SWAPA president supports calls for leadership change at Southwest Airlines

Gangwal has extensive experience in aviation, having served as CEO of US Airways and co-founded IndiGo, one of the largest airlines globally by market capitalization. Despite this, Murray noted that SWAPA and Elliot Investment Management had a meeting scheduled on July 15 in Dallas, Texas.

Murray described communication with Elliot Investment Management as “refreshing,” stating it was collaborative and provided more information each time they met. In contrast, he described communication with Southwest Airlines’ management as difficult, characterizing the union's relationship with the airline as one of “disdain.”

Murray highlighted that several confidential meetings with Southwest Airlines resulted in announcements of schedule reductions or closed bases shortly afterward. He remarked on the lack of collaboration from the airline’s management.

Both parties agree that changes are necessary for Southwest Airlines to improve its performance. The union president acknowledged revenue and technological issues plaguing the airline for years. Erich Schnitzler, chair of SWAPA's economy and financial analysis committee, noted that Southwest Airlines’ poison pill indicated resistance to outside interference.

Elliot Investment Management's response to the poison pill solidified their call for leadership change at Southwest Airlines. Hank Ketchum, second vice president of SWAPA, added that despite Gangwal’s appointment potentially improving matters due to his industry experience, Elliot Investment Management remains committed to overhauling the board.

Ketchum and Schnitzler warned of a potential proxy battle at Southwest Airlines involving Elliot Investment Management and other shareholders calling a special meeting to nominate new board directors. This could occur in fall 2024 around Investor Day on September 26 when strategic initiatives will be introduced.

Southwest Airlines executives have admitted poor financial performance, facing criticism from Elliot Investment Management for multiple guidance reductions over 18 months.

Murray concluded by emphasizing why an activist investor is involved with Southwest Airlines: continuous failures in management necessitate change. He reiterated that all parties agreed on needed changes regarding revenue and business models while promising SWAPA would defend its collective bargaining agreement throughout this process.