Elliott Investment Management and Southwest Airlines are in early discussions for a settlement that would grant the activist investor significant representation on the airline's board, potentially avoiding a proxy fight. Elliott, which holds an 11% stake in the airline, aims to oust CEO Bob Jordan and reform the airline's strategy to enhance profitability. The board will reduce to 12 members following Chairman Gary Kelly's retirement, which may limit Elliott's influence to fewer than six selections. Southwest has been working on a major shift in its business model, including the introduction of extra legroom seats and a three-year plan aimed at boosting earnings by $4 billion by 2027. The settlement talks remain confidential and could fall through, with a special meeting called for December 10 to discuss board changes. This comes amidst efforts by Southwest to revitalize its financial performance and adapt to changing consumer preferences.