have been accomplished through attrition in 12-18 months) and sale of aircraft to fund stock buybacks.
Bob Jordan will ” RETIRE ” I predict by June of this year with a Supersized Golden Parachute. Southwest Leadership for years looked at The Palace ( Headquarters) as an extension of their own Six Flags. Well the Cyclone Roller Coaster has come to a stop and The Wally World Moose has said Farewell to all. I see Southwest being prepped to sell in the next year or 2.
Maybe Bob Jordan will actually learn the names of SWA’s 5 and 10 million mile customers before they pivot away from what’s left of its culture and he parachutes out with a $25M+ severance package. After unlocking the doors to his HQ building, presumably…
Shades of Carl Icahn?…..as noted, the limits of their business model, short haul no frills reliable service was taken as far as it could go. Their attempt at Hawaii service proved that. In the past whenever SWA bought another airline they a took somewhat arrogant “we bought you and you’re lucky to be here” attitude….have to wonder how it will go if the shoe is on the other foot……
Blue Horseshoe loves Southwest Airlines. Which will end up going the way of the fictional Anacott Steel (IYKYK), thanks to the evil bastards at Elliott.
If he loads Southwest up on debt then a merger is more problematic because the debt has to be dealt with and another airline would likely be reluctant to assume that debt. There “might” be a possible swap of debt for equity in a combined company.
Another example of greed ruining a good company.
WN is being murdered. One way or another, it will soon cease to be whether by merger, parting out, or whatever. I went through this at another carrier that for the time was remarkably like WN in company culture.
I’m sorry to see it go. I wish my friends there all the best.
Sold off in pieces, most likely.
I’ve loved flying Southwest for over 25 years but now thanks to Elliott I am now flying more on Delta and Alaska. I dislike American and JetBlue so making Southwest more like them loses me as a customer. Cancelled my Southwest credit card too. So sad to see the wonderful culture of Southwest being gutted.
Too bad they have not found another victim. But we can all send a note of thanks to the man who led Southwest Airlines after Herb Kelleher retired. He completely ignored the operation and technology. Instead he pursued trying to get service in Atlanta and Hawaii which have not really paid off. And in his pursuit of Atlanta he went ahead and purchased Air Tran and brought on many of their Executive Team, which again has obviously not been to the advantage of Southwest Airlines.
RIP Southwest
Same as previous comment. Cancelled SW credit card and don’t fly them anymore. My first trip this year in over 25 years not flying Southwest. Prioritizing greed over providing a service at reasonable rates.
Dear Elliott, please please pretty please with a cherry on top make them introduce a domestic F cabin. I and many others will buy revenue tickets religiously if done correctly.
RIP Southwest!
Can’t survive being an underperformer!
LCC’s don’t work anymore and putting your eggs (aircraft) in one basket has taken its toll.
“Sale of aircraft to fund buybacks”. I’ve seen that route before.
IMO the comments about “Blue Horseshoe” is probably spot on.
Hopefully Elliott Management’s next target will be across town over at American! AA has so many managers that could be canned that no one would even notice!! Please Elliott I beg you!
I agree with Adam above. In regards to SWA, they have no one to blame but themselves for their under performance that has allowed for Elliott Management to come in and exert their will.
@Doug @Jacobin777 — You guys get it. Clearly, this was corporate greed and mismanagement, not the fault of crews or ground staff. I’m pleased that so far no one here is blaming the workers (for once) in these comments. Nothing is more disappointing than the shills that ‘punch down’ while these hedge fund and private equity parasites harm us.
MAKE SWA GREAT AGAIN!
Be like TRUMP!
Southwest has done very well for many, many years and now greed has made its way into the organization.
It has so many loyal customers that have grown over the last 50 years and now its tradition is being ruined by greed and ignorant changes.
The new organization will run off so many, many customers as they turn Southwest into another ordinary airline with no perks or reasonable flights.
The new board members and investors will ultimately destroy what was once a tremendous airline for the people.
So all or most of the 1750 laid off clicked a link to an email to find out if they are safe or are history followed by a 6 minute pre recorded message. Bob Jordan’s press release was very misleading as they went outside of Headquarters ( The Palace ) to lay off experienced and meaningful employees. Seems like the employees with zero or little airline experience were kept. As far as Bob Jordan banging the drums about respect and dignity that went out the window with an email and pre recorded message. Spineless and Cowardly thing to do.
Congratulations. Southwest’s new business model has now become a duplicate of every failed airline of the past. Next stop, the rape and pillage phase mixed with union strikes and customer abuse before failure.
The first sign of decline and failure will be when you call customer support and get someone who thinks they speak English.