DALLAS — Elliott Investment Management (EIM), today released a statement on behalf of Partner John Pike and Portfolio Manager Bobby Xu regarding Southwest Airlines (WN) plans for the next three years.

EIM's response begins by saying that today's Investor Day had a familiar ring for many of the airline shareholders: "Another promise of a better tomorrow from the same people who have created the problems we face today."

Elliot considers that the announced plan, full of long-dated promises of improved performance, runs the danger of becoming the latest in WN's long run of failed improvement projects without genuine leadership capable of execution, a direct shot at CEO Bob Jordan. The hedge fund recalls how the carrier promised similarly billions of dollars in profitability increases between 2021 and 2022.

Let's rewind for a moment. Mr. Jordan has served as the CEO of the airline since February 1, 2022. Before that, he served as the airline's executive vice president of corporate services.  He has been at WN for more than 35 years, and the airline has evolved from a regional carrier to a national brand during his tenure, with over 75,000 employees and over 137 million customers in 2023.

However, EIM contends that shareholders have seen billions of dollars in profitability decline under Jordan's reign. "The Board continues to evade the most critical question facing Southwest: Why is Mr. Jordan – who has delivered years of unacceptable financial results and, until very recently, was dismissive of the actions announced today – the right leader to execute on these 'transformative' changes?"

EIM answered the rhetorical question, "He is not."

"We came away from extensive engagement with Southwest's leadership – including in-person meetings and more than a dozen phone calls – even more convinced that current leadership is incapable of delivering on Southwest's potential. Today's announcement that adding assigned seating and premium products will take multiple years to implement – when peers have implemented similar changes in much shorter time frames – is further evidence that Mr. Jordan lacks the vision and capability to execute on these initiatives. This is yet another long-dated promise through which Mr. Jordan is playing for time, not success, but he is playing with shareholders' money."

"We remain determined to call a special meeting at which shareholders' voices can be heard. We encourage our fellow shareholders to call back their shares and prepare to elect an independent best-in-class Board of Directors capable of securing a stronger Southwest for its customers, employees and shareholders."

Meanwhile, Mr. Jordan continues to stand his ground, stating that the plan presented today "was intentful... detailed... well constructed... For Elliott to call that plan rushed and haphazard is inane.”

Is there any meat to WN's plans, or are they just empty rhetoric? Be sure to share your thoughts with us on our various social media platforms.