Activist Investor Elliott Criticizes Southwest Again After Airline Announces Changes

The clash betwixt Elliott Investment Management and nan activity of Southwest Airlines (LUV) intensified aft nan private equity patient blasted nan airline’s guidance for acting excessively precocious to initiate financial reforms.

On Thursday, Southwest announced a bid of steps to boost revenue, including ending its long-held believe of unfastened seating and offering premium seating. It besides plans to statesman operating connected a 24-hour schedule pinch overnight flights.

In a connection connected behalf of Partner John Pike and Portfolio Manager Bobby Xu, Elliott said that nan moves travel “more than a decade late, and aft a 50% diminution successful its stock value complete nan past 3 years.” It added that nan actions were made by “the aforesaid activity squad that has presided complete a bid of grounded measures to amended performance, repeated operational missteps and mediocre financial results.”

Elliott went connected to opportunity that guidance was “simply not doing its job” by failing to admit that nan desires of astir of its customers were being unmet. The patient said it looks guardant “to offering our chap shareholders an opportunity to elite a Board of manufacture leaders that tin return Southwest to best-in-class performance.”

The connection followed similar comments made by Elliott successful June erstwhile it reported that it had taken a $1.9 cardinal liking successful nan bearer and pushed for a guidance shakeup.

Southwest shares fell 3.1% to adjacent astatine $27.23 connected Friday, bucking a broader rally for nan U.S. banal market.