DALLAS — Elliott Investment Management continues to urge Southwest Airlines (WN) to bring in new external leadership and is prepared to engage in a proxy fight if necessary.

Elliott, which holds n 8% stake in WN, has aggressively proposed to replace most of the airline's board members. This move aims to drive shareholder value while posing a significant threat to the current airline leadership, as it includes giving CEO Robert Jordan and Executive Chairman Gary Kelly the boot.

Reuters reports that it has seen a letter addressed to WN shareholders in which Elliott proposes forming a board-level committee to conduct a thorough business review and drive significant changes. 

The hedge fund plans to meet with company representatives on September 9 to discuss solutions to the airline's challenges but warned it would pursue a board challenge if leadership fails to act in the company's best interest.

Earlier this month, Elliott announced plans to nominate ten new directors to WN's 15-member board, including former CEOs David Cush and Robert Milton. The hedge fund emphasized that Southwest must be accountable to its shareholders, not operate as an "absolute monarchy."

Elliott's push for change is supported by some investors and Southwest pilots, who have also called for strong leadership to address the airline's issues. 

Despite the airline's recent efforts to implement a turnaround plan—adding assigned seating, premium seats with more legroom, redeye flights, and appointing a new board member—Elliott insists that more comprehensive changes are needed.

This is a developing story.