Southwest Airlines Settles Proxy Battle with Elliott Management

Southwest Airlines has reached a settlement with Elliott Investment Management, agreeing to replace its chairman and six board members as part of a strategy to enhance profitability and stock performance. This change, effective November 1, will see five candidates backed by Elliott fill these positions, though the hedge fund did not succeed in its goal to oust CEO Robert Jordan. The airline reported a significant drop in third-quarter profit, down nearly two-thirds to $67 million, amid rising labor and operational costs. The competition from budget carriers has prompted Southwest to plan a 4% reduction in flight capacity for the upcoming quarter. Despite the challenges, both Southwest and American Airlines reported earnings that beat Wall Street expectations when excluding special items. CEO Jordan expressed optimism that the board changes will help improve the airline's financial outlook moving forward.