Southwest is heading for Succession-style boardroom battle

Many remember the early episode of HBO hit show “Succession” in which Jeremy Strong’s character tried to turn the board to his side and unseat his father Logan from the company. 

The inner battles between the board, shareholders and the four children of its chief executive earned “Succession” millions of viewers, multiple awards and a spot on BBC’s ranking of the greatest shows of the 21st century.

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In the world of aviation, Dallas-based Southwest Airlines  (LUV)  is in the middle of a proxy battle of its own. After buying $1.9 billion worth of the airline’s shares in June 2024 (roughly 11% of the company), investment firm Elliott Investment Management quickly expressed its desire to see current chief executive Bob Jordan and board chairman Gary Kelly ousted over what it said was “poor execution and leadership’s stubborn unwillingness to evolve the company’s strategy.”

Southwest’s main investor keeps trying to oust the current leadership

Over the last year, the airline had been posting a series of disappointing earnings reports and in July finally took the plunge in announcing that it was getting rid of its beloved and decades-old seating policy as one of several steps to start bringing in profit.

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Elliott, in turn, called the commitment “too little, too late” and continued with its efforts to try to shake up Southwest’s leadership. On Aug. 13, the investment firm released a list of 10 candidates it wants to see in place of most of the 15 on the airline’s board now. Most are former airline CEOs — including previous Air Canada  (ACDVF)  head Robert Milton and Virgin America CEO David Cush — and other industry insiders who, Elliott jabbed at the current board, will bring “relevant expertise, fresh thinking and accountability.”

Southwest, in turn, released a statement saying it “remain(s) open to conversations to drive Shareholder value” but stood firm behind current leadership as the one that should drive the company forward.

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Southwest: ‘Board has consistently sought to engage constructively and in the best interest of all’

“Since Elliott launched its campaign against Southwest Airlines, the Board has consistently sought to engage constructively and in the best interests of all shareholders,” the airline said in a press release. “Elliott has dismissed those efforts at every turn.”

Southwest also said that a meeting in early September will aim to reach “a collaborative resolution” but as Elliott is a large but not majority shareholder, it will need to pull other shareholders to its side in order to be able to oust anyone or vote new members in — a situation not dissimilar to what Kendall Roy tried to do by trying to form an alliance with shareholders of the fictional Waystar Royco.

Elliott, which currently owns approximately 8% of Southwest’s stock alone and 11% when including derivatives, needs to have 10% ownership in order to call a vote on whether to replace the existing leadership — something that multiple sources said it is preparing to do at a rapidly approaching point.

“The Southwest Airlines Board remains confident that the airline has the right leadership team in place to evolve the business and to lead Southwest Airlines forward,” Southwest said.

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