Elliott to call for Southwest special meeting 'as soon as possible'.

• As soon as next week, a special meeting will be called at Southwest Airlines by activist investor Elliott Management.
• Elliott's call for a special meeting would result in the election of new directors before Southwest's typical May shareholder meeting.
• A slate of ten directors, consisting of airline executives and former regulators or government officials, has been proposed by the activist.

Elliott Management announced Tuesday that it will hold a special meeting "as soon as next week" following a board shakeup aimed at preventing a proxy fight.

The airline is set to reveal improvements and changes in its operations at an investor meeting, but Elliott is pushing for changes in leadership. The activist wants to remove CEO Bob Jordan and executive chairman Gary Kelly, who has already announced his departure in 2025. Elliott has proposed a slate of ten directors, including airline executives and former regulators or government officials.

According to Elliott partner John Pike and portfolio manager Bobby Xu, in a letter to shareholders, they believe that skilled new leaders, through a careful and thoughtful process, should determine the future direction of Southwest.

Pike and Xu wrote that they do not support the Company's current course, which is being charted in a haphazard manner by a group of executives in full self-preservation mode.

Elliott is seeking to elect new directors at Southwest's shareholder meeting, which is typically scheduled for May, but the meeting may be held sooner due to the call for a special meeting. It takes several months for both sides to gather shareholder support, and a settlement is always possible before the meeting takes place.

Southwest's advisors were attempting to restrict the number of shareholders who could vote by using a "false record date," as stated by Elliott.

In July, Southwest Airlines announced significant alterations to its 50-year-old business model. The airline will soon transition from open seating to assigned seats, provide seats with increased legroom at higher prices, and begin operating red-eye flights. Last week, COO Andrew Watterson informed staff that they should prepare for additional "difficult decisions" as the airline strives to recover profits amid rising expenses and evolving travel trends.

The company is considering reducing its presence in certain cities and offering workers the opportunity to transfer to other locations, but it is not planning to furlough employees, according to a source.

On Wednesday, Southwest will provide an update on its flight schedule for early June. Earlier this month, Gary Kelly, the executive chairman and former CEO, announced that he would step down after the carrier's shareholder meeting next year.

Last week, the Aircraft Mechanics Fraternal Association, representing Southwest's mechanics, met with Elliott and learned that the activist investor's vision for a Southwest turnaround involves replacing CEO Robert Jordan and potentially other top executives if Elliott can gain enough Board influence.

Pike and Xu stated that the urgent need for change may result in a special meeting request next week.

Southwest did not immediately return a request for comment.